The O'Flynn Construction Group, led by Cork property developer Michael O'Flynn, and US private equity giant Blackstone have reached a "standstill" agreement to adjourn their legal battle until January 30th, 2015.

This is to allow discussions take place after O’Flynn Construction submitted a plan to pay up to €400 million to Blackstone at the end of October. The standstill agreement was reached on Thursday in the commercial court in front of Mr Justice Brian McGovern.

Blackstone is O'Flynn Construction's primary secured creditor after it acquired company debts from the National Asset Management Agency of €1.8 billion. Blackstone paid about €1.1 billion for these loans using a company called Carbon.

In a statement, Blackstone said: “Significant liabilities to Carbon fall due on December 31st, 2014, and the parties have agreed further time so that discussions can continue on OFG’s [O’Flynn Group’s] proposal and other options available in respect of these obligations can be assessed. The parties have therefore agreed a standstill until January 30th, 2015, in respect of such December obligations,” it added.

"The parties have agreed to adjourn the ongoing court proceedings in Ireland, until after the standstill period."

Mr O’Flynn declined to comment when contacted. A spokesman for O’Flynn Construction said: “We have issued an agreed joint statement. We cannot comment further.”

Fully funded purchasers

O’Flynn Construction was due to repay Blackstone €225 million by the end of this year under the terms of its loans. Its directors have told Blackstone the group has secured two fully funded purchasers to acquire assets within the group in the UK and Ireland which would more than meet their year-end obligations. The standstill agreement will give both sides time to negotiate and find a solution rather than begin an arduous and costly legal battle.

Blackstone tried earlier this year unsuccessfully to seize control of the group and remove Mr O’Flynn and his fellow directors from running it.

In his legal action to block Blackstone, Mr O’Flynn accused it of being engaged in a “very elaborate and sophisticated, but ultimately hamfisted, blitzkrieg” to take over his companies.

This is denied by Blackstone, which believes it has acted in a way it is entitled to.

Mr Justice McGovern described Mr O’Flynn and his companies as having a “good, arguable case” in initial hearings about whether he was entitled to take an action against Blackstone, but the dispute has yet to go to full trial.