A High Court application by Liam Carroll’s Zoe property development group seeking the consideration of new evidence ahead of the appointment of an examiner has been adjourned until tomorrow.
Seven companies in Liam Carroll's beleaguered Zoe property development group earlier argued the new evidence presented to the court represented "an overwhelming case" for survival.
The case was adjourned until 10.30am tomorrow when the companies will make final submissions and ACC Bank will argue against the application.
Today, the group's counsel Michael Cush SC said additional evidence showing property valuations, letters of support from four banks and a more extensive independent accountant's report presented "an exceptionally strong case" for the appointment of an examiner.
Mr Justice John Cooke was hearing evidence in a fresh petition for the appointment of an examiner from the six original companies that unsuccessfully sought protection in the High Court and Supreme Court and a seventh company, Royceton, which is also controlled by Mr Carroll.
Lawyers for the Carroll companies said they had failed to present the group's December 2008 business plan, including future property values, in the first application for court protection last month because Mr Carroll refused to submit it, against the advice of his lawyers and fellow directors.
Finance director of the group John Pope said in an affidavit that he under-estimated the level of stress Mr Carroll was under at the time and that his decision-making was impaired.
The court was told this afternoon that Mr Carroll's health was a concern and he was not in a position to give instructions in the present application.
The judge was also handed in documents which showed that Mr Carroll attended his GP on July 14th, three days before six of his companies sought protection from the High Court, though the doctor's diagnosis was not disclosed in court.
Mr Carroll's wife Roisin, a 50 per cent shareholder in the ultimate holding company behind the group, supported the application for protection and said she was concerned about her husband's health over the last couple of weeks, according to an affidavit filed by her solicitor.
Earlier, the court heard Allied Irish Banks (AIB) and Bank of Scotland (Ireland), the two largest lenders to the Zoe Group, were supporting the new application for protection.
KBC Bank Ireland said they were also supporting the application, while Ulster Bank and Anglo Irish Bank said that they had no objections.
Dutch-owned ACCBank whose liquidation threats over unpaid loans of €136 million precipitated the group's application for protection last month is opposing the application.
A number of subcontractors to the Zoe Group and one of its development companies, Danninger, were represented in court and expressed support for the companies' application for protection.
They included Stone Developments, Stoneville, Joseph Flynn Site Excavations, Traynor O'Toole architects, PJ Edwards & Co and James Twomey architects. A legal representative of employees of Royceton said they also support the application.
Mr Cush SC said property valuers to the group estimated at December 2008 that with an orderly development of existing sites and sale of assets its investment properties were worth €408 million, development sites €750 million and freehold property €52 million.
He said the valuers estimated investment properties had fallen by between 10 per cent and 15 per cent this year, while development land was down 15 to 25 per cent.
The group's independent accountant, David Wilkinson of KPMG, which worked on the group's December 2008 business plan, took into account the more pessimistic side of the valuations and estimated the group would have a net worth of €10 million with assets of €1.36 billion and liabilities of €1.35 billion.
Mr Cush said that KPMG had taken "a very conservative view" at a high level of advice from estate agents CBRE on commercial properties and Hooke & MacDonald for residential properties.
He said that the group had sold 53 units at prices predicted in 2008 or greater, generating €11 million in sales. A reduction in interest rates this year had brought savings of €23.4 million.
Some 641 residential properties had been leased out yielding an additional €10.4 million, some €3 million more than estimated in the three-year business plan drafted in December 2008.
Rental income was generating €38.5 million meeting 68 per cent of the interest costs that fall due to the group's lenders, Mr Cush told the court.
The group planned to sell 375 residential units over the remaining 30-month life of the December 2008 business plan, or 150 units a year. Some 51 units had been sold for social and affordable housing. A further eight residential properties could have been sold this year, the court heard, but are being rented out instead.
Mr Cush said that the group's planned sale of its shareholding in ferry group ICG had not materialised as the proposed vendor could not complete the purchase, but the shares were generating dividends for the group.
He said that there had been no development on the group's three planned office blocks at North Wall Quay in the Dublin docklands, including the proposed new headquarters of Anglo Irish Bank. He said Anglo Irish was willing to provide €8 million to fund development pending a planning ruling by An Bord Pleanala.
Mr Wilkinson's report found the companies had a reasonable prospect of survival if a scheme of arrangement were put in place and there was a moratorium on capital loan payments to the banks.
The court heard Mr Wilkinson concluded that there may be a possible write-down of €10 million on the group's debts based on a "more conservative" side of the valuations.
The survival plan was also contingent on the continued support from group lenders. Mr Cush said the National Asset Management Agency (Nama) may have a positive impact on the level of credit being made available.
Mr Cush told the court the group's valuers concluded there would be "highly significant adverse consequences" for the property market generally if the Zoe Group was liquidated and its assets put up for sale.
Mr Justice Cooke said it seemed to him that it was in the interests of the economy for him to consider whether the fresh application should be accepted by the court for hearing, given the rejection of the previous application for protection by the High Court and Supreme Court.
