McInerney under court protection for another month

TROUBLED BUILDING group McInerney Homes will remain under the High Court’s protection from its creditors, including a three-bank syndicate to which it owes €115 million, for another four weeks.

The court yesterday continued court protection for McInerney Homes and a number of related group companies until December 3rd. Mr Justice Frank Clarke said he was extending the period of examinership with “considerable reluctance”.

He had not concluded there was no realistic chance of the examiner coming up with a survival scheme which could succeed. It might be possible that the examiner, Bill O’Riordan of PricewaterhouseCoopers, could come up with a better scheme if examinership was extended, he said.

A report from Lisney’s indicates the group’s properties and work in progress are worth between €25 million and €30 million. This is against €40 million when the group first had an examiner appointed and was placed under court protection in August.

It is understood Lisney’s calculation is based on what it believes the properties would be worth in a situation where they were being sold in a liquidation or receivership, and not as a going concern.

The group owes €115 million to a syndicate of three banks – KBC, Bank of Ireland and Anglo Irish – which is opposed to the examinership.

US private equity house Oaktree Capital is poised to take a stake in the group, which has businesses in the Republic and England, for €40 million. It is committed to investing at least €10 million in the Irish operation.

Mr Justice Clarke said yesterday the key question on whether court protection should be continued was whether any proposed survival scheme would be unfair to the syndicate of banks. The court was told a survival plan would be ready by Friday and there would be a meeting of McInerney’s creditors on November 19th.

Once the examiner’s plan has the backing of at least one group of creditors whose rights are being affected, it can then go to the High Court for approval.

If any creditor can show they would fare better in a receivership or liquidation than under the terms of the examiner’s survival plan, then the court can rule against it. McInerney’s bank syndicate has argued all along that it would recover more of its debt in a “slow burn” receivership.