SIX COMPANIES controlled by one of the State’s largest property developers, Liam Carroll, have sought court protection from bank debts totalling €1.2 billion.
The companies within Mr Carroll’s Zoe Group received the protection of the High Court to halt demands by Dutch-owned lender ACCBank for the repayment of loans totalling €131 million and to block threatened insolvency proceedings.
The protection paves the way for the appointment of an examiner at a hearing on July 27th and stops ACC’s attempts to recover its loans.
If the appointment is successful, it will be the largest examinership case in Irish corporate history. The examiner will have 90 days to report back to the court on whether the company can survive.
The court heard that some of the group’s assets may be moved into the State’s “bad bank”, the National Asset Management Agency (Nama).
However, it is unclear whether Nama will be in operation by the time the examinership period expires.
The court heard Mr Carroll’s companies would face a deficit of €900 million if liquidated. The descent of Mr Carroll’s companies into insolvency represent the single biggest casualty of the financial crisis and the collapse in the property market.
The group had been surviving with the support of its banks, which, with the exception of ACC, had agreed to postpone interest payments and not to seek recovery of loans.
Last month ACC gave the companies 21 days to repay its loans. The demand was due to lapse on Monday, prompting the group to rush for court protection. At a meeting on Thursday afternoon the group’s banks, with the exception of ACC, agreed to back yesterday’s application.
The court agreed to protect Vantive Holdings, which with Mortson Investments, a firm registered in Jersey, are the parent companies of 51 firms that are “loosely and colloquially known as the Zoe Group”, Mr Justice Frank Clarke was told.
Four other companies within the group are also protected by the court against actions by ACC, which provided loans of €62 billion in 2007 and €69 billion in 2008.
ACC, which is owned by Dutch group Rabobank, is the third largest lender to the group, which is separate from Mr Carroll’s other prominent firms, Danninger and Dunloe.
AIB is the largest lender to Zoe; the bank is owed €489 million, or 40.8 per cent of the group’s overall debt. It is followed by Bank of Scotland (Ireland), which is owed €321 million. Bank of Ireland is owed €113 million, Ulster Bank €82 million, Anglo Irish Bank €38 million, KBC Bank Ireland €23 million and EBS building society €8.5 million.
Mr Carroll’s companies outside the Zoe Group are understood to have substantial bank borrowings.
The court was told by Bill Shipsey SC, counsel for the companies, that they would seek to appoint an examiner to devise a scheme of arrangement to ensure the group’s survival.
Mr Shipsey said the companies need “a moratorium” on its debts as ACC was threatening the group with liquidation or receivership. He said the companies sought protection to stop the “attack” by ACCBank.
The companies’ application was to prevent ACC taking such “precipitative” action until an examiner is appointed, Mr Shipsey said.
The publicity-shy Mr Carroll was one of the most prolific developers during the decade-long property boom, specialising in apartment blocks in Dublin city centre.
In a separate action earlier yesterday, Irish Nationwide Building Society secured a €78 million judgment against Aifca, a company controlled by Mr Carroll, over unpaid loans relating to the proposed development of The Square shopping centre in Tallaght.
Mr Carroll could not be reached for comment last night.
