ACC Bank is to appeal against a High Court decision approving a 10-year rescue plan for three companies in the Fleming Construction Group, which has debts of some €1 billion including €21.5 million to ACC.
Mr Justice Brian McGovern today granted a stay on his order approving the survival scheme after being told by Paul Sreenan SC, for ACC, the bank will apply to the Supreme Court on Thursday for an early hearing of its appeal. The stay applies pending further order of either the High or Supreme Courts.
Earlier, Mark Sanfey SC, for the group’s examiner George Maloney, said this could mean very severe commercial prejudice because of the uncertainty but he agreed ACC has a right to appeal.
John O’Donnell SC, for Anglo Irish Bank, the Fleming group’s largest creditor owed more than €260 million, said he was not aware of any case where a scheme of arrangement had been successfully appealed against but ACC had a right to “have a go”.
Declan Murphy, for the group, said it was very concerned about delays in implementing the scheme as contracts had been lost because of the uncertainty. His side were very anxious for an early date for the appeal.
When approving the survival scheme last Friday, Mr Justice McGovern said he believed it would turn around the fortunes of the three affected companies — John J Fleming Construction, JJ Fleming Holdings and Tivway — and would preserve 137 jobs.
He said the support pledged by the banks to the companies under the scheme was substantial and the court was satisfied there was a reasonable prospect of survival for the three companies. If the scheme was carried out as intended, the debts owed to the secured creditors, the banks, would be eliminated over the ten year period proposed, he also noted.
The judge dismissed arguments by ACC it was unfairly prejudiced by the scheme.
The Fleming survival scheme provides for a sale of the group’s contracting arm and other assets to a new company, Donban, backed by an unnamed investor, for €3.6 million. It also leaves secured bank creditors with effective control of
Fleming’s property development business, which has a number of connected sites in Sandyford, Co Dublin. The banks will have 10 years to realise their security. The plan also proposes paying unsecured creditors 25 per cent of what they are owed.
ACC had its € 21.5 million debt secured against one of the Sandyford sites and had claimed the proposals left it with a property now worth €1 million and nothing else.
