The High Court reopened part of McInerney’s examinership proceedings to hear further evidence about whether a long-term receivership was likely, given the prospect that Bank of Ireland and Anglo Irish Bank loans could be acquired by the National Asset Management Agency (NAMA).
Mr Justice Clarke had delivered an earlier judgment on 10 January 2011 refusing to confirm the proposed scheme of arrangement. He considered the Banking Syndicate’s case that a receivership lasting 10 or 11 years could generate about €75 million, with a present value of around €50 million or somewhat less. Compared with the €25 million offered under the scheme, he concluded that confirmation would unfairly prejudice the syndicate.
McInerney then asked the court to revisit that conclusion. It relied on recent emails from Bank of Ireland Group Legal Services, including one stating that the transfer of McInerney loans to NAMA was expected “very shortly”. The Banking Syndicate responded that NAMA had deferred its acquisition decision until the High Court case had run its course, and that it had said the loans would not transfer before the examinership ended.
The judge held that there must be “strong reasons” to revisit a reasoned judgment before a formal order is made. New evidence must be credible, potentially important to the result, and ordinarily unavailable earlier despite reasonable diligence. He found the emails provided credible material that could significantly affect the unfair-prejudice assessment. The transfer to NAMA alone would not decide the issue: the central question was whether it would make the proposed receivership less likely, including in light of the position of syndicate member KBC Bank.
The judge found both sides bore responsibility for the NAMA issue not being raised at the original hearing. McInerney knew NAMA was a possibility but assumed it was no longer on the table and did not seek confirmation. The judge also considered that the Banking Syndicate may have viewed acquisition as significantly likely and that omitting any reference to it was objectively apt to mislead, on the evidence then available.
Balancing those matters, the court ordered that the issue be reopened. It did not overturn its earlier refusal to confirm the scheme or reach a final conclusion on the likely outcome. The judge said further evidence, initially by affidavit, should address the likelihood of the long-term receivership model being put in place in light of the possible NAMA acquisition. The court’s assessment would be based on the substance and realistic likelihood of events, not solely on the parties’ formal positions.