Court told O'Flynns 'misunderstand' their role

Thursday 07 August 2014 20.23
Michael O'Flynn said the O'Flynn Group made an offer of €240m for the entire Irish side of the business
Michael O'Flynn said the O'Flynn Group made an offer of €240m for the entire Irish side of the business

The High Court will rule next week on whether the O'Flynn Group should be removed from the examinership process.

An interim examiner was appointed to four companies of the Cork-based group last week on foot of an application by Carbon Finance, a subsidiary of the US private equity firm Blackstone.

Michael and John O'Flynn are fighting to regain control of the companies.

Over the past three days, both sides have been arguing over whether or not an interim examiner should have been appointed.

Carbon Finance said examinership is in the best interests of the company and staff, but the O'Flynn brothers disagree.

Eoin McCullough SC, acting for Carbon Finance, said the O'Flynn Group is balance sheet insolvent and in the very near future will be cash flow insolvent with only €5m in cash available to it.

He said Michael and John O'Flynn have a "fundamental misunderstanding" about their role in the running of the group.

Mr McCullough said Carbon is owed €1.8bn making it the group's biggest creditor and said therefore the O'Flynns should be acting solely in the interest of Carbon Finance and other creditors and not themselves.

But the O'Flynn Group says it has €40m in cash available, claiming it is cash flow solvent.

Its barrister, Michael Cush SC, said the company has been balance sheet insolvent for a considerable time but the core of the company is fundamentally sound and its cash flow is keeping the company going.

He accused Carbon Finance of not disclosing all the relevant financial information during last week's examinership application and wants to have that ruling overturned.

In an affidavit, Michael O'Flynn said he made an offer of €240m for the entire Irish side of the business, including personal borrowings, after learning Blackstone had no real interest in the Irish assets.

Carbon Finance told the court today that that offer was not accepted because the Irish business is valued at just under €1bn and the personal loans amount to almost €25m.

Ms Justice Mary Irvine said she hopes to give her ruling on Wednesday morning.