Court appoints examiner to building firm

Construction:The slowdown in the construction industry has led to the High Court appointing an examiner to a building firm which experienced difficulties in selling residential and commercial units at developments in Balbriggan, Co Dublin, and at Carrickmacross, Co Monaghan.

Appointing the examiner yesterday to McEnaney Construction Ltd, Ms Justice Mary Finlay Geoghegan said she was satisfied there was a "real prospect" of an investor which would enable the examiner to devise a scheme of arrangement providing for the survival of the company, or a substantial part of it, as a going concern.

On that basis, she appointed Michael McAteer, of Foster McAteer, as examiner to the company. The judge also said she would be anxious to see the matter moved on quickly.

Mr McAteer was appointed interim examiner on December 18th last and intends to publish his examiner's report by the end of this month, the judge was told.

McEnaney Construction was incorporated in 1996 and has registered offices at Willow Grove, Carrick Road, Dundalk. In his interim report to the court, Mr McAteer said the company has 14 employees and 45 subcontractors and was engaged in developments of five sites. The total value of those projects was some €67.5 million and the company had borrowings of some €62.5 million, principally to Irish Nationwide Building Society and Ulster Bank. All of the projects were at different stages of development.

The court heard that slow sales of units at the Balbriggan development, and the sale of a number of units at lower than their expected value, were among difficulties which lead to a situation where the banks had told the company no further funds would be available. This meant the company could not fund the ongoing developments and normal building works had ceased at all sites from March 2007.

The largest site owned by the company, at Armagh Road, Dundalk, had been marketed in May 2007 but, because of the current economic climate in the building sector, no offers were received and the company's negative assets now stood at €5.2 million, the judge was also told.

The interim examiner's report stated that negotiations with an interested party relating to a potential investment and refinancing of the company were substantially concluded.

Reports from the interim examiner and an independent accountant expressed the view that, subject to such investment and the approval of a scheme of arrangement, the company or a substantial part of it has a reasonable prospect of survival.