O’Gara on sidelines of O’Flynn v Carbon

One of the names that cropped up in the legal documents opened in the O'Flynn Group v Carbon Finance High Court case was that of former Munster and Ireland outhalf Ronan O'Gara.

He is named as one of a group of people who borrowed cash from Anglo Irish Bank and Irish Nationwide along with the O'Flynns for various projects. Those loans were passed to Nama and in turn to Blackstone, which bought the group's €1.8 billion debt for €1.1 billion. A demand from Blackstone subsidiary Carbon Finance that Michael and John O'Flynn repay €16.7 million of this debt triggered the receiverships and examinership that led to this week's trial.

O’Gara is not in any way involved in the court case. Carbon only sought the money from the O’Flynns, but an affidavit shows he and Michael O’Flynn borrowed cash in relation to two companies, Ezeon Enterta- inment and Levrio Investments. The two Corkmen are known to be friends – O’Fly- nn organised O’Gara’s testimonial dinner.

The O'Flynns were parties to nine individual facilities from AIB, Bank of Ireland, Anglo and Irish Nationwide between 2003 and 2009 that had a total of almost €34 million. At this stage €24.9 million is due, but Carbon sought only €16.7 million.

The case has caught the attention of Nick Leeson. The most recent edition of his blog argues that all the funds buying loans from Nama are looking to recoup their cash quickly. "In the absence of you not being able to buy out your loan, the likelihood is that they will engineer default, break up your businesses and sell to the highest bidder," he wrote.

He advised that the only thing borrowers could do is re-acquire the loans from these funds as quickly as possible. He has a point, but if somebody does not have the means to do this it is harder than it sounds.

There is, of course, one way of doing it that does not require immediate repayment of the debts: examinership.

While Carbon is a creditor and is using this as a way of recouping its money, it would be more normal for a borrower to take this route. As Nama sells more loans to the venture funds, there are bound to be a few borrowers who try examinership as a way of retaining or cementing control.