ANALYSIS:A liquidator is now to be appointed to some of the group's companies after Zoe's examinership bid was turned down for the third time, writes BARRY O'HALLORAN

ACC BANK will take the first step on the road to winding up parts of developer Liam Carroll’s property empire today when it asks the High Court to appoint a liquidator to Vantive Holdings and a number of related companies in the Zoe group.

The bank will make its petition as Mr Justice Frank Clarke gives his reasons for yesterday’s announcement that he does not intend to appoint an examiner to Zoe, which would give the company High Court protection against its creditors for up 100 days while a rescue plan is put in place.

Justice Clarke spent about an hour yesterday querying a number of figures in the independent accountant’s report which the company presented to support its case.

A few of the observers felt that the judge wanted to give Zoe a chance to play one more hand. If that was the case, the property developer failed to produce the aces it needed to win the day, and instead saw its bid for examinership turned down for the third time.

It may seek to appeal this today, but either way, ACC’s legal team made it clear that they are going ahead with their petition to have a liquidator appointed.

While Justice Clarke will make his formal order and give his reasons today, his remarks yesterday indicated that he did not believe that Zoe has demonstrated that it had a reasonable prospect of survival.

Thus it failed to meet the most important requirement for examinership and High Court protection. The judge honed in on predictions in the report for the first seven months of 2011, when it expects to have total income from commercial and residential rents and dividend income totalling €28.7 million, enough to cover its projected €28.5 million interest bill.

However, the judge disputed these calculations and in particular pointed out that the €15.9 million that Zoe expects in rents represented nine months’ cashflow rather than seven. Overall, he argued, the figures did not add up.

He was bluntly critical of the report, and remarked that it left him struggling to carry out the “objective test” which Chief Justice John Murray ruled in the previous Zoe case is required to qualify for examinership.

When Zoe’s first attempt failed in the Supreme Court last July, Chief Justice Murray said that in order to carry out that objective test, the court must have sufficient evidence or material that will allow it to conclude that a company has a reasonable chance of survival.

In short, anyone seeking to be placed in examinership must have all the relevant facts and figures at the ready if they are to have any chance of succeeding.

On the face of it, it looks like the chief justice’s ruling has set the bar relatively high for any future examinership candidates.

That in itself marks a change from the position under the original 1990 legislation, which meant virtually anyone, deserving or not, could get into examinership and win court protection from their creditors.

That law was amended in 2000, but has not been tested to the extent that it has been in the Zoe case.

If nothing else, the chief justice’s ruling means that the amendment has real teeth, and that, at least, fewer undeserving cases will benefit from examinership in the future.

There is only one other key thing in which the court is interested: the company’s prospect of survival.

Chief Justice Murray’s ruling indicated that without this, other concerns were not enough to meet the law’s demands.

On the basis that he is not going to appoint an examiner to Zoe, it looks like Justice Clarke was not swayed by its lawyers’ argument last Monday that to do so would be in the public interest.

The group’s senior counsel, Bill Shipsey, said its application was predicated on “some hope over despair” for the economy as a whole.

He also pointed to the fact that all its other bankers, State guaranteed AIB and Bank of Ireland among them, supported the application.

But that variation on the “too big to fail” argument does not look like it will be enough to get court protection, at least under examinership legislation.

Depending on what happens in court, it is likely that, following the Dutch-owned ACC’s request, it will have a provisional liquidator appointed to the group later today.

But that will literally be a first step in what promises to be complicated process.

The liquidator will be presented with a series of inter-related companies, registered both here and in Jersey.

The main two are Irish-based Vantive Holdings and Jersey-registered Morston Holdings.

They are involved through subsidiaries in a series of mixed residential and commercial projects mostly in Dublin and many of them on the northside of the city’s docklands around Sherriff Street, East Road and Castleforbes Road.

The group also has shares in ferry operator Irish Continental Group and food company Greencore.

Along with ACC, which is seeking the repayment of €136 million, the group’s creditors include AIB, Bank of Ireland, Ulster Bank and KBC.

All their debts are secured against various properties in Zoe’s portfolio, giving all of them the right to appoint their own receivers.

Dutch-owned ACC has already appointed receivers to four companies within the group, but those appointments were stalled pending the outcome of Zoe’s latest examinership bid.

As others have similar rights, the group could find itself in a situation where there are a number of receivers representing different banks with different secured debts.

When that, or rather those, processes are complete, a liquidator can move in to pick up whatever pieces are left.