The High Court has confirmed a modified rescue plan for Mainline Power Limited, finding that the plan offered creditors a better prospect than liquidation and would preserve 51 jobs. Mr Justice Rory Mulcahy delivered the judgment on 11 October 2024.
The scheme provides for Mainline Power’s parent, Mainline Utilities Group Ltd, to invest a further €3.5 million. Certain debts will be reduced, Revenue will be paid in full, and unsecured creditors are due 4% of their claims. The Bank of Ireland is due €383,816 in settlement of a secured claim exceeding €1.1 million and will release its security. The plan also provides for an independent non-executive director to be appointed through amendments to the company’s constitution.
VTG Entrepenad AB was the only party opposing confirmation. It argued that a creditor with a retention-of-title claim was not impaired, that the secured bank claim was not impaired, and that meetings of some creditor classes lacked the required quorum. VTG also said the scheme was unfairly prejudicial and creditors would do better in liquidation because a liquidator might recover funds transferred within the company group. VTG did not file legal submissions or address the court at the confirmation hearing. Revenue made submissions but did not oppose the plan.
The dispute over the transfers concerned €5 million paid by Nordex Sverige AB to Mainline Sweden in settlement of a separate dispute. Mainline Sweden transferred €4.7 million to Mainline Utilities; the transactions were treated as discharging debt between group companies. VTG alleged the transfers were improper because the company was insolvent. An arbitral tribunal had separately found Mainline Power and Mainline Sweden jointly and severally liable to VTG for €6.8 million. The High Court had recognised and enforced that award against Mainline Power, entering judgment for approximately €6 million.
An examiner’s investigation concluded that the directors believed Mainline Power was solvent when the transfers occurred and that the evidence did not indicate an intention to put funds beyond creditors’ reach. The examiner considered that a liquidator would not succeed in reversing the transfers under the statutory provisions examined. Mr Justice Mulcahy said the investigation was as thorough as circumstances allowed, while acknowledging it could not rule out that misconduct might later be established or the transactions reversed. He found no evidential basis to assume that liquidation would yield more for creditors.
The judge held that the creditor voting requirements were met and rejected VTG’s objections to the classification of the retention-of-title and bank claims. He dispensed with quorum requirements for the retention-of-title and floating-charge class meetings, where all creditors in each class had attended and voted in favour. He confirmed the proposals as modified and the constitutional amendments. They were to take effect on 14 October 2024 at 11am. The examiner’s costs were made costs in the examinership.