Judge grants ISTC examiner more time to prepare report

The High Court has further extended court protection for International Securities Trading Corporation (ISTC), which lends capital to banks and is insolvent because of events resulting from the crisis in the financial markets.

Mr Justice Peter Kelly yesterday granted an application by ISTC's examiner, John McStay, for further time to prepare his report on the company. The judge directed the report should be produced on February 6th next and also extended the examinership to that date.

The judge said he was satisfied, on the basis of material in an interim report from Mr McStay, that it was appropriate to grant the extension of time sought.

Mr Justice Kelly noted that Mr McStay had confirmed the opinion of an independent accountant that ISTC had a reasonable prospect of survival and also noted that the lending banks supported the examinership.

ISTC, with registered offices at Adelaide Road, Dublin, was founded in May 2005 by Tiernan O'Mahoney, former chief operating officer of Anglo Irish Bank plc, and employs 18 people.

The company's application for examinership last November followed a warning by a German bank creditor that month that it would file a petition to wind up ISTC within three weeks unless its debt of some €176,000 was paid.

In appointing Mr McStay, Mr Justice Kelly noted the alternative to examinership would involve liquidation and a "firesale" of ISTC's assets, resulting in a shortfall of some €871 million. ISTC's creditors were "a veritable who's who of the banking world on an international scale", he said.

ISTC's problems arose following the downgrading of structured investment vehicles (SIVs) and consequent demands for repayment of those SIV assets. Because of market turmoil, SIV repayment demands were made and ISTC was unable to meet those demands.

An independent accountant has prepared a report suggesting that if certain conditions were met, the company or part of it had a reasonable prospect of survival as a going concern.