DUTCH-OWNED ACCBank is expected to oppose the appointment of an examiner to a company controlled by Cork property developer John Fleming at a hearing in the High Court today as it seeks to recover loans of €21 million.
ACC appointed a receiver, Padraic Monaghan of KPMG, to Tivway on July 8th. However, two days later Tivway sought the protection of the High Court and applied to appoint an examiner.
The court granted the company protection from ACC’s action, and the bank’s receiver agreed to stand aside pending the hearing to appoint an examiner which will be heard by the court today.
Tivway’s only project was an office building that it developed in Sandyford, Co Dublin. Two other companies within the Fleming group are understood to have guaranteed the firm’s borrowings.
ACC’s move to appoint the receiver has the potential to topple Mr Fleming’s overall business as the bank could seek to appoint a liquidator to the other two companies to recoup any shortfall in the recovery of the loans from Tivway.
A spokeswoman for ACC said the bank had no comment to make as the case was before the courts.
Mr Fleming’s spokesman could not be reached for comment.
The bank is expected to argue in court that it is entitled to place Tivway into receivership as it is a special purpose vehicle established to develop a single project.
The case will be the focus of much attention within the property sector, according to industry sources, as it could have repercussions for developer Liam Carroll who last Friday sought court protection to block a threat by ACC to appoint a receiver or liquidator.
The Fleming Group is understood to have substantial borrowings, estimated at several hundred million euro, from a number of banks including Allied Irish Banks (AIB), Bank of Scotland (Ireland) and Anglo Irish Bank.
ACC’s attempt to recover a debt of €21 million, if successful, could have consequences for all of the banks as a result of the guarantees provided to Tivway. The appointment of an examiner will provide Tivway with time to work through its debts and devise a restructuring plan.
AIB has provided loans approaching €300 million to the Fleming Group, the Sunday Times said in a report yesterday.
Tivway will seek to appoint Billy O’Riordan of PricewaterhouseCoopers as the examiner.
