Supreme Court to rule on McInerney

BUILDING GROUP McInerney has lodged a motion seeking leave to appeal last week’s High Court decision on the future of the company to the Supreme Court.

The Supreme Court will rule on the application next Friday. The court also agreed to extend the protection of the court until then.

The company’s lenders have opposed both the application to appeal and the stay on the expiry of court protection, which was due to expire yesterday.

The banks must state their opposition in writing by next Tuesday.

The decision to seek leave to appeal to the Supreme Court follows last week’s decision by Justice Frank Clarke not to approve a proposed rescue plan for the troubled building group.

McInerney was placed in examinership last September, with debts of €113 million owed to a syndicate of three banks, State-owned Anglo Irish, Bank of Ireland and Belgian lender KBC.

The rescue plan for McInerney’s Irish business involved an offer of €25 million in full settlement of the bank debt from US fund Oaktree Capital, which had been planning to invest in the company.

However, last week the High Court ruled that the proposals were unfairly prejudicial to the interests of KBC, and rejected the rescue plan.

This follows a previous High Court ruling in January that rejected the proposal on the basis it was unfairly prejudicial to the interests of the three banks involved.

However, Mr Justice Frank Clarke agreed to revisit the ruling after it emerged €80 million or so of the total which was due to the two Irish lenders was destined to be transferred to the National Asset Management Agency (Nama).

Last week, after hearing further submissions from the banks, the company and the examiner, the judge ruled that he could not confirm the rescue plan as it was unfairly prejudicial to KBC.

Examinership legislation requires the courts to refuse to confirm a rescue plan put forward by the examiner if it is unfairly prejudicial to any creditor.

The syndicate of three banks have consistently opposed the examinership and the rescue plan.

Next week’s Supreme Court ruling on McInerney’s application for leave to appeal will mark day 190 of the case.

If the Supreme Court rules against the application, the company will almost inevitably enter receivership, with the potential loss of 109 jobs.