The High Court has lifted an injunction restraining Bank of Scotland selling to a hedge fund loans of €67m owed to it by a shipping company that employs more than 300 people.
The Doyle Group wants to refinance its Bank of Scotland loans with Ulster Bank and claims the proposed sale to the Blue Bay fund could be damaging for it and its workers.
A holding company for several firms providing shipping and warehousing services at all major Irish ports, the Doyle Group claims the bank’s attempt to sell the debt to a third party amounts to a breach of a May 2012 agreement between the parties.
Earlier this month, the group secured an interim injunction restraining Bank of Scotland transferring to any third party any right, interest, or obligation under that May agreement and it wanted the court to extend that order pending the full hearing of the dispute.
In his ruling yesterday, Mr Justice John Cooke said he was satisfied to lift the injunction previously granted by the court. The judge said while the Doyle Group had made out an arguable case against the bank, the court was satisfied that any damages the company may have suffered was quantifiable.
Therefore, as he held that damages could be an adequate remedy — should the Doyle Group succeed at the full hearing of its dispute — the injunction must be discontinued. The matter will be mentioned before the Commercial Court, the big business division of the High Court, early in the New Year.
In its action the group says it was in the process of refinancing its Bank of Scotland loans with Ulster Bank when it learned last month, much to its surprise, that Bank of Scotland had entered into a second process concerning selling the group’s debt to third parties.
It claims Bank of Scotland, which wants to exit the Irish market, is seeking to sell its debt for €53m to the Blue Bay investment fund when it had been represented to Bank of Scotland no such assignments should happen. That sale is due to close shortly, the court heard.
The company fears that if the debt is sold to the hedge fund, its assets could be stripped down and sold off, ultimately destroying the companies and affecting several hundred jobs.
Bank of Scotland had asked the court to lift the injunction. It denies it has acted in breach of its agreement with the Doyle Group and also claims Blue Bay will act no differently than the bank in dealing with the Doyle Group.
Bank of Scotland claims it has entered into a deal with Blue Ray to sell on the loan and fears it may suffer damage if that does not go ahead.
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