Temporary protection for developer’s €2bn group

RTÉ reports that the Irish Supreme Court has granted temporary protection against creditors to 6 companies in Liam Carroll’s Zoe Group ahead of a full hearing, next Tuesday, of the appeal against the recent High Court ruling. From the RTÉ report

The companies were seeking the court’s protection after ACC Bank began proceedings to have them wound up because of €136m of unpaid debts. Today, Senior Counsel for Mr Carroll’s companies Michael Cush said the High Court judgment had not attached sufficient weight to the level of pre-planning that went into the application for examinership. He said seven lenders had agreed to provide finance to discharge unsecured creditors and fund ongoing developments. Mr Cush said the banks had agreed to a moratorium on repayment of debt for a number of years. He added that the High Court had ignored the factor that the market could not absorb the amount of property, which would be made available if there was no examinership.

Why should High Court not ignore that particular factor? Because of the implications for Nama? The Irish Times has a detailed report.

Giving the Supreme Court’s decision granting the stay, the Chief Justice said there is a constitutional right of appeal and the normal situation is that a stay is granted where an appeal is brought promptly and there is a stateable appeal.

He was satisfied the companies had arguable grounds of appeal but stressed that was not a reflection on the merits of the appeal. It was also evident, in the circumstances of this case, the appeal itself would be moot were a stay not granted.

Mr Justice Murray also told Mr Cush his legal submissions should address the High Court’s views concerning the adequacy of the report of an independent accountant which grounded the companies claim of having a reasonable prospect of survival.