THE SUPPORT of the main banks for court protection for the Zoe group must be seen against the likelihood that much of the group’s loans will be transferred to Nama, although this is “light years removed” from the purpose of laws allowing for court protection of companies, ACCBank argued.

Rossa Fanning, for ACC, said Zoe was relying on the support of all its banker creditors except ACC in arguing its case for protection, and was trying “to have it both ways” in regard to those banks.

Zoe argued that the National Asset Management Agency (Nama) did not exist as of now and so the court should not address ACC’s concerns about how Nama might treat ACC’s loans to Zoe, but the attitude of the other banks could only be understood by what they expected to occur to the Zoe loans, counsel for ACC said. Any rational person would consider those loans “prime candidates” for transfer to Nama.

While he accepted that submissions about Nama were all speculative, if the best way to secure these companies was to allocate their loans to Nama, that was clearly a reason for the banks to support the application for protection. Such a reason was light years removed from the purpose of the examinership legislation.

Mr Fanning also said counsel for the Zoe companies had made several “rhetorical and pejorative” comments relating to ACC’s motivation for opposing court protection. There was no evidence ACC was opposing examinership for other than “rational and commercial reasons”, and the court was not entitled to examine the motivation of any creditor opposing examinership.

The banks supporting examinership were also presumably doing so for rational and commercial reasons, the judge remarked.

Mr Fanning argued that the Zoe side had provided insufficient explanation for including one particular company, Royceton, in this latest protection application when it was not included in the first petition.

He said Royceton appeared to have a “mezzanine financing” function within the group and appeared to have borrowed some €126 million from Vantine Holdings (the main funding company in the group) and to have loaned that money to another company in the group. There was no indication as to the nature of that borrowing.

While the group also claimed Royceton’s exposure was confined to some €300,000 arising from alleged problems in construction of the Dublin headquarters of Google, counsel said this was just one example of the type of claim Royceton could be exposed to and for which there was no provision.

Mr Fanning said ACC also had concerns it would get just €300,000 a year, just 10 per cent of the interest due to it, with the rest being rolled up. ACC feared an interest rate hike would increase its exposure, and was also concerned that the value of properties against which its loans were charged could fall.