Judge ‘reluctantly’ extends McInerney court protection

A JUDGE yesterday extended High Court protection for the McInerney construction group until December 3.

Mr Justice Frank Clarke said his decision to extend the period of examinership for five McInerney companies was done with “considerable reluctance” as he had not concluded, at this stage, there was no realistic chance of the examiner coming up with a survival scheme which could succeed. However, it might be possible that the examiner William O’Riordan could come up with a better scheme if examinership was extended.

The court has heard that valuations on property owned by the group is now estimated to be worth between €25 million and €30m as against a €194m figure put on it last year.

It is security on a number of bank debts, including €115m owed to a syndicate of three banks, KBC, Bank of Ireland and Anglo Irish, who have strongly opposed the continuation of examinership.

US private equity house, Oaktree Capital has been in negotiations with the examiner to take a stake for €40m in the group, which has businesses in the Republic and England and is willing to invest €10m in the Irish operation as part of a rescue plan.

Mr Justice Clarke said yesterday the key question over whether court protection should be continued was whether any scheme would be unfair to the syndicate of banks.

He concluded that while the existing proposals are likely to be unfair, it was possible that the examiner may be able to negotiate a better deal with Oaktree if the examinership continued. He added, however, that it was important the concerns he expressed be taken into account as they would be important to the approval by the court of any survival scheme.

The survival plan will be ready by Friday. There will be a meeting of McInerney’s creditors on November 19, the court heard.