Judge to review refusal to approve rescue plan for McInerney firms

A HIGH Court judge will revisit his decision to refuse to approve a rescue plan for two firms in house builders McInerney group.

Mr Justice Frank Clarke said he would review his decision because information that loans obtained by the group from a banking syndicate are likely to be transferred to NAMA was a material fact that was not before the court before prior to his decision to refuse to confirm a scheme that would have allowed the two firms in the group to continue to trade.

The judge had refused to confirm the scheme in relation to McInerney Homes and McInerney Contracting on grounds it was “unfairly prejudicial” to a syndicate of three creditor banks, Anglo Irish Bank, KBC and Bank of Ireland, which between them are owed more than €110 million by McInerney.

The judge, in a judgment delivered earlier this month, said the banks had “a realistic prospect,” of doing better under a receiver, where they claim they would be able to generate €50m over an 11-year period, than under the proposed scheme of arrangement where they would receive €25m as part of a proposed investment from equity group Oaktree.

However, McInerney sought to have the matter reviewed after information it obtained after the judgment that certain loans obtained by McInerney were likely to be transferred to NAMA.

McInerney had argued that in the event of the transfer, the banks would not be in a position to execute their plan to appoint a receiver, thus removing the prejudice claimed by them. The banks argued the information was not new, and opposed the application to have the judgment revisited.

Mr Justice Clarke said he was satisfied to revisit the matter. He said the transfer of loans to Anglo and Bank of Ireland to NAMA (KBC bank is not a participant in the NAMA scheme) was not of itself a material matter.

However, the effect of the transfer on the long term receivership model proposed by the syndicate taking place was of considerable importance when it came to deciding whether or not a survival plan was prejudicial to the banks.

As a result, the judge added that he wished to receive additional evidence from both sides in relation to any proposed transfer.

He adjourned the case to next week.