The National Assets Management Agency (Nama) is opposing the appointment of an examiner to five companies in the Whelan Group, one of the largest concrete products suppliers in the country employing 120 people.
The High Court will hear the petition for examinership on Friday.
Nama has taken over some €50 million debts owed to Anglo Irish Bank by the Whelan companies and is opposed to examinership because of a proposed large write down of the debts of secured creditors.
The Whelan companies, based in Ennis, Co Clare, say they have a consolidated deficit of some €10 million as a going concern rising to about €50 million if placed in liquidation.
They say, if a survival scheme is formulated and approved and a programme of cost-cutting measures and sale of non-core assets put in place with outside investment, the group could return to profitability next year and their underlying business is sound. If examinership is refused, the prospects are "bleak" for creditors and employees, they said.
In the first petition for examinership involving Nama, the companies largest secured creditor, the agency is opposing court protection. Rossa Fanning, for Nama, said this opposition was in circumstances where a large write down of the debts of the companies secured creditors was being proposed.
Irish Cement Ltd, owed €4 million of a total €10 million owed to unsecured creditors and Lagan Cement, owed €383,000, are also opposing examinership. John Breslin, for Lagan, said it has brought a petition to wind up Whelan's Limestone Quarries Ltd (WLQL), one of the five companies seeking protection and the "engine company" of the group, and that petition has been adjourned to December 13th.
The Revenue Commissioners, owed some €641,000 has adopted a neutral position on the petition.
Mr Justcie Brian McGovern today adjourned the hearing of the companies petition to Friday after being told the companies needed time to reply to the issues raised by NAMA and others.
The five companies involved are Whelan Group (Ennis) Ltd (WGEL); Whelans Limestone Quarries (Contracts) Ltd (WLQCL); Whelans Limestone Quarries Ltd (WLQL); Whelans Quarries (Carraigtwohill) Ltd (WQCL) and Shannon Explosives Ltd (SEL). In its petition, the group says WLQL is the principal trading company in the group and the financial survival of all five companies is intrinsically linked with the financial stability and survival of WLQL.
The companies secured court protection from the High Court on November 22nd last pending the hearing of the petition for examinership and they remain under protection until the petition is determined.
John O'Donnell SC, for the companies, said Anglo had informed the group it was neutral on the application for court protection and his client was not aware until very recently Nama was opposing the petition. He was also concerned the agency had not yet filed its affidavits when 120 jobs and many creditors were affected.
In the circumstances where affidavits had to be filed and replied to, it was inevitable the case would have to be adjourned but his side wanted it heard on Friday, not December 9th or 10th as Nama was suggesting.
Mr Fanning said it was only after November 24th Nama became aware of the proposal for a substantial write down of the debts of secured creditors. There had been a formal credit committee meeting of Nama to discuss the matter, this was the first examinerhsip in which Nama was involved as a creditor and it had never indicated it would adopt a neutral stance on this petition.
The very antithesis of Nama's statutory purpose was to write down a secured debt and there were very serious public policy issues, counsel added.
Mr O'Donnell said the Nama legislation does not say debts cannot be written down and Anglo had made clear it was adopting a neutral position.
Bill Shipsey SC, for Irish Cement, and Mr Breslin, for Lagan, said they wanted the petition heard as soon as possible.
Mr Justice McGovern said the petition would be heard on Friday and he made directions for the exchange of affidavits between the sides.
