A HIGH Court judge has agreed to reconsider his refusal to approve a rescue plan for two firms in the McInerney building group following new evidence that some of the group’s loans may be transferred to Nama. The matter has been adjourned to next week.
Mr Justice Frank Clarke said yesterday he would review his refusal because information that loans obtained by the group from a banking syndicate are likely to be transferred to Nama was a material fact not previously before the court.
The judge had earlier this month previously refused to confirm the scheme for McInerney Homes Ltd and McInerney Contracting Ltd on grounds it was “unfairly prejudicial” to a syndicate of three banks – Anglo Irish Bank, KBC and Bank of Ireland – owed more than €110 million by McInerney.
In that decision, he found the banks had “a realistic prospect” of doing better under a receiver. The banks had claimed they would be able to generate €50 million over an 11-year period of receivership. Under the proposed scheme of arrangement, they would receive just €25 million through a proposed investment from US private equity group Oaktree.
McInerney sought to have the decision reviewed after it obtained information that certain of its loans were likely to be transferred to Nama. If that transfer proceeded, the banks would not be in a position to execute their plan to appoint a receiver, thus removing the prejudice claimed by them, it argued.
The banks had opposed any reconsideration of the court’s decision, arguing the information about a possible transfer to Nama was not new.
Mr Justice Clarke said yesterday he was satisfied to revisit the matter. While the transfer of loans made to McInerney by Anglo and Bank of Ireland to Nama (KBC bank is not a participant in the Nama scheme) was not itself a material matter, the effect of any transfer on the long-term receivership model proposed by the banks was of considerable importance in deciding whether or not a survival plan was prejudicial to the banks, he said.
The probability the loans would be transferred to Nama was a material fact not before the court when his decision was made, Mr Justice Clarke added.
While Nama had made no decision on transfer of the loans, correspondence revealed it was possible a transfer may soon take place. He wanted additional evidence from both sides in relation to any proposed transfer.
The judge also said both McInerney and the banking syndicate were to blame for not dealing with the prospect of Nama taking over the loans in the original hearing.
Adjourning the case to next week, he hoped the matter could be finalised “as soon as possible.”
