THE HIGH Court has withdrawn its protection from building group McInerney with effect from 2.30pm on Friday after Mr Justice Frank Clarke confirmed his refusal of a proposed rescue plan for the company.
The McInerney group was placed into examinership and put under the protection of the High Court last September, with debts totalling €113 million owed to Belgian bank KBC, Bank of Ireland and Anglo Irish Bank.
A rescue plan had been drawn up involving US private equity fund Oaktree Capital, which had made an offer of €25 million in full settlement of the €113 million owed to the three-bank syndicate.
Mr Justice Clarke last Thursday delivered a reserved judgment in which he ruled that the rescue plan was unfairly prejudicial to KBC. He adjourned finalising the order until yesterday to allow for submissions.
The court heard yesterday that Oaktree Capital wrote to the examiner, Bill O’Riordan of PricewaterhouseCoopers, at the weekend, increasing its offer by €6.6 million from €25 million to €31.6 million.
Rossa Fanning, for the banking syndicate, argued that Oaktree had already made its best offer and could not revisit it. The court’s judgment last week was not a negotiating position or an invitation to Oaktree to come back with another offer.
Mr Fanning said Oaktree was now “playing ducks and drakes” with the process by increasing its offer over the weekend after Mr Justice Clarke gave his judgment last Thursday. He said that to ask the court to entertain the proposal was an abuse of process.
John Hennessy SC, for McInerney, said the court should not ignore the commercial reality which was that it made sense for Oaktree “to put their money where their mouth is” and make an increased offer.
Bernadette Quigley, for Oaktree, said she categorically rejected any suggestion that her client was playing “ducks and drakes”. Oaktree was a long-term investor which had offered additional funds and there was no question of any insult to the court.
Mr Justice Clarke thanked the parties for their submissions and rose to consider the matter, returning to confirm his earlier order refusing approval for the rescue plan involving the Oaktree offer to invest in the company.
He said it would not have been an abuse of process for Oaktree to increase its offer even after hearing the case in January but prior to judgment last Thursday. However, to do so after Thursday’s judgment was, he believed, an abuse of process.
“It would be fundamentally inconsistent with basic principles of law to allow the matter to be now reopened. It is now too late. If it was to be put on the table it should have been put on the table before now.”
Mr Fanning applied to have Ciarán Wallace and Pádraig Monaghan of KPMG appointed as joint receivers for the company and he asked the court to make an order with immediate effect whereby the McInerney companies would no longer be under the protection of the court.
Mr Hennessy for McInerney asked for a short stay of a few days to allow him to take further instructions from his clients as to whether they wished to appeal the ruling to the Supreme Court.
Mr Justice Clarke said he would grant such a stay, albeit with some reluctance, and he deferred his order removing the companies from the protection of the court until Friday at 2.30pm.
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