Carroll empire edges closer to collapse

THE business empire of one of the country’s leading property developers, Liam Carroll, moved one step closer to collapse after a liquidator was appointed to two of his companies.

ACC Bank moved swiftly to seek repayment of €136 million which it is owed by two of the six firms in Mr Carroll’s Zoe Developments group that were unsuccessful in seeking the protection of the Supreme Court from its creditors earlier this week.

However, the position of seven other financial institutions that are owed around €1.1 billion by the companies remains uncertain.

Representatives of several banks held a meeting in Dublin yesterday to discuss the impact of the court ruling and the possibility of a co-ordinated approach to dealing with Mr Carroll.

All banks declined to comment last night.

Lawyers for ACC told the High Court that two of the companies, Vantive Holdings and Moston Investments, were “grossly insolvent”.

Mr Justice Iarfhlaith O’Neill granted the appointment of accountant Declan Taite, of Farrell Grant Sparks, as a provisional liquidator pending a full hearing on September 9.

Legal experts expressed surprise last night that ACC did not choose to have a receiver appointed instead of a liquidator as it would have given the bank more control over the sale of the assets.

In his role as liquidator, Mr Taite will seek to arrange the orderly wind-up of the companies.

It is widely believed the major sites owned by the companies will be transferred to NAMA as the Government’s 'bad bank' offers the lending institutions the best return on their money in the depressed state of the property market.

However, the liquidation could trigger the total collapse of Zoe Developments as Mr Carroll has stated in legal documents that all the companies are highly interdependent. It also threatens 115 jobs in the six companies plus 485 sub-contract staff across the group.

Meanwhile, the debate on the potential impact of the liquidation on NAMA continued yesterday.

Prof Brian Lucey of TCD challenged the Department of Finance’s assertion that the Supreme Court ruling would have no difference on the timing and operation of NAMA.

Speaking on RTÉ radio, Prof Lucey said the Government had to ask itself if it could justify spending up to €70bn on assets with a market value of around €30bn.

Fine Gael finance spokes-man Richard Bruton said the judgment in Mr Carroll’s case exposed a “fatal flaw” in NAMA’s structure as it could result in taxpayers paying billions over the odds for toxic bank debts.