Examiner ‘will benefit O’Flynn companies’

Examinership would undoubtedly be of benefit to the four insolvent Cork-based O’Flynn construction companies and for the benefit of their employees, the High Court has been told.

Eoin McCullough, counsel for Carbon Finance Ltd which was last week granted the appointment of an interim examiner to the companies, made the point when opposing a bid by brothers, Michael and John O’Flynn, to overturn the appointment.

Mr McCullough said the alternative was to leave the companies, if not in examinership, open to the strong risk at any stage of insolvency proceedings that would attack all of their assets.

“Come what may, the fact is that these companies are grossly insolvent and that was not brought about by the appointment of receivers by Carbon Finance,” Mr McCullough told Ms Justice Mary Irvine.

Mr McCullough said the O’Flynn group of companies owed €1.8bn, a debt Carbon had taken over from Nama, and would never be in a position to repay.

He will finalise his legal submissions today, when, he said, an independent accountant’s report would be furnished to the court.

Ms Justice Irvine has been asked by the O’Flynns, on behalf of their companies — O’Flynn Construction Co; O’Flynn Construction (BTC); O’Flynn Construction (Rochestown); and Eastgate Developments (Cork) — to grant them an interlocutory injunction dismissing the interim examiner.

The O’Flynns are also seeking damages from Carbon Finance, an Irish-registered affiliate of the US Blackstone investment group, alleging their companies had been wrongfully taken from them by having been put in receivership and then into examinership.

In an affidavit on behalf of himself and his brother, Michael O’Flynn told the court he had never been insolvent and had never defaulted on repayment of a personal loan. He claimed he had not been given time by Carbon to arrange a new borrowing facility to repay their loan demand.

Mr O’Flynn, of Beckett House, Barrack Square, Ballincollig, Co Cork, alleged Carbon Finance had deliberately set out to gain control of the companies by issuing a letter of demand on the €16m loan which could not be met in the timescale available.

He said the publicity the appointment of the interim examiner had attracted last week, together with a High Court order directing co-operation with Carbon, had been extraordinarily damaging to him personally and to the companies.

The case continues today.