Developer’s €2b Zoe Group tries again for court protection

With liquidators appointed to two holding companies and having had their attempt to secure court protection from ACC Bank’s pursuit of a €136million debt rejected by the Irish Supreme Court, 6 7 companies in the Liam Carroll controlled Zoe Group, which owe €1.2 billion, are bidding again for court protection.. From the Irish Times report

Mr Cush told Mr Justice de Valera that the companies were providing two pieces of evidence in support of the application. This included letters of support from lenders to the Zoe development group with the exception of ACC. AIB, Bank of Scotland (Ireland), KBC Bank Ireland and Bank of Ireland were supportive of the application. State-owned Anglo Irish Bank also had no objection and would advance companies €8 million for the development at North Wall in Dublin, the court heard. The court was told that Bank of Scotland (Ireland) had advanced €50million to the companies since December 2008 when the companies presented a survival plan. Ulster Bank were neutral on whether it supported the application.

As economist Karl Whelan said

Why would the banks do this? Why would they extend further money to a clearly failing developer with a fanciful survival plan? The only possible answer is these banks were determined to maintain the illusion Carroll would one day pay back the money he owed. And the reason for this illusionist act? Nama.

And, apparently, there’s more evidence of the future value of the properties involved..

The second item of new evidence was detailed valuation reports from estate agents CBRE and Hooke & MacDonald on the future prospects for the properties.

[Michael Cush SC for the companies] said the companies had submitted “a considerably enhanced body of evidence” including a new independent accountant’s report drafted by KPMG that was “more extensive” than a previous one and a report from the chief economist of Goodbody Stockbrokers, which shows a turnaround in the world economy in 2010 and in Ireland in 2011, and that this would back up the group’s proposed survival plan.

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  • Dave

    I just hope Justice de Valera is not foolish enough to expose the state to a 1.2 billion risk by accepting the legitimacy of reports commissioned by the petitioner at face value. If he wishes to do so then he should seek a guarantee from the supporting banks that this developer’s debts will not be offloaded by the banks to NAMA, thereby depriving them of a strong financial incentive to mislead the Court as to the worth of the assets and the viability of the business as a going concern. If he is not entitled to seek such a guarantee, then he should commission independent reports.