Banks trying to run McInerney into the ground, court hears

THREE BANKS owed €113 million by housebuilder McInerney are proposing a scheme involving “simply running the business into the ground” and taking what they can from it, when a proposed new investor in the company would save jobs and help regenerate the property market, counsel for McInerney has argued before the Supreme Court.

Senior counsel John Hennessy, for McInerney, was opening an appeal by the company against a High Court decision last February rejecting a rescue plan for the business.

The appeal is expected to last three days.

In the High Court last February, Mr Justice Frank Clarke ruled the rescue plan would be prejudicial to Belgian bank KBC and refused to confirm it.

The judge made his final ruling in February after being asked to reconsider an earlier judgment in which he found the rescue plan was prejudicial to all three banks on the basis of new information.

Counsel submitted the judge’s conclusions in his first judgment were wrong and he was also incorrect in finding KBC, the only “non-Nama bank”, was unfairly prejudiced in the most recent judgment.

Mr Hennessy said McInerney was a 100-year-old company with a proven track record in the building business, a recognised brand name and employer of 109 people.

The survival scheme put forward would save the jobs, help regenerate the property market and bring inward investment of at least €35 million into Ireland at a time when such investment was very welcome, Mr Hennessy said.

The company planned to buy new sites, build more homes and continue “a very lucrative business”.

“The banks’ approach is simply to run this business into the ground and take what they can from it,” counsel said. While there might be some jobs saved, this would only be in the short term, he added.

Mr Hennessy said McInerney had been a successful business and was in the process of dealing with its difficulties last year, including obtaining new investment, when the “rug was pulled” from under it by the banks “overnight”, without warning, last August.

The appeal, before a five-judge court, continues.