The Commercial Court has begun hearing an application by a New York based investment company and the parent company of mobile phone operator 3 Ireland, which could affect plans by Eircom's examiner to finalise a survival scheme for the company.
DW Investment Management LP - who represent more than 50% of creditors of Eircom holding Floating Rate Notes, and Hutchinson Whampoa, parent company of 3 Ireland have taken the proceedings following the decision of the examiner, Michael McAteer to reject a €2 billion offer for Eircom by 3 Ireland and Hutchinson.
Senior Counsel, Michael Cush said consideration should be given to the Hutchinson bid.
He said senior creditors had effectively vetoed Hutchinson's proposal and the examinership process could not permit an effective veto from one class of creditors.
Mr Cush said that from the very outset, the examiner decided to finalise a scheme in a shorter time frame than that allowed under the legislation.
He said this had the inevitable consequence of curtailing his ability to consider alternative proposals.
He said under the proposal being considered by the examiner, Eircom would be owned and operated by banks and financial institutions.
Under Hutchinson's proposal the new owners would be a telecommunications company.
Mr Cush said there was an extraordinarily compressed timeframe which meant things weren't being looked at properly.
He said the examiner had invented this deadline.
He said the examiner had not pointed to anything specific to Eircom which made this highly expedited timeframe necessary.
A meeting of Eircom's creditors is scheduled to take place on Friday.
The examiner's proposed survival scheme was to be put to creditors on Friday and brought before the court, probably next week.
This would have meant the examinership would have been completed within 60 days, rather than up to 100 days as allowed by legislation.
The application to force the examiner to consider the Hutchinson bid will continue tomorrow.
It is being opposed by the examiner and by Eircom.
It is likely that Mr Justice Peter Kelly will have to rule tomorrow on whether the creditors' meeting can go ahead or not.
