McInerney seeks High Court review of its decision to refuse rescue plan

HOUSE BUILDER McInerney wants the High Court to review its decision to refuse a rescue plan for the troubled group as its debts may be handed over to State agency Nama shortly.

McInerney’s Irish business owes a syndicate of three banks, Anglo Irish, Bank of Ireland and KBC, €113 million, and is likely to go into receivership after the High Court this week ruled against a rescue proposal that involved paying the lenders €25 million in full settlement of the debt.

The High Court was due to make a number of orders relating to the business yesterday, including appointing a receiver to the company.

Its lawyers yesterday said that they had new information that would justify Mr Justice Frank Clarke revisiting his decision and said that it could not decide whether or not to lodge an appeal until the court has done this.

The banks’ legal team said that this was the fact that some of the loans were about to be transferred to Nama, and argued that this was known all along and said that there was nothing new in the information.

The banks opposed McInerney’s rescue plan, which was backed by US investor, Oaktree Capital. They argued that over an extended, 11-year receivership, they could recoup at least €50 million of the debt by building houses on McInerney’s sites and selling them.

On Monday, Mr Justice Clarke said the banks had made a “credible case” that they could succeed at doing this, and thus the rescue plan, put together by court-appointed examiner, William O’Riordan of Pricewaterhousecoopers, was skewed against them.

If Nama buys the loans from the banks, it would be likely to appoint its own receiver, and would not be tied to their proposal to extend the receivership over 11 years.

Mr Justice Clarke yesterday adjourned the issue to Monday. He said that he has to decide if he has the jurisdiction to revisit the decision and, if so, if he should do so.

As well as offering a full and final settlement of the debt, Oaktree Capital is prepared to provide initial working capital of €5 million.