THE HIGH Court has appointed a liquidator to three insolvent firms in the Fleming building group, which has debts of over €1 billion, following the Supreme Court’s decision to end their court protection.
On the application of ACC Bank, Mr Justice Brian McGovern yesterday appointed Tom Kavanagh, of Kavanagh Fennell, liquidator to John J Fleming Construction (JJFC), JJ Fleming Holdings (JJFH) and Tivway Ltd. ACC, which is owed €22 million by Tivway, previously appointed a receiver over that company.
Seeking the appointment of Mr Kavanagh, Paul Sreenan, for ACC, said it had previously nominated Kieran Wallace of KPMG, but as another person in that firm had been appointed receiver over Tivway, it was inappropriate that Mr Wallace should be liquidator.
There was no issue with the professionalism and experience of Mr Wallace, and Anglo Irish Bank, owed some €260 million, had indicated that it had no objection to Mr Wallace or Mr Kavanagh, counsel said.
Lyndon MacCann, for the Fleming companies, said while they had no issue with the professionalism or independence of either Mr Kavanagh or Mr Wallace, their nominee for liquidator was Jim Hamilton of BDO Simpson Xavier.
ACC was pursuing “its own agenda”, which it was entitled to do, but its wishes were at odds with many of the other creditors and it would be better if Mr Hamilton was liquidator, counsel said.
AIB, another large creditor, had no objection to Mr Hamilton, he added. A solicitor representing some 19 smaller creditors said they supported Mr Hamilton as liquidator, and ACC’s nominee would have “a different agenda”.
Mr Sreenan said any suggestion that Mr Kavanagh may have an agenda because he was a nominee of ACC was “reprehensible”.
Had protection not been granted last year to these companies, ACC would have applied then to have them wound up and it was almost unheard of for a company’s nominee as liquidator to be accepted. Various unsecured creditors were clearly supportive of all that these firms had done, counsel added.
Mr Justice McGovern said that, had the firms not secured court protection last year, ACC would have applied to wind them up and its position had been “vindicated” by its success in the Supreme Court.
None of the proposed nominees would adversely affect the creditors’ interests, he added.
In the circumstances, the judge said he would appoint ACC’s nominee, Mr Kavanagh, as liquidator, with a range of specific powers, including to carry on the business, secure the companies’ assets and retain valuers as necessary.
He returned the matter to the High Court examiners’ list next month.
Yesterday’s hearing arose after the five-judge Supreme Court unanimously refused court protection to the three firms on Thursday after finding proposed survival schemes did not provide a plan with reasonable prospects for their survival as “going concerns”.
The struck-down schemes proposed a sale of the Fleming group’s contracting arm and other assets to a new company, Donban, for €3.6 million, and meant secured bank creditors would have effective control of Fleming’s property development business, including sites in Sandyford, Co Dublin, with the banks having 10 years to realise their security.
The Supreme Court said these schemes were a “holding plan” involving the sale of the profitable “engine” of the group to a new company outside the examinership, leaving behind an impaired property development business which it was hoped would improve in 10 years.
The facts of the case were “bleak” and epitomised “the consequences of the recent property boom and bust” which had left many people in “dismal situations”, Ms Justice Susan Denham said.
