Irish tycoon given final chance to save sinking empire

Fri Aug 21, 2009 12:39pm EDT

* Final attempt for protection to be heard within seven days

* Case has implications for cost of govt "bad bank"

* Hospitalised Carroll ommitted evidence due to stress

By Padraic Halpin

DUBLIN, Aug 21 (Reuters) - Irish property developer Liam Carroll was given one last chance to save his sinking property empire on Friday when a high court judge allowed a second petition for creditor protection to be heard, 10 days after Ireland's highest court rejected the first.

The famously low-key builder is one of the most high-profile casualties of Ireland's property crash, and the possible wind up of his business could impact the cost of the government's "bad bank" plan. [ID:nLC677153]

After the supreme court last week rejected an appeal to ring-fence Carroll's assets from creditors, lawyers for the beleaguered developer brought new and previously unpresented evidence to the court.

Justice John Cooke said there was a clear imperative to hear the petition. He will name a date for the hearing on Monday, adding it will likely be within the next seven days.

"It remains before the court that hears that petition whether all the defects of the first petition are adequately answered," Cooke told the court.

Counsel for Dutch-owned ACCBank, whose efforts to recover unpaid loans of 136 million euros ($194.7 million) from Carroll forced him to seek court protection, said the petition did not answer those defects.

"If one looks at the fresh evidence, it does not begin to address the concerns of the supreme court," Lyndon McCann said, after describing the circumstances of a second petition as extraordinary and unprecedented.

ACC, a subsidiary of Dutch lender Rabobank [RABN.UL], appointed a provisional liquidator to two of Carroll's companies following the supreme court judgment.

A receiver was appointed to four more companies included in the first rescue plan which was described as "fanciful" when originally dismissed by a lower court. [ID:nLV359086]

Dublin's plans to transfer property loans with a nominal value of 90 billion euros to a state-run "bad bank" starting later this year could be complicated if Carroll loses his case and his assets are sold off at rock-bottom prices.

The government's vow not to force banks to swallow fire-sale prices for their property loans could anger taxpayers if ACC forces Carroll to take a big hit on his assets.

END OF THE ROAD

Carroll's lawyer Michael Cush on Friday presented letters of support from other indebted lenders, fresh detailed property valuations and a new independent accountant's report to seek protection for the six companies plus one other.

Cush also argued that Carroll, who he said has been hospitalised, mistakenly omitted evidence, including full details of a business plan for the companies parent Zoe Group, because he was suffering from stress.

He added that the fresh petition for the highly interdependent companies, which owe 1.2 billion euros to their bankers, would be the last.

"If this petition is dismissed it is the absolute end of the road for these companies," Cush told the court on Thursday.

Should Carroll be granted examinership, through providing a reasonable case for survival, the court will protect assets from creditors for up to 100 days while a survival plan is worked on. (Editing by Carmel Crimmins; Editing by Richard Hubbard)