The Supreme Court has dismissed an appeal by two companies in the McInerney group against the High Court's refusal to approve a rescue plan.
The decision means the court has lifted its protection of McInerney Homes Ltd and McInerney Contracting Ltd.
The directors of the companies said they were deeply disappointed at the decision. The Supreme Court dismissed the appeal by a three to two majority.
In his decision rejecting the appeal, Mr Justice Donal O'Donnell said the McInerney litigation was one further sad illustration of the loss and damage that has been caused by the dramatic expansion and traumatic contraction of the property market in the early years of this century.
In their statement, the directors said they had successfully raised substantial foreign investment in an attempt to restructure the company's balance sheet.
They said they made restructuring proposals to the banks that would have resulted in an investment of €54m in the company and the economy, the safeguarding of over 100 direct and 200 indirect jobs and the payment of €2m to non-secured creditors.
They said it was highly regrettable that the banks were unwilling to reach an accommodation with the investor and that a company such as McInerney should be allowed fail at substantial cost to employees and other non-secured creditors.
They said this represented a direct rebuff of external foreign investment into Ireland at a time when the economy was in clear need of such investment.