Mr Justice Frank Clarke said he wants to have the confidential information today before he decides whether it could be released to a syndicate of three banks owed more than €114 million and who are opposing McInerney going through the examinership process. He said he would continue to extend the protection of the court until Friday when a full hearing of the matter is scheduled to take place.
Five McInerney companies have been under High Court protection from creditors since late August, when William O’Riordan was appointed examiner.
An US private equity house, Oaktree Capital, is in negotiations with the examiner to take a stake in the group, which has businesses in Ireland and Britain, for €40m, and is committed to invest at least €10m in the Irish operation.
The banks – Bank of Ireland, KBC and Anglo Irish – are objecting to any extension of the examinership. Yesterday, counsel for the examiner gave Mr Justice Clarke a confidential letter outlining valuations put on McInerney properties by auctioneers Lisney and which form part of the proposed survival scheme.
The judge said the primary driving factor behind the company’s losses was that the (company’s) directors had taken the prudent view of writing down the value of property assets in the order of 50%. What was not clear to the judge was whether a further write down was required and he wanted more information.
Bernard Dunleavy, counsel for the examiner, said that information could be supplied today.
Earlier, Mr Dunleavy said the examiner had stated in an affidavit he was actively engaging with Oaktree and had formed the view that he will be in a position to have a scheme in place to ensure the company could survive as a going concern.
Further time was required and a deadline had been set out for the steps required to finalise this, counsel said.
This work needed to be “free from the gaze of other parties,” counsel said. It would be “entirely corrosive” of the entire examinership process if the examiner had to conduct negotiations with the investor in public or at least with the banks “looking over his shoulder”. The negotiations needed to be conducted in private.
Rossa Fanning, counsel for the banks, said they were continuing to oppose the examinership process in a situation where, nearly 70 days after it began, his clients had less information about the survival scheme than it had at the beginning and the situation now was “if anything more opaque”.
The longer the process went on, the higher the costs which will have to be met by his clients, he said.
The banks were concerned the proposed investment will be “palpably inadequate” for any survival scheme, Mr Fanning said.
If the court was to put the matter back so that more information can be provided, he wanted that information delivered to his side so the could know if there was any justification for continuing the examinership.