ANALYSIS:Other banks owed money by Carroll's Zoe group will have to move to protect their interests, writes SIMON CARSWELL

ACCBANK, THE Dutch-owned lender that precipitated the collapse of Liam Carroll’s Zoe development group, upped the ante yesterday by successfully petitioning the High Court to appoint a liquidator to two of his companies.

The move is expected to force the group’s seven other lenders, which between them are owed more than €1 billion, to act to protect their own interests in his various Dublin lands and development properties.

The provisional liquidator was appointed to Carroll’s companies, Vantive Holdings and Jersey-registered Morston Investments, which sit at the apex of about 50 subsidiaries in the group. Both are “grossly insolvent” and unable to pay their debts as they fall due, the High Court heard yesterday.

The statutory duty of the liquidator, Declan Taite of Dublin accountancy firm FGS, will be to sell the assets of the two companies to recover as much money as he can to repay creditors, which are almost exclusively eight banks owed more than €1.2 billion.

ACC’s appointment of a liquidator – rather than a receiver to seize specific companies and properties backing the bank’s €136 million loans – surprised many involved in managing this crisis.

The group’s banks, with the exception of ACC, attended an emergency meeting yesterday to discuss their options, following Carroll’s failure to secure court protection the previous evening.

As they met, the court approved ACC’s winding-up petitions.

The other banks, among them Allied Irish Banks and Bank of Scotland (Ireland), the two biggest lenders to Mr Carroll’s wider property development empire, will have to appoint receivers to protect their own securities which vary across the group (see panel).

A receiver would supersede the authority of the liquidator.

The challenge now facing Carroll is the potential domino effect across his entire business.

There is heavy intermingling of debts across Carroll’s Zoe group and his other two groups, Dunloe and Orthanc. The three owe an estimated €2.8 billion.

While Vantive and Morston have their own problems with respective deficits of €396 million and €361 million on liquidation, they also have colossal exposures on inter-company debts and guarantees across Mr Carroll’s groups.

Zoe group’s survival plan, which was rejected by the courts, shows that companies throughout Carroll’s group owe €569.9 million to Vantive which has in turn guaranteed debts of €224.4 million between his companies.

Morston has provided guarantees on debts of €489.6 million owing by other Carroll companies. The contagion effect of the liquidation of the two Zoe companies is vast. Taite is likely to have to focus on selling properties held by subsidiaries to try to repay the bank debts of the parent firms.

If, after the disposal of these assets, there is still a deficit, he can act on cross-guarantees and inter-company debts, potentially forcing him to liquidate other Carroll companies across his wider business.

However, given the lack of activity in the property market, the Government’s “bad bank”, Nama, may be the only buyer.

Yesterday, the High Court also gave Mr Taite authority to appoint additional directors and the power to retain and dismiss employees.