EIRCOM CREDITORS will meet today to approve a survival plan for the telecoms group after the High Court yesterday rejected what was described by the companies and their examiner as an attempt to “derail” the examinership process.
Hutchison Whampoa Ltd, parent company of mobile phone operator 3 Ireland, had applied to the court to defer the meetings after alleging its indicative offer for Eircom had not been properly considered by examiner Michael McAteer.
The application was also by New York-based DW Investment Management LP, which claimed to represent more than 50 per cent of creditors holding Eircom €350 million floating rate notes. That claim was disputed by the companies, the examiner and senior creditors, who alleged DW was joined to the case in an effort to give Hutchison the necessary legal standing.
The joint application came after the examiner last week rejected the revised €2 billion cash offer for Eircom from 3 Ireland and Hutchison Whampoa and said no further offers would be considered. He is recommending restructuring proposals and a five-year business plan – the senior offer – supported by senior creditors and the companies.
Mr McAteer, examiner to Eircom Ltd, Meteor Mobile Communications Ltd and Irish Telecommunications Investments Ltd, will recommend those proposals at creditors’ meetings today. If, as expected, creditors approve the plan today, it will then have to secure High Court approval.
Mr Justice Peter Kelly yesterday refused an application for orders deferring the creditors’ meetings and requiring the examiner to withdraw his refusal to admit Hutchison to phase two of the process providing for due diligence and the making of final binding offers.
He also refused to make orders for disclosure of information on the companies to Hutchison.
The judge, noting this was the largest examinership in the history of the State, affecting almost 6,000 workers, said the orders sought were “unprecedented” and would effectively involve the court in exercising a commercial judgment and micro-managing an examinership which the court was not permitted, and did not have the expertise, to do. The court’s role in examinerships was supervisory; it could only interfere if an examiner misbehaved or breached the law and it could not intervene in the examiner’s exercise of commercial judgment.
Mr Justice Peter Kelly was satisfied the applicants fell “far short” of showing the examiner had done something so utterly unnecessary or absurd that no reasonable man would have done the same, he added.
