O’Flynn puts Blackstone on the back foot after ruling

The private equity firm that briefly seized control of the O’Flynn Group has been forced into retreat and dressed down for failing to disclose key pieces of information to the High Court.

Ms Justice Mary Irvine said Blackstone and its subsidiary, Carbon Finance, had not acted in good faith when it applied for interim examiners to be appointed to €1.4bn worth of loans.

She said an inaccurate impression had been created that the O’Flynn Group and its principal shareholders, Michael and John O’Flynn, were uncooperative.

She said when Carbon made its application to appoint an examiner on July 29, it should have disclosed all material information on its relationship with the O’Flynn Group, but it had not.

The judge said it was not good enough for Carbon to say the O’Flynn Group was insolvent to justify its application. It also needed to show exceptional circumstances existed, and key information on this matter had been withheld.

On these grounds, she put the O’Flynns back in control.

Ms Justice Irvine said, given the “speed, diligence and determination” of Carbon in the last fortnight, she could not predict what the O’Flynn Group would look like if it was left in control until a full hearing could take place in October.

She said the interests of the company would not suffer if the Cork brothers remained in charge until that hearing.

“The O’Flynns have never failed to meet the payments due under these personal facilities and Carbon has not exhibited ... documentation or correspondence demonstrating that they were clearly not going to be able to get the money, if demanded of them, within whatever the court would consider to be a reasonable time,” Ms Justice Irvine said.

After the hearing, Carbon said it would review the judgement but it believed its actions were “necessary and appropriate”.

“Carbon will continue to safeguard its position as significant creditors of the O’Flynn Group,” it said.

On the eve of the judgement, Michael O’Flynn had released a statement to say he was in a position to pay off €25m to clear his personal loans. Yesterday, he said this would be finalised on Friday.

Carbon said it looked forward to receiving this.

Outside the Four Courts, Michael O’Flynn praised his legal team and his supporters for their help.

He said he would continue to defend his position.

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