House builder McInerney has asked a High Court judge to revisit his refusal to approve a rescue plan for firms in the construction group in light of what the company claims is new information.
The company asked Mr Justice Frank Clarke to revisit his decision, made last Monday, to refuse to confirm the scheme of arrangement for both both McInerney Homes Ltd and McInerney Contracting Ltd. The judge said the scheme was 'unfairly prejudicial' to a syndicate of three creditor banks, Anglo Irish Bank, KBC and Bank of Ireland.
The judge said he was satisfied that the banks had 'a realistic prospect of doing better' if a receiver were appointed to the firms than under the proposed scheme of arrangement.
But the company now claims that new information reveals that the loans it obtained from the banks are soon to be transferred to NAMA. As a result of that transfer, the syndicate will not be in a position to appoint a receiver, thus removing the prejudice.
The banks are opposed to the application to have the matter revisited, and argue that there is nothing new in the information.
The syndicate, owed more than €110m by McInerney, had opposed the survival plan, which was put forward by the examiner to the firms Mr William O'Riordan. If accepted by the court, the scheme would have allowed the companies to come out of examinership and continue to trade.
The syndicate opposed the scheme, arguing that it amounted to a significant write-down of the debt owed to the three banks. The banks said they would do better if a receiver were appointed to the firms. Their proposed receivership would take place over an 11-year period and would yield a net value of €50m.
The information on which the company seeks to have the matter revisited was outlined in a sworn statement from the McInerney Group's finance director Enda Cunningham.
In that affidavit, Mr Cunningham said that the loans which the company obtained from the banking syndicate were most likely to be transferred to NAMA. In that event of that transfer, the syndicate would no longer be able to execute its proposed plan to place the company into receivership.
Mr Cunningham added that the transfer of the loans meant that the factual underpinning of Monday's judgment that the banks would be unfairly prejudiced by the proposed scheme of arrangement had been taken away.
John Hennessy SC for McInerney said that the application to revisit the judgment was based on information that has not been previously before the court. Counsel added that McInerney would not be in a position to indicate if it intended to appeal Monday's judgment to the Supreme Court until the application to revisit had been dealt with.
Rossa Fanning BL for the banks said that it was 'an understatement' to say that the application to revisit had come as a surprise to his clients.
He argued that there was no merit in the application and that the information put forward by McInerney was 'nothing new'.
Lawyers for the examiner said they were taking a neutral stance towards McInerney's application for the judgment to be revisited.
Mr Justice Clarke adjourned the matter to early next week. The judge said that when the matter returned before the court he would firstly have to decide if the court had jurisdiction to hear the application to revisit his judgment and, secondly, if the court should revisit its decision.
