Unsecured creditors owed €26m from Siac deal may get part of it back

Irish construction group and its Polish partner are filing claims worth €214m

Siac’s survival plan called for a percentage of the proceeds from litigation it was planning  to be paid to unsecured creditors. Photograph: Dara Mac Dónaill

Siac’s survival plan called for a percentage of the proceeds from litigation it was planning to be paid to unsecured creditors. Photograph: Dara Mac Dónaill

 

Unsecured creditors who lost most of the €26 million owed to them when building group Siac had to be rescued in early 2014 appear to stand some chance of getting a part of this back.

Siac’s survival plan, put together by High Court-appointed examiner Michael McAteer, called for a percentage of the proceeds from litigation, which the Irish group was planning in Poland, to be paid to unsecured creditors.

The group and its various subsidiaries owed them €26 million when it sought the court’s protection in late 2013. Back then, a dispute over a €400 million motorway-building contract in Poland ended up threatening its survival. Those creditors received 5 per cent of this, along with the promise of a payout should Siac’s litigation succeed.

The Irish company and its Polish partner are filing claims totalling €214 million and Siac’s share of this would be more than €100 million, were it to win and the forums in which the claims are filed all award the full amounts that the partners are seeking. Siac Construction’s accounts acknowledge that unsecured creditors of a number of group companies are due 20 per cent of this.

Its difficulty, and that of its creditors, is that with litigation you can never tell what the end result wil be. And that is here at home; another country’s legal system adds an extra dimension to the litigation gamble.

Nevertheless, given the committment it made to creditors, many of them businesses withtheir own challenges, Siac presumably has to take this chance. In 2014, it believed it had a reasonable chance of success.

One thing in its favour is that a number of construction companies from around Europe, including a few others in Ireland, ran into similar difficulties in Poland at the same time. Some are going the legal route and have complained to the EU, which was footing a large part of the bill for the motorways that they were building. Presumably they can’t all be wrong.

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