A HIGH Court judge has appointed an examiner to a group of property development and investment companies with liabilities of €11-€18 million, but believed to have a reasonable prospect of survival.

The Tuskar group controls properties through related companies in which it has invested some €50 million and has a "blue chip" asset base, the court heard.

The board and most of the shareholders of Tuskar Asset Management plc, with offices at John's Gate, Wexford, and five related companies, had opposed the application for examinership brought by one director and two members of the companies, who between them have invested €1.4 million.

The application had come like "a bolt from the blue" and had caused considerable damage to the Tuskar group's business and reputation, Lyndon MacCann SC, for the board, said yesterday.

Alan Hynes, in an affidavit on behalf of a majority of the board, said the petition was brought by a minority of members/creditors of the companies; contained several factual inaccuracies; had disrupted negotiations for the rescheduling of debts; and had unnecessarily provoked a crisis.

Mr Hynes denied claims the group's difficulties were primarily due to how it has been managed and added that petitioner John Power had not raised such issues when he attended board meetings.

The majority board had advocated a scheme of arrangement option, rather than examinership. A report prepared for the board by accountant David M Hughes of Ernst Young said that, in addition to development funding, the company would also have to raise up to €5 million to meet financial deadlines and deal with creditors.

Mr Hughes said the only source for funding at the moment was shareholders who had provided guarantees for some €11 million.

The Revenue Commissioners and two banker creditors, who between them have loaned some €28 million to the companies, adopted a neutral position.

Mr Justice Peter Kelly said that the companies are insolvent. There was a dispute about the extent of that insolvency, with the petitioners suggesting liabilities of €18 million and the board €11 million. The petitioners proposed the appointment of Kevin Hughes, of Hughes Blake chartered accountant as examiner. Mr MacCann said his clients would prefer the appointment of David Hughes.

Noting there was no issue of competence, the judge appointed Kevin Hughes.