TREASURY HOLDINGS and 15 related companies are wholly insolvent and should be wound up, lawyers for KBC bank told the High Court yesterday.
The bank, which claims it is owed more than €70 million by Treasury arising out of loans advanced for the development of the Spencer Dock project in Dublin, has petitioned the court to have Treasury and the other firms wound up and to have David Carson appointed as liquidator.
Treasury and the related firms have opposed KBC’s application. They argue that, if liquidated, 300 jobs in Ireland, and 100 more internationally, will be lost.
Mr Justice Brian McGovern was told yesterday that US finance house Morgan Stanley had tendered a proposal to KBC to take over the loans. That would result in the bank getting a better price than the market value for Treasury’s assets if the company was wound up, the court heard.
Lyndon MacCann SC, for KBC, said the bank had rejected the Morgan Stanley proposal on the basis it “did not make commercial sense” from KBC’s perspective.
Counsel said the High Court last month dismissed Treasury’s challenge to the National Asset Management Agency’s decision to call in more than €1 billion of its loans and to appoint receivers over its properties in Ireland.
Ms Justice Mary Finlay Geoghegan found at that time a standstill agreement between the two parties made in January – under which Treasury agreed not to take legal action against Nama – effectively ended Treasury’s right to seek a judicial review of Nama’s decision. Treasury intends to appeal that ruling to the Supreme Court.
After that judgment, KBC, a notice party to the proceedings, made a demand for payment on the developers and 15 related companies.
Mr MacCann said his client was part of a banking syndicate that extended loans of €270 million to Treasury Holdings and related companies for the Spencer Dock project. KBC provided 25 per cent of the total, counsel added.
Those loans were long overdue and counsel said his client was entitled to take steps to recoup the funds. Counsel rejected claims KBC was not entitled to petition the court to have the firms wound up. Counsel said a request for an adjournment of the petition was “simply asking the court to allow Treasury trade while wholly insolvent”.
Michael Collins SC, for Treasury, said while it was accepted the companies were insolvent and the money was owing, KBC was not entitled to make the application, as it is a minority party of the syndicate.
Counsel said the court should use its discretion to adjourn the winding-up application.
As well as Treasury Holdings itself, KBC is seeking to have related companies, including Spencer Dock National Convention Centre Hotel, Spencer Dock Development Company, Faxgore Ltd, Querida Ireland Holdings Ltd and Robheat Ltd wound up.
The hearing continues today.
