Heron close to victory in rescue battle with creditors

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The Independent Online
HERON, Gerald Ronson's embattled property and garages group, won an almost complete victory yesterday in its battle for a pounds 1.4bn rescue deal in the teeth of legal opposition from a handful of creditors, writes John Willcock.

The High Court in London rejected an appeal by Bermuda-based property developer Simon Shane and four of his companies against the Heron deal, but Mr Shane will have one last chance next Wednesday in the Netherlands Antilles courts.

If the deal is rejected by the courts then Heron faces liquidation, under which bondholders owed a total of pounds 450m could lose everything.

A spokesman for Heron said last night: 'We are confident the restructuring will go through.'

Developing the rescue took 18 months of negotiations between the company, its City advisers and 82 banks. The deal has been approved by the banks and bondholders in three jurisdictions where Mr Ronson raised his financing - the UK, the Netherlands and the Netherlands Antilles.

The rescue deal, a 'scheme of arrangement,' also requires approval by the courts in each jurisdiction, and Mr Shane, whose companies are owed dollars 42m, appealed to the UK court to block it. He claimed creditors had been given inadequate information and the banks were unfairly favoured.

Heron countered that Mr Shane had a vested interest in endangering the restructuring, since he was in litigation with the company in New York over property joint ventures. Heron was counter-suing Mr Shane.