High Court to revisit McInerney case

A High Court judge will revisit his decision to refuse to approve a rescue plan for two McInerney group firms.

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 Ltd and McInerney Contracting Ltd 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 €110m 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 hat certain loans obtained by McInerney were likely to be transferred to NAMA.

McInernery 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 had argued that the information was not new, and opposed the application to have the judgment revisited.

Today Mr Justice Clarke said that he was satisfied to revisit the matter. He said that 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.

The probability, the Judge added, that the loans would be transferred to NAMA was a material fact which was not before the court when his decision was made.

The Judge said that while NAMA said it has made no decision in relation to the transfer of Anglos and Bank of Ireland's loans to the McInerney companies correspondence between the parties had revealed that it was possible that a transfer may soon take place.

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

The Judge also said that both McInerney and the banking syndicate were to blame for not dealing with the prospect of NAMA taking over the loans in the original hearing.

The Judge, who adjourned the case to next week, also expressed his hope that the matter could be finalised "as soon as possible".