LIAM CARROLL’S judgment was impaired due to stress when the developer opted not to file crucial information on the future of his Zoe group in his first failed bid for court protection last month, the High Court heard yesterday.
During a second attempt for protection for companies in his beleaguered group, the court was told that a key business plan showing detailed valuation reports on the prospects for the group’s properties would be put into evidence.
The court granted Mr Carroll’s companies an 11-hour reprieve last Friday night to argue for the hearing of another attempt to approve the group’s survival plan, which was rejected by the High Court and Supreme Court.
The failure to include valuation reports was cited by the Supreme Court as a reason why it rejected the group’s assertion that it had a reasonable prospect of survival.
The court must decide that the companies have grounds to reapply for protection and, if successful, they must then make their case for the appointment of an examiner at a full hearing of the application.
A period of examinership would give the companies up to 100 days of breathing space from their debts to devise a long-term rescue plan.
Seven Zoe group companies which are seeking protection said the court had discretion to permit the hearing of another application for protection given that new evidence was being submitted.
Counsel for the companies said that additional evidence, including property valuation reports, letters of support from some banks and a more extensive independent accountant’s report, represented “an exceptionally strong case” for the appointment of an examiner.
Michael Cush SC, representing the companies, said the evidence showed that they had “an overwhelming case” for survival.
John Pope, the group’s finance director, said he had underestimated the stress that Mr Carroll was under when the developer chose not to submit a crucial business plan drafted in December 2008 showing detailed valuations.
Mr Pope said Mr Carroll’s decision-making had been affected at the time. Two doctors’ letters were submitted to the court, one of which showed that the developer attended his GP three days before his companies originally applied for protection on July 17th. The court was told that Mr Carroll, who was in hospital last week, was not in a position to give instructions in this application.
Mr Cush said the new petition was brought by Mr Pope and fellow group director David Torpey with the support of Mr Carroll’s wife, Róisín, a 50 per cent shareholder in Showlay, the ultimate owner of the Zoe group.
Dutch-owned ACCBank, whose threat to liquidate the group over unpaid debts of €136 million prompted Mr Carroll to seek court protection last month, is still seeking to recover its loans.
A provisional liquidator was appointed to two companies last week on an application by ACC, which has also appointed a receiver over another four companies, seizing large development sites in the Dublin docklands.
The new independent accountant’s report, compiled by accountants KPMG, shows that the Zoe group, which owes eight banks more than €1.2 billion, has a reasonable prospect of survival.
The court heard yesterday that Allied Irish Banks (AIB) and Bank of Scotland (Ireland), the two largest lenders to the group, were supporting the latest application.
Belgian-owned KBC Bank Ireland also supported the petition. Ulster Bank and Anglo Irish Bank said they were not opposing it.
Ten suppliers, subcontractors and service providers to the group and its main development company, Danninger, told the court they supported the new petition. Employees of Royceton, one of the companies seeking protection, also back the application.
Mr Cush described ACC as “a formidable foe”. He said Zoe’s three largest lenders were owed almost seven times ACC’s debt. The bank will respond when the case resumes today before Mr Justice John Cooke.