Interim examiner appointed to O’Flynn Construction

A company of Blackstone investment fund management group which bought €1.8 billion liabilities of the Cork based O’Flynn Construction Group from Nama has secured the appointment of an interim examiner to four key companies in the group.

Demands were also served today on Michael and John O’Flynn, as principal shareholders of the parent company, for immediate repayment of what the High Court was told were their “substantial” personal debts to Nama, which debts had also been sold to Carbon Finance Ltd, an affiliate of the Blackstone group.

If repayment was not made, it was intended to enforce security over assets of the shareholders, including their shares in the parent company, resulting in an event of default on the corporate facilities, it was stated.

In the absence of payment, it was intended to appoint Grant Thornton as receivers today over certain assets of certain other group companies in Ireland, the UK, British Virgin islands and the Isle of Man. It was not intended to appoint receivers over assets of the four companies because it was believed those could survive as a going concern once certain conditions are met.

The four companies are O’Flynn Construction Company, employing 16 people; O’Flynn Construction BTC; O’Flynn Construction (Rochestown) and Eastgate Developments (Cork).   The directors and principal shareholders of the companies have not been “co-operative” with Blackstone and that, combined with lack of information about accounts of the group, led to the bringing of the petition, it was stated.

The petition was brought by Carbon, as creditor of the companies, and moved by its counsel Paul Sreenan SC this afternoon before Mr Justice Brian McGovern.

While Carbon believed the companies were insolvent as of now, it also believed they had a reasonable prospect of survival and envisaged a scheme of arrangement which would involve writing off a significant portion of the companies’ secured debt and further investment of some €16m over five years for purposes including to complete and rent out units within the group’s property portfolio.

Mr Justice McGovern granted court protection to the four companies and appointed Michael McAteer of Grant Thornton as interim examiner. Court protection will continue until the hearing of the petition on August 27th on condition an Interim Accountants Report, to be prepared by Kieran Wallace of KPMG,  is provided by August 7th.

Mr Sreenan said the co-operation of the directors of the O’Flynn companies, who include Michael and John O’Flynn, would be required for preparation of the IAR and his side considered that would be forthcoming only if the court appointed an interim examiner. Source: The Irish Times.