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High Court

Michael O'Flynn succeeds in having examiners removed, will repay €24.9m loans on Friday

The Cork developer’s scramble to retain control of his empire has been concluded.

6/8/2014. Michael O Flynn Court Cases Sasko Lavarov / Photocall Ireland Sasko Lavarov / Photocall Ireland / Photocall Ireland

Updated 19.30

MICHAEL O’FLYNN will repay personal loans to Carbon Finance on Friday after succeeding in a High Court bid to have an interim examiner removed from his group of companies.

Carbon Finance failed to disclose material information to the High Court during its efforts to wrest control of Cork developer Michael O’Flynn’s property empire, the High Court was told today.

O’Flynn this afternoon saw off efforts by the subsidiary of US private equity giant Blackstone to wrest control of his property empire.

The O’Flynn group Group succeeded in having an interim examiner removed, with Michael O’Flynn and other senior executives re-installed in advance of a full court case on the matter on 7 October.

In making her ruling, Justice Mary Irvine said that correspondence furnished to the court by O’Flynn “significantly undermined” the premise for Carbon’s move to appoint an examiner over the O’Flynn group companies.

She said that the picture painted by Carbon of the O’Flynn’s level of co-operation “was not an accurate presentation of the circumstances”.

Justice Irvine added that Carbon had breached its obligation of “utmost good faith” when applying for an examiner to be appointed.

She added:

In the present circumstances the main threat to the survival of the companies comes from the petitioner (Carbon) itself.

In a statement issued after the judgement, Carbon noted the ruling and said that it “continues to believe that all steps taken in the current proceedings were necessary and appropriate in the circumstances”.

It said that it “looks forward” to receiving an immediate repayment of Michael O’Flynn’s personal loans.

Carbon will continue to safeguard its position as a significant creditor of the O’Flynn Group and to do everything to protect the assets of the Group and its creditors.

A statement released on behalf of Flynn said this evening that he was “extremely happy with the decision”:

He was particularly pleased that he and his fellow directors had been vindicated in relation to the performance of their duties as directors and the cooperation they had demonstrated.

“Now that they have been reinstated as the directors, they look forward to resuming the business of the Group. Arrangements have been made to repay the personal loans on Friday, 15 August, 2014,” the statement added.


Blackstone acquired around €1.8 billion of O’Flynn’s loans from the National Asset Management Agency earlier this year for the knock-down price of around €1.1 billion.

5/8/2014. Michael O Flynn Court Cases

O’Flynn had managed to successfully negotiate his time in Nama without having control of his group of companies wrested from him.

However, on June 29 the US giant called in personal loans owed by Michael O’Flynn to the tune of €16.7 million, out of a total of €23 million owed by the developer. At the crux of the Blackstone case is the contention that the O’Flynn group, as it stands, cannot meet its liabilities.

Crucially, the structure of O’Flynn’s loan agreement with Nama entails that default on personal borrowings would immediately extend to his corporate loans.

Default over these loans, which duly followed the calling in of the debt, cleared the way for Blackstone to appoint a receiver over O’Flynn group companies. Challenging the move, O’Flynn characterised Blackstone’s approach as “unexpected and aggressive”.

High Court case

In the High Court over the past two weeks, O’Flynn argued that both his personal debts and the corporate debts are being serviced.

Elysian The Elysian building in Cork, which was built by O'Flynn. It is the tallest building in Ireland. http: / / http: / / / /

Blackstone said that it is “committed” to maintaining the business and supporting jobs in Ireland, promising an investment programme in the company. Through its subsidiary Carbon Capital, Blackstone said O’Flynn and his brother John had failed co-operate or give access to vital financial information.

The O’Flynn’s claimed that the Blackstone move was an improper attempt to take over the companies. Affidavits submitted to the High Court show that O’Flynn submitted a €240 million bid to buy Blackstone out of its involvement in the group’s Irish businesses in June.

Late developments

Last night O’Flynn wrote to Blackstone, claiming that he now had sufficient capital available to “immediately repay” the €16.7 million of loans that were initially demanded of him, which triggered the default, the appointment of examiners, and the subsequent court case.

The Corkman, whose ambitious real estate projects include the Elysian Tower in Cork City, said that he now had access to sufficient capital to service the entirety of his €24.9 million loan portfolio.

In the same statement, O’Flynn lashed out against Carbon Capital, claiming that the company:

Openly admitted in the court proceedings that service of the personal demands was undoubtedly designed to bring about an even of default on the corporate facilities.

He alleged that the private equity giant had failed to disclose all material matters to the court when it sought to have an examiner appointed to his group of companies.

These included, for example, the fact that the companies were up to date in all their payment obligations. had significant cash on hand, had been cooperating with Carbon and supplying it with financial information and that there existed a number of disputes about how the loan facilities were not being operated by Carbon as compared to Nama.

First published 13.10

- Additional reporting by Rónán Duffy

Read: Property developer Michael O’Flynn – I can repay €24.9 million loans “immediately”>

Read: Google and Blackstone to buy four buildings from Nama’s ‘Platinum Portfolio’>

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