ANGLO IRISH Bank has opposed survival schemes for two companies in Galway businessman John Sweeney’s insolvent Black Shore group. The bank is owed in the region of €50 million by companies of Mr Sweeney.
Sweeney Oil Retail Ltd and Sweeney Oil Service Stations Ltd employ 37 people, including 30 full-time staff, at service stations and associated retail units in Westport, Co Mayo and at Clifden and Moycullen in Co Galway.
The survival schemes were proposed yesterday by James Doherty, for Michael McAteer, the court-appointed examiner to the companies, and supported by the companies and some small creditors. Anglo is the largest creditor, while Bank of Scotland Ireland, which had earlier opposed the scheme, withdrew its opposition.
The hearing will continue today before Mr Justice Brian McGovern.
Mr Doherty said the businesses are part of the fabric of the towns they are in, and the evidence was they had a reasonable prospect of survival if the schemes, which the examiner considered included the best investment offer available, were approved.
“Very serious questions” arose about the true motivation of Anglo in opposing the schemes, as it would receive what the examiner, based on valuations, regarded as the full value of its security, counsel said.
Anglo is owed €3.5 million by one of the companies, and claims the €1.7 million being made available to it under the survival scheme is less than it would secure if it appointed a receiver who would sell the companies. It has taken issue with valuations obtained by the examiner valuing the companies’ business at €1.2 million, and claims the business has a value of up to €2.4 million.
It also claims that even if a receiver were appointed, he would continue to run the business until an acceptable offer was made for it which could involve the retention of existing jobs.
Anglo previously installed a receiver over a number of assets in the Black Shore group after the holding firm failed in a bid for examinership last February.
Lyndon MacCann, for Anglo, expressed concern yesterday that the €1.7 million “investment” in the companies via an interest-free loan was being provided by a company involving Mr Sweeney’s 21-year-old son, who would then manage the business. There was no information as to what experience he had, counsel said.
Bernard Dunleavy, for the companies, said both companies had always traded profitably but were “hamstrung” due to their exposure to other companies in the Black Shore group. Anglo had not challenged evidence they had a reasonable prospect of survival if the proposals put before the court were implemented, he said.
Counsel said it was “disingenuous” for Anglo to indicate it was concerned about maintaining jobs in the communities. The aim of appointing a receiver was to protect the bank’s interest alone.
