HOPE FOR the survival of Cork-based Fleming construction group rose yesterday when the High Court extended the examinership of Tivway to two of its parent companies – John J Fleming Construction and JJ Fleming Holdings.
The group which has debts of some €1 billion employs about 650 people and comprises 31 companies.
Examiner George Maloney of Baker Tilly Ryan Glennon now has until October 17th to draw up a survival plan for the group.
ACCBank, which is owed €21.5 million, opposed the appointment of an examiner to Tivway at an earlier court hearing and also resisted the extension of the examinership to the parent companies when the application came before Mr Justice Daniel O’Keeffe last week.
The court heard that Anglo Irish Bank was prepared to support a scheme of arrangement to the sum of €266 million, as were AIB (€130 million) and Bank of Scotland (€48 million).
In a judgment yesterday, Mr Justice O’Keeffe granted the application for the extension of the examinerships. The judge said he was satisfied that, if restructured in the way outlined to the court in an independent accountant’s report, the group would be capable of becoming a going concern in the short-term at the very least.
Nobody could predict the future trend with precision but that did not prevent a revamping of the business of construction constituting a going concern, said the judge.
Mr Justice O’Keeffe said examinership was a more preferable course in his opinion than to wind up the companies.
The statements in the examiner and accountants report were not bald assertions but did show an objective rationale, he stated. The judge said he had also taken into account the view of the employees as represented in court to him last week.
In so far as John J Fleming Construction was concerned, he was satisfied the legal tests set out in law had been met and he was prepared to make the order sought by the applicant in that regard.
And as regards JJ Fleming Holdings, he accepted it had a critical role to play in any scheme for survival and, in all the circumstances, he was prepared to exercise his discretion in favour of the applicant.
Counsel for ACC, Rossa Fanning, said that, while he was not seeking a stay at this stage, he would be taking instructions in the matter. Earlier he had argued his clients would be prejudiced by the inclusion of the two companies in the proposed survival scheme.
Mark SanFey SC for the Fleming group told the court that the examiner appointed in July last had attracted the interest of an investor in the company and was confident Tivway and its related companies could be saved through a scheme of arrangement with its creditors.
Due to the relationship between the companies, the court heard the group’s survival was remote unless the survival scheme was extended to include both parent companies.
