THE €25 million being offered by an investor as part of the rescue plan for housebuilders McInerney was well below the potential value of the company’s assets, counsel for three banks objecting to the plan has told the Supreme Court.
Senior counsel Michael Collins, for KBC, Anglo Irish Bank and Bank of Ireland, who are owed €113 million by McInerney, said the banks and other parties agreed the best way to realise and manage the assets was to develop the lands that the company owned.
The banks, the company, and the examiner, who has recommended an investment by US equity fund, Oaktree Capital, as part of the rescue plan, all agreed this was a “very good business opportunity”, Mr Collins said.
In those circumstances the offer of €25 million to meet the banks’ €113 million debt amounted to unfair prejudice, counsel said.
He was opposing McInerney’s appeal against the High Court’s rejection of the rescue plan on grounds one of the creditor banks, Belgium-based KBC, would be unfairly prejudiced by it. The banks oppose examinership and want a receiver appointed to the firm.
The Supreme Court reserved its decision on the appeal yesterday.
The banks have also cross-appealed against the decision of Mr Justice Frank Clarke to allow the High Court case to be re-opened, after he had previously decided all three banks would be prejudiced by the rescue plan.
Mr Justice Clarke revisited his decision after he was told there was a likelihood the National Asset Management Agency (Nama) would take over the loans to McInerney from the two Irish banks.
In his final decision, he ruled, even where a rescue plan was unfairly prejudicial to only one party, it remained unfairly prejudicial.
In submissions yesterday, Mr Collins said the court should ignore that Nama may take over the two Irish banks’ loans because Nama had indicated it would do nothing until the examinership was completed.
The examiner could not stand over his original recommendation that €25 million from Oaktree was the best that could be secured when, once Nama came into the picture, there was a further additional offer of almost €6.6 million to compensate non-Nama bank KBC, Mr Collins said.
That would have been a big write-down. I would assume their is more intrinsic value in the portfolio than the offer. Thoughts?