Application to wind up Treasury deferred

 

THE HIGH Court has adjourned KBC Bank’s application to have Treasury Holdings and 15 related companies wound up.

In his ruling yesterday Mr Justice Brian McGovern said he was satisfied to adjourn the application until October 9th. He was satisfied that KBC would not suffer any prejudice if the case was adjourned.

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 David Carson to 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 €70 million by Treasury arising out of loans advanced for the development of the Spencer Dock project in Dublin.

Nama, which the court heard is owed €1.7 billion, had been neutral to the application at first. 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’s 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.

Lyndon MacCann for KBC argued yesterday that the court should make orders winding up the companies immediately and said his client shared Nama concerns concerning the transfer of assets.

Mr McCann said there were concerns about the timing of this transfer. It was not known if the full value of the assets had been realised. This led to concerns that 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.

Mr MacCann added that 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”.

Michael Collins SC for Treasury had argued that the bank would not suffer any prejudice if a short adjournment was granted.

He 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.

Mr Collins added 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, he said if granted time, the companies could come up with a fresh proposal that would be more attractive for all parties rather than in a winding-up scenario.

Treasury also argued that if liquidated, 300 jobs in Ireland, plus an additional 100 jobs internationally, would 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 began. There would be no further adjournments and the application would be decided on October 9th.

He was not satisfied KBC would suffer any significant prejudice if a short adjournment was granted.

He directed that Treasury Holdings file a sworn statement 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 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 was returned to court.