Action to wind up Treasury adjourned
The High Court has adjourned KBC Bank’s application to have Treasury Holdings and 15 related companies wound up.
In his ruling today, Mr Justice Brian McGovern said he was satisfied to adjourn the application till October 9th next.
He said he was not satisfied KBC Bank would suffer any significant prejudice if a short adjournment was granted to Treasury Holdings.
The petition had raised complex issues, involved a significant number of companies, and large sums of money that clearly required “detailed consideration,” he added.
KBC petitioned the Court to have Treasury and the other companies wound up and insolvency practitioner Mr David Carson be appointed as liquidator on the basis the firms are wholly insolvent and unable to pay their debts.
The bank claims it is owed more than €70m by Treasury arising out of loans advanced for the development of the Spencer Dock project in Dublin.
NAMA, which the court heard is owed €1.7bn had been initially neutral to the application. However yesterday it changed its stance, and supported KBC’s application.
This was in light of the “serious concerns” it had following an announcement that assets of a Treasury subsidiary in Singapore had been transferred to a company in the Channel Islands beneficially owned by a director of Treasury, Richard Barrett.
Treasury and the related firms, which accept that they are insolvent and that money is owed, opposed KBC’s application.
It lawyers sought an adjournment of the petition on grounds including that the bank may get a better outcome if an investor can be secured to acquire the companies loans compared to if a liquidator was appointed.
Today Lyndon MacCann for KBC argued that the court should make orders winding up the companies immediately said that his client shared Nama concerns concerning the transfer of assets.
Counsel said that there were concerns about the timing of this transfer. It was not known if the full value of the assets had been realised.
This lead to concerns that assets of the Treasury subsidiary may be “denuded of its assets” and that creditors such as KBC and Nama may not be able to recover these assets.
Counsel said that while US multinational financier Morgan Stanley had already tendered a proposal to KBC to take over the loans. However KBC had rejected Morgan Stanley’s proposal because it “did not make commercial sense,” he added.
Michael Collins SC for the bank had argued that bank would not suffer any prejudice if a short adjournment was granted.
Counsel said the transfer of assets in the Far East and Nama’s subsequent support for the petition did not make any difference to the petition to wind up.
The reason behind the move was to protect the firm’s reputation arising out of the KBC’s application to have it wound up.
Counsel said that the market value had been obtained for the assets in the transfer, and there was no suggestion that the assets were being moved beyond the reach of any creditors.
In seeking the adjournment said that if granted time the companies could come up with a fresh proposal that would be more attractive for all parties rather than a in a winding up scenario.
Treasury also argued that if liquidated 300 jobs in Ireland, plus an additional 100 jobs internationally, will be lost.
In his ruling Mr Justice McGovern said while KBC was entitled to bring the petition he was prepared to grant a short adjournment, to October when the new legal term commences.
There would be no further adjournments and the application will be decided on one way or another on October 9th.
He not satisfied KBC would suffer any significant prejudice if a short adjournment was granted.
The Judge directed that Treasury Holdings file a sworn statements outlining the terms and circumstances of a transfer of the assets of a Treasury subsidiary in Singapore to a company controlled by Mr Barrett.
He further accepted an undertaking by Treasury that there would be no disposition by any companies in the group of their shares and assets before the matter returned before the Court.
As well as Treasury Holdings itself KBC is further 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.