A last-minute challenge to court approval for a survival scheme for key companies in construction giant SIAC has placed the companies and the jobs of 219 employees “in peril”, the Supreme Court was told yesterday.
Approval of the scheme is “a matter of commercial life and death”, counsel for SIAC said.
Chief Justice Susan Denham agreed to hold a priority hearing next week of the appeal by the Polish Roads Authority, owed €70m by SIAC companies, against the High Court’s approval of the scheme.
The scheme was due to come into operation yesterday but has now been deferred until Tuesday, when a three-judge Supreme Court will hear the appeal.
Bill Shipsey, for the Polish Roads Authority, a State authority, said it is unfairly prejudiced by the scheme as it does not allow for any dividend for those SIAC creditors making damages claims.
The Polish Roads Authority has paid out to some creditors of SIAC. The company itself is also involved in substantial litigation in Poland, claiming some €120m arising from its involvement in road projects there.
Urging an early hearing of the appeal, Bernard Dunleavy, for SIAC, said the appeal posed “enormous difficulties” for SIAC and was coming “very late in the day”. The authority had only become involved in the High Court proceedings last Tuesday, he added.
Mr Dunleavy said a planned €10.5m investment, which is key to the scheme, may not be available after next Tuesday and that this was “a matter of commercial life and death”, with 219 jobs “now in peril”.
The survival scheme was dependent on the €10.5m investment, but the investor had indicated the scheme must come into effect by Tuesday, counsel said. If the Supreme Court reserves judgment on the appeal next week, that may be too late, he added.
James Doherty, for the companies’ examiner Michael McAteer, said the uncertainty “causes all sorts of difficulties”, including with ensuring the companies’ banker creditors release securities and provide funding. He supported an urgent hearing.
Mr Justice Peter Kelly last Friday gave the go-ahead for survival proposals involving the €10.5m investment in the company, with about €5m going to secured banker creditors — Bank of Ireland, Bank of Scotland, and KBC are owed some €42m.
The companies have 1,255 creditors — 876 Irish/UK and 379 Polish creditors — and most of those will get between 5% and 10% of what they are owed. About €2m of the €10.5m was to be allocated for working capital while the costs of the examinership will be €400,000 to €500,000.
Mr Justice Kelly noted the examiner was satisfied the scheme would place the companies on “a sound commercial footing” and that they had an “impressive” list of contracts into the future.
The court previously heard the companies’ workforce could be reduced by 30 or 40 people under the scheme, which involves the group being effectively split into two, an operating division and a property holding division.
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