High Court to rule on €48m McInerney rescue in January

THE HIGH Court will rule on the €48 million rescue proposal for house-builder McInerney on January 10th after the latest stage in the examinership process ended yesterday.

The group’s Irish business has been under High Court protection from its creditors and in the charge of examiner Bill O’Riordan of PricewaterhouseCoopers since September.

Mr Justice Frank Clarke told the parties yesterday that he will deliver his ruling on the rescue plan – known as a scheme of arrangement – put forward by Mr O’Riordan on January 10th.

The proposals involve a new investor, Oaktree Capital, paying a syndicate of three banks, Anglo Irish, Bank of Ireland and KBC, €25 million cash in full settlement of a secured €113 million debt.

Creditors other than the banks will get €2 million, unsecured creditors will be paid 7 per cent of what they are owed.

The banks are opposed to the examinership process and the rescue scheme, and argue that they would fare better in a receivership. They have drawn up an 11-year plan for the receivership during which period they believe that they could recover up to €75 million.

If the judge rules against the plan, it will mean that McInerney’s Irish business will end up in either receivership or liquidation.

If he rules in its favour, it will mean that US-based Oaktree will take over McInerney’s Irish business. It has pledged to provide it with €5 million in initial working capital and will put aside a further €15 million for future investment in the business.