The Supreme Court ruled today that developer Liam Carroll’s heavily insolvent Zoe property group is not entitled to proceed any further with its bid for court protection from creditors.
The court found the group’s second case for protection was an abuse of court process.
The ruling means the group cannot go ahead with its appeal against a second High Court refusal to appoint an examiner to key Zoe companies. Mr Justice Frank Clarke found last month the group had failed to show it has a reasonable prospect of survival and he refused protection in those circumstances.
Today, the three judge Supreme Court granted ACC Bank’s appeal against a decision by Mr Justice John Cooke to allow Zoe bring that second application for protection, the first having been refused by both the High and Supreme Courts.
The Chief Justice, Mr Justice John Murray, said the group had relied on material evidence in its second petition which it had consciously and deliberately chosen not to put before the courts in the first petition despite that evidence being available to, or obtainable by it, on the first occasion.
While there was no bad faith by the group, the bringing of the second petition in such circumstances was an abuse of the process of the courts and it should proceed no further, he said.
The Chief Justice said the court will give its full reasoned judgment for its decision on October 14th next when the group’s separate appeal against winding up orders for some Zoe companies will also be mentioned. The issue of costs of the protection proceedings will also be addressed on the same date.
Last month, Mr Justice Frank Clarke said the prospects for survival of the group after a two year moratorium on interest rates expires in 2011 were “significantly improbable”, “at the further ends of optimism” and dependent on the “virtual impossibility” of a benign climate concerning interest rates, property values and letting capabilities.
In considering the group’s prospects, he stressed he was concerned with its specific circumstances and not the general exposure of banks to property loans. However, he noted it was likely much of the group’s liabilities would ultimately be to Nama (if enacted) and Nama’s overall interests would be “not dissimilar from a commercial bank”.
The application for protection was by Vantive Holdings and Morsten Investments (the key funding companies in the Zoe group); Villeer Developments; Peytor Developments; Carragh Enterprises Ltd; Parlez International Ltd and Royceton.
