ISTC examiner petition to be heard

The High Court is today scheduled to hear a petition for the appointment of an examiner to International Securities Trading Corporation (ISTC), the financial firm led by Tiarnan O'Mahoney.

The petition follows the appointment of John McStay as interim examiner to the company at the end of last month.

Since Mr McStay's appointment, at least five parties have contacted ISTC expressing an interest in investing in the firm.

An independent accountant appointed by the company to asses its future viability, David Hughes of Ernst & Young, said last month that ISTC had "a reasonable prospect" of surviving as a going concern.

The company, which raises capital on the markets and then lends this to other financial institutions, ran into difficulties as a result of the global credit crisis.

The High Court has heard that the firm would face estimated debts of €871 million if it were put into liquidation.

Mr Hughes's opinion was that the firm should instead seek the protection of the court and seek to draw up a Scheme of Arrangement that could then be put to creditors.

ITSC, founded by former Anglo Irish Bank executive Mr O'Mahoney in 2005, believes it can survive after dealing with its problems.

The examinership process is designed to give a company court protection while it tries to ensure its viability.

If successful, it usually results in sums owed to third parties being reduced, while the company's intangible assets are protected. It aims to allow directors to remain in control of the company and to obtain new investment.

Court protection is provided to companies in examinership for a period of 70 days, although this can be extended to 100 days in exceptional circumstances.