THE HIGH Court will rule next week on whether to approve a rescue plan for two firms in the housebuilder McInerney group.

Mr Justice Frank Clarke last month refused to confirm the scheme for McInerney Homes Ltd and McInerney Contracting Ltd on grounds it was “unfairly prejudicial” to a syndicate of three creditor banks, Anglo Irish Bank, KBC and Bank of Ireland, owed more than €110 million by McInerney.

The judge had ruled the banks had “a realistic prospect” of doing better under a receiver.

The banks had claimed they would be able to generate €50 million over an 11-year period of receivership when, under the alternative scheme of arrangement proposed, they would get just €25 million as part of a proposed investment from equity group Oaktree.

Mr Justice Clarke later agreed to reconsider the matter after the company argued it had new information – that it was “highly likely” the banks’ loans would be transferred to Nama and such transfer would remove any prejudice to them.

After hearing submissions yesterday from the relevant parties, the judge said he would give judgment on the scheme next Thursday at a sitting of the High Court in Cork. He would not make final orders in the case until the following Monday so the sides could consider his decision.

In urging approval of the scheme, John Hennessy SC, for the company, said in the “highly likely” event of the loans transfer to Nama, the bank’s plan to appoint a receiver and wind down the firms over a period of 11 years “would never happen”.

Bernard Dunleavy, for the examiner of the group, said the examiner believed approval of the scheme was in the best interests of creditors, the company and the 109 McInerney employees.

Rossa Fanning, for the banking syndicate, argued there was no basis for the court to change its previous decision rejecting the scheme.

The company’s claim that information about loans by Anglo and Bank of Ireland to McInerney being acquired by Nama amounted to new evidence was “a puff of smoke” and “a red herring”, Mr Fanning added.

Nama had remained neutral towards the loans and the agency had never been “off the pitch” as contended by McInernery.

A lawyer for Nama had been in court during the earlier proceedings and, if Nama was out of the equation, what was their legal representative doing in court, Mr Fanning said.

The Revenue Commissioners, who are also creditors of the company, were no longer objecting to the scheme being approved, the court also heard.