Property developer Michael O’Flynn has reached a deal with the US private equity firm that sought to gain control of his empire last year.
Blackstone Capital said yesterday that following constructive engagement with O’Flynn Construction Group in recent weeks, both parties had reached agreement for “a consensual resolution” of their ongoing dispute which dates back to the middle of last year.
A spokesperson for the O’Flynn Construction Group, which is responsible for Ireland’s tallest building ‘The Elysian’ in Cork City, described the deal as a “final agreement” between the two parties both of which, he said, were happy with the outcome and looking forward to finalising the agreement.
The standstill arrangement to adjourn their legal battle until yesterday — which was arrived at after the O’Flynn Group submitted a plan at the end of October to pay up to €400m to Blackstone — will be extended until February 13, by which time all details as to how the business will proceed will have been finalised, the spokesperson said.
Last July, Blackstone and its subsidiary, Carbon Finance, had an interim examiner appointed to four companies within the O’Flynn Construction Group in a move the Cork developer’s lawyers later described as “an elaborate and sophisticated, yet ultimately hamfisted, blitzkrieg” to gain control of the group.
The dispute arose when, following the O’Flynn Group’s exit from Nama in May 2014 after four years as part of the State’s bad bank, its loans were bundled up and sold for €1.1bn to Blackstone at a discount of approximately €700m.
On July 29, 2014, Carbon requested payments of personal loans taken on by Mr O’Flynn in early 2013 as part of a restructuring agreement with Nama.
Carbon Finance subsequently appointed receivers to the O’Flynn Group’s British Virgin Islands-based parent company which it said put the property group into default.
This move paved the way for Carbon to seek the appointment of an interim examiner on the grounds that the group was insolvent.
At the time, Mr O’Flynn said he was “completely surprised and shocked” by the move as, he claimed, all of the O’Flynn Group loans and some separate personal loans were fully serviced and all payments were up to date.
In a major victory for Mr O’Flynn, Ms Justice Mary Irvine ruled in the High Court in August against Blackstone, and Michael and his brother, John, had control of their property empire temporarily returned to them.
Blackstone was found to not have acted in good faith when it applied for the interim examiners to be appointed to €1.4bn worth of loans.
Further details of yesterday’s agreement will be announced in two weeks.
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