O'Flynn construction fighting for control of businessWednesday 06 August 2014 16.41
The O'Flynn construction group is fighting for control of its business in the High Court.
Developers Michael and John O'Flynn are challenging the imposition of examiners and receivers to some of its companies.
In May, Carbon Finance, an affiliate of Blackstone private equity group, bought from NAMA €1.8bn in loans secured against the Cork-based O'Flynn group.
Last week, it had an examiner and receivers appointed to some of its companies.
Today, before Ms Justice Mary Irvine, the O'Flynn group is challenging those appointments and it is also seeking damages.
It disputes Blackstone's assertion that it is insolvent and maintains it has been making its loan repayments on time.
The High Court heard that Blackstone is trying to get control of the company and its valuable assets and cashflow.
It is trying to do this by triggering a loan default.
Michael Cush SC for the O'Flynn group told the court that Carbon Finance was not being truthful when it said it would work with the group.
He said the relationship with NAMA had worked well and lasted four years, while Carbon had planned an examinership within six weeks.
Mr Cush said they were looking to dismiss the interim examiner appointed last week on several grounds.
One that it had failed to meet statutory obligations to fully disclose information and had not acted in utmost good faith.
Secondly, it had improperly looked for an examiner without first getting an accountants report on the companies.
The O'Flynn group is also seeking damages.
Mr Cush said the O'Flynn group had worked well with NAMA for four years since the bad bank took over its loans in 2010.
He said a facilities agreement in place had worked perfectly but when Carbon had bought its loans in May, it had erroneously interpreted and operated the agreement.
He said Carbon had deliberately triggered cashflow difficulties to lead to enforcement actions.
When that did not work he said, it changed direction and went after personal loans of €16m, which were not in payment difficulty in the hope, the payments would not be met.
He also said Carbon has sought to camouflage its true intentions by wrongful allegations of lack of cooperation, and he said Carbon was guilty of most extraordinary misrepresentation and mischaracterisation.
The case is expected to take two days with a judgment due next Monday.