O'Flynn Construction managing director Michael O'Flynn offered to buy Blackstone out of its involvement in the group's Irish assets for €240 million after the US group signalled that it had no interest in that element of the business.
Blackstone acquired the O'Flynn Group's €1.8 billion debts from Nama in May and claims the property and construction business cannot meet its liabilities, giving the US investor the right to take over its assets, spread across Ireland, Britain, Germany and Spain.
Documents opened in the High Court battle for control of the business show that the intermediary, Jim McCaffrey of real estate financiers Eastdil, told Mr O'Flynn in June that Blackstone had no interest in the Irish assets and would consider an offer for them.
Mr O’Flynn and his fellow directors, including his brother John, subsequently offered €240 million for the entire Irish business, including their personal loans, which are one of the flashpoints in the legal row.
The deal would have cleared the Irish assets of liabilities and left the bidders with clear ownership of them. Mr McCaffrey passed on the offer but Blackstone rejected it.
The High Court last week appointed Michael McAteer of Grant Thornton as interim examiner to four O'Flynn companies following an application from Blackstone subsidiary Carbon Finance, which had placed other parts of the group, including its parent, in receivership, on foot of the personal loans.
The group is asking the High Court to overturn those appointments and claims that Carbon took those steps simply to gain control of the group’s assets and that it has intended doing so since Blackstone bought the Nama loans.
Michael Cush SC said yesterday that the group had told Carbon Finance on July 24th that it had €40 million available to meet its liabilities, a fact the creditor did not dispute in its response the next day.
Just €5 million in cash
In its petition last week, Carbon told the High Court that the O’Flynn Group had just €5 million in cash, €34 million less than what was required. “But we have been saying that there is €40 million available, as per the letter never disputed,” Mr Cush said.
Eoin McCullough SC opened Carbon’s counter-argument yesterday by pointing out that the O’Flynn Group had a €1.67 billion deficit on its balance sheet and that there was no argument about the gross insolvency of these companies. At the same time, it was not in a position to meet a €235 million loan repayment due on December 31st.
He also told the court that O’Flynn Group had previously failed to pay €6 million and €1.2 million to Nama by their due dates. Nama gave the group a waiver for this, which Mr Cush had said earlier.
