Liam Carroll Denied Examiner

canicemcavoy

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Huge implications for NAMA here, surely, especially after Judge Kelly's scathing summing up?

http://www.rte.ie/business/2009/0731/carroll.html

Mr Justice Kelly said he had the gravest reservations about the projections put forward by the companies in their application, which he said were devoid of reality. He said that even if he had been satisfied that the conditions for the test had been met, he would be disinclined to extend the court's protection to the companies, as he believed there was an artificial exercise under way to assist shareholders whose investments had been unsuccessful.

Justice Kelly said it had long been said that when a business that owes a small amount of money to a bank gets into difficulty, the business surely has a problem. But when the amount of money is large, it is the bank that has a problem, and this was the situation in this case. He said the amounts of money involved were enormous, with the total projected shortfall if the six companies were liquidated standing at over €1 billion.

He said that having lent extensive sums of money to a Byzantine corporate structure, the banks involved were showing great forbearance in relation to getting that money back - forbearance which was generally absent when they were dealing with smaller sums elsewhere.

And given the collapse in the property market, he said, one would be forgiven for being sceptical about the banks' attitude to the plans. But, he added, the truth is probably that they can do little else but show forbearance, because if they move on the companies, it will bring about the collapse of a house of cards.

As a result, he said, the banks had stood back and taken no steps at all, and more than that, some had even lent further money to the companies and were willing to lend more.

He said the companies' had proposed plans to turn around their financial fortunes by enhancing the value of their sites, selling much of their residential stock and selling development sites with planning permission that aren't key to their intentions. But he said these plans contained much management speak.

He said the independent accountant's report filed as part of the application was written by an accountant who acted as auditor to the companies. He said the report was written in four days, contained a number of errors in its original form and used trading projections which had been supplied by management and not independently verified.


He said it contained valuations which were already seven months out of date, which were supplied by CBRE and Hooke and McDonald - two valuers which had previously worked for the companies concerned.

He said if one were to accept the projections, it would involve a remarkable turnaround over three years. The companies would have to move from being insolvent to having a net surplus of €300 million over that period.

He added that given market conditions and little or no prospect of then improving in the foreseeable future, this degree of optimism borders or even trespasses on the fanciful He claimed that the market is grossly oversubscribed and not moving at all, and pointed out that since the business plan was written in December 2008, the companies have sold only 39 units.

Mr Justice Kelly also said the proposed scheme of arrangement was unusual in that it didn't see the companies requiring any additional investment or writing down their debts, as the banks are the only creditors.

He said the number of jobs directly threatened by not granting court protection was 100, and not 650 as claimed in the application. The judge said he was satisfied the companies are all related, and that Jersey based Morston Investments does fall within the remit of the court.

But he said the structure of the wider Zoe Group of which the companies are part was so complex that the companies had mixed up the number of businesses in the group in their submission. He also commented on the large number of directorships held by the directors of the companies, with Mr Carroll holding over 200.
 
Re: Liam O'Carroll Denied Examiner

Cannot understand how an independent auditors report can be written by someone associated with the companies. Why was it accepted?
 
Re: Liam O'Carroll Denied Examiner

Cannot understand how an independent auditors report can be written by someone associated with the companies. Why was it accepted?

Just to be clear. The independent accountants (not auditors) report was produced by Casey McGrath who are the companies' auditors.

The judge did not accept it and was highly critical of it.

The advantage of using a company's auditors is that they know the business can can produce a report much more quickly than a firm who do not know the company. This would be especially true in the case of Zoe, whose structure was described as "byzantine".

The downside, as in this case, is that the judge was suspicious of it.

Brendan
 
Re: Liam O'Carroll Denied Examiner

I am still confused. If the relative Act demanded an independent Report then why was it not provided. I appreciate theCompanies Accountants could produce the data faster but the requirement seems to me that it should be done by someone independent. I must be missing something!
 
Re: Liam O'Carroll Denied Examiner

In this market it would be very difficult to obtain an independent report given the size of the Zoe Group and Carroll's interests. the personalities involved and the fact that by having a report drafted on the group could be a non earner as the likelihood would be it would have to be a freebie.
 
Re: Liam O'Carroll Denied Examiner

It doesn't matter if the company can't afford to get an independent report - the regular firm of auditors should not have prepared it and should now be reprimanded by their relevant association. They cannot be considered independent and should have refused the assignment.
How can we sell oursleves as a properly regulated country when this is going on, even after all that has happened.

It defies belief.
 
Re: Liam O'Carroll Denied Examiner

Moreover the legal profession, who are well versed with the laws and procedures, had the cheek to present it to a Judge of The High Court when they smelt a rat, instead of refusing to act or represent on their behalf.

Now this defies belief.
 
Re: Liam O'Carroll Denied Examiner

well the good news is the judge didn't fall for it, and was prepared to say that the emperor has no clothes.
 
Re: Liam O'Carroll Denied Examiner

I find it amazing that apparently O'Carroll did not show up in court. And recently Sean Dunne didn't show up for his own court case as he had the flu and instead his wife went. How can you not show up for something so important?
 
Re: Liam O'Carroll Denied Examiner

Good article in todays irish times regarding the fees being charged for Examinerships. Nothing changes.
 
Re: Liam O'Carroll Denied Examiner

I find it amazing that apparently O'Carroll did not show up in court. And recently Sean Dunne didn't show up for his own court case as he had the flu and instead his wife went. How can you not show up for something so important?

These are probably done on affidavit and argued by the barristers.

There is not usually a need for direct personal evidence.

Brendan
 
Re: Liam O'Carroll Denied Examiner

My meaning was not the fact that they didn't need to show up, but that something as serious as this in one's business affairs surely merits one's attendance. It smacks of cowardice to me but maybe I've got it all wrong.
 
Re: Liam O'Carroll Denied Examiner

If it was I, I would go to see how my barristers perform.

But I have attended cases where the person most affected did not attend.

Brendan
 
Re: Liam O'Carroll Denied Examiner

Liam O'Carroll back in court today.
Interesting quote in an article in the Indo.
http://www.independent.ie/business/...nal-bid-to-salvage-ailing-empire-1864691.html

"This morning, Judge Eamon de Valera will consider an application to present a new examiner petition which would give the developer 100 days to come up with a survival plan -- and allow his empire to limp into the so-called 'bad bank' NAMA"

The High Court and Supreme Court don't believe his recovery plan is viable but it is ok for the taxpayer to take his property portfollio on.
 
Re: Liam O'Carroll Denied Examiner

This appears to be the updated position [my bold]:

http://www.rte.ie/business/2009/0820/carroll.html

"Mr Cush explained to the court that the reason why the December 2008 business plan and the valuations contained in it were not given to the court during the first application was because Liam Carroll had taken the decision not to include them.
Mr Cush said the information was available when the application was being made, and the advice from the companies legal advisors and other directors was that it should be submitted to the court.
But Mr Carroll as leading shareholder and controller of the group had decided otherwise he said. And an affidavit submitted by fellow director, John Pope, and reports from Mr Carroll's doctors, suggest that at the time that he made the decision, Mr Carroll was operating under stress and his decision making was impaired, Mr Cush claimed.
Mr Cush confirmed to Justice Cooke that it was not the case that Mr Carroll had since withdrawn the insistence to exclude the business plan and valuations, but rather that the application was now proceeding on the basis of a resolution passed by the other two directors of the companies, Mr Pope and Mr Twomey.
The court also heard that, as the other shareholder of the companies, Mr Carroll's wife Roisin supports the petition."

This scenario does not bode well for one of Irelands "greats" in the building game.
Remember Carroll is no fool - he took on Noel Smyth in the battle for Dunloe and won.
It makes you wonder in what way the less capable players may have erred and how they will survive.

ONQ.
 
Re: Liam O'Carroll Denied Examiner

Corruption at its best - even the supreme courts decisions overturned by the elite.This will give them enough time for nama to take over the loans. what a laugh.
 
Re: Liam O'Carroll Denied Examiner

Corruption at its best - even the supreme courts decisions overturned by the elite.This will give them enough time for nama to take over the loans. what a laugh.

Schoolchildren across the land will be in awe of the biggest "pulling a sickie" of them all.
 
Re: Liam O'Carroll Denied Examiner

C'on, we are all human.
Even Sean Dunne has swine flu!
Very drafty place that high court.
 
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