Developer Michael O'Flynn said he was "vindicated" yesterday when he won back control of his €1.1 billion

O'Flynn Group by removing an interim examiner and receivers appointed to key parts of his empire by US investment group Blackstone.

However, the Cork businessman faces further tough challenges, including having to pay Blackstone €235 million by the end of this year. Mr O’Flynn is confident he can do so by selling assets within his group.

He also plans to try to buy back other properties within his business if he cannot reach agreement on an overall strategy with Carbon Finance, the Blackstone subsidiary that took over his companies' debts in May.

The debts were previously controlled by the National Asset Management Agency, with the O'Flynn case casting new light on the high stakes at play in the relationship between developers, the agency and international investment groups.

Determined

Carbon remains determined to take control of the O’Flynn Group as a whole because it believes it is “manifestly balance sheet insolvent”, a position disputed by the Cork developer.

The investment giant paid Nama €1.1 billion for loans of €1.8 billion owed by Mr O’Flynn’s business, representing a discount of €700 million. This put Blackstone in a position of significant power in relation to the group, in that it meant Carbon could take control in the event of it being unable to service its debts.

Carbon moved against Mr O’Flynn and his companies on July 29th when it called in his personal loans and took control of the boards of key firms in his business.

In yesterday's High Court ruling, Ms Justice Mary Irvine said Carbon was wrong to do this as it had not fully disclosed all relevant information when it sought to appoint an examiner to Mr O'Flynn's empire. She also found that it had not acted with utmost good faith.

Ms Irvine concluded that Mr O’Flynn was given inadequate time of a few hours to repay personal loans of €16.7 million, which later led to the appointment of receivers.

She said taken together, this invalidated those appointments and she granted an order which reinstated Mr O’Flynn, his brother John and other directors to the boards of companies within the group from where they had been ousted. A further hearing is due on October 7th.

Refinancing

Mr O’Flynn has in recent weeks been approached by international investors who are prepared to back him in refinancing parts of his property empire out of Blackstone’s control.

Mr O’Flynn is also prepared to sell off key overseas assets of the O’Flynn Group in order to meet the crunch €235 million payment which is due to Blackstone on December 31st this year as part of his loan agreements. Blackstone is expected to try to block this if it believes it is not in its best interests.

Outside the High Court yesterday, Mr O’Flynn said he was “extremely disappointed” to have gone to court.

“I didn’t want to be put into this position ever. I just want to go back to doing my business,” he said. “It is one step at a time,” he said, when asked what will happen next. “We have been servicing all our loans,” he said.

“We didn’t expect the attack on us. It came out of the blue. We have defended it. The court has upheld our situation. Obviously it is back to business and that includes doing business with our main lender [Carbon], of course it does.”

Carbon said in a statement it “continues to believe that all steps taken in the current proceedings were necessary and appropriate”.