McInerney appeals go to Supreme Court

THE SUPREME Court will hear appeals from both sides in the dispute over the future of housebuilder McInerney.

The company and three banks involved in a failed examinership process have been given the go-ahead to appeal a High Court ruling that would have effectively spelled the end for the construction group.

The Supreme Court yesterday agreed to hear appeals from both the company and three banks to which it owes €113 million.

The court extended an order giving the group protection from its creditors until both cases are heard.

Two weeks ago in the High Court yesterday, Mr Justice Frank Clarke refused to approve a proposed rescue plan for the group, which has been in examinership since September.

The proposal included an offer of €25 million in full settlement of the €113 million debt owed to a syndicate of three banks, State-owned Anglo Irish, Bank of Ireland and Belgian lender KBC.

The judge ruled that the proposal was unfairly prejudicial to the interests of KBC.

While the company is appealing this and other aspects of the ruling, the banks have launched a cross-appeal of their own.

They say that the High Court was wrong to have revisited its original ruling in the case, which was made, but not confirmed, in early January.

Mr Justice Clarke agreed to revisit certain aspects of the case when it emerged that Anglo’s and Bank of Ireland’s share of the debt, which is around €80 million, was destined for the National Asset Management Agency (Nama).

All three of the banks had originally argued that the rescue plan was prejudicial to their interests, as they would fare better under an extended, 11-year receivership.

However, this argument would not have applied to the two Irish banks had Nama bought the McInerney debt from them.

Both parties have agreed to exchange all relevant documents by the end of March. They will ask the Chief Justice on Thursday to hear the appeal as early as possible.

US private equity fund Oaktree Capital had been planning to invest in the group, and was to provide the €25 million cash settlement to the banks, as well as €2 million for unsecured creditors and working capital.