Builder puts up €5m assets for rescue plan

BUILDER JOHN Fleming is putting up €5 million in personal assets as collateral to support a new company that is taking over part of his troubled construction group.

The High Court yesterday heard that a new company, Donban, will buy the Fleming group’s construction contracting arm, while its property development operation, focused largely on a collection of sites in Sandyford, Dublin, will be left under the effective control of the banks.

Three linked companies, Tivway, John J Fleming Construction and JJ Fleming Holdings, are in examinership and under High Court protection from their creditors, to which the group owes a total of €1 billion.

The court heard yesterday that the value of the Sandyford properties over which the banks have secured debts, has fallen by €182 million since the group bought them in 2006.

Under his rescue plan, examiner George Maloney of Baker Tilly Ryan Glennon is proposing that Donban will take over the contracting business and the assets of group subsidiaries Vision Modular Structures and Fusion Building, in return for €3.6 million. This will be used to pay the examiner’s expenses and to pay unsecured creditors.

AIB, Anglo Irish and Bank of Scotland will provide up to €4.5 million to Donban for working capital. Mr Fleming and his wife Noreen, as the group’s shareholders, will put up €5 million of their assets as collateral for Donban. The unsecured creditors are largely made up of subcontractors and suppliers. They will get 25 per cent of their debts spread over two payments in December and February.

Mr Maloney’s counsel, Mark Sanfey, told the court that 96 per cent of unsecured creditors have voted for the scheme.

The secured bank creditors will get 10 years to realise their security. They will have the option of completing the mixed residential and commercial developments at Sandyford.

John O’Donnell, counsel for State-owned Anglo Irish Bank, which is owed €266 million, confirmed that the bank supported the scheme.

ACC Bank, which is seeking the repayment of €21.5 million from Tivway, is opposing the scheme. John J Fleming Construction and JJ Fleming Holdings guaranteed its loan.

The bank’s counsel, Paul Sreenan, argued that as these are unlimited companies, a liquidator or receiver could pursue their shareholders, including Mr Fleming himself.

He pointed out that Vision and Modular were partly owned by Fleming Global, a British Virgin Island-registered business which is a shareholder in John J Fleming Construction.

Mr Sreenan will continue his argument against the scheme when the hearing resumes today.

Show of support for building group

IF LOYALTY cut any ice in company law, the Fleming building group would have few problems getting its rescue plan over the line.

A crowd of the group's trade creditors packed courtroom seven in Dublin's Four Courts yesterday.

Most of them were small subcontractors, and many had travelled from the Bandon area, where Fleming is based, to demonstrate their support for the plan, despite the fact that they stand to lose 75 per cent of what's owed to them. At least a dozen wanted to speak up in court in support of the group. However, Mr Justice Brian McGovern, said he did not want it it becoming "a situation like a golf club agm, where everybody feels they must say something". Instead, Ted Hallisey of Bandon solicitors' firm, PJ O'Driscoll, told the court that winding up the group would cause job losses amongst its subcontractors and damage the west Cork economy.

John Fleming is from Barryroe in west Cork, and most families there have at least one member working for his business.

Mr Hallisey argued that the goodwill displayed by small creditors, all of whom are losing money "is something intangible which the court should take cognisance of".

After the hearing, Mr Hallisey told The Irish Timesthat the Fleming business is "the only show in town" for many of the subcontractors.