Creditors of Lark Developments approved a survival plan for the troubled building company at a meeting in Dublin yesterday.
They also received a commitment that the company's interest in Johnstown House Hotel in Co Meath, which is at the root of its problems, would be sold within the next four years with any funds recovered going to creditors.
A majority of creditors voted in favour of the scheme of arrangement put forward by Lark's examiner, Mr John McStay, which would allow the company to remain in business.
Lark director Mr Tony Murray described the news as "tremendous. It gives us breathing space to look forward and get planning permissions through", he said.
Mr McStay must now submit a report on his findings to the High Court, which appointed him to try to rescue the Lucan-based firm last November. The report must be submitted by Friday and the High Court will then decide whether to accept the rescue plan or place the company in liquidation.
Lark, which has been building houses and developing industrial parks since 1979, ran into difficulties with debts of around €29 million (£23 million) last year after an ill-fated investment in the Co Meath hotel development.
The survival plan was approved, with two modifications, by a majority of creditors, including unsecured creditors, at yesterday's four-hour long meeting. One was a confirmation and clarification of the claim by the Office of the Revenue Commissioners.
The other modification involved the appointment of an independent nominee to hold Lark's 79 per cent interest in the Johnstown hotel in trust for creditors. Mr Charles Kelly, a solicitor based in Swinford, Co Mayo, was appointed to hold the shares in the hotel which the company has undertaken to sell in the next four years. Previously, Mr Murray was to hold the shares but he has agreed to the modification.
Under the terms of the survival plan, Mr Murray will invest €10,000 in Lark initially and then advance a loan of €3 million within three months to help meet the company's liabilities.
Unsecured creditors - which comprise the largest group of those owed money - will be repaid 15 cents in the euro within 12 months. They will also be entitled to further payments of an estimated 11 cents from the sale of certain company properties.
