Heron deal under fire on two fronts: Opponents of reconstruction plan 'could force company into liquidation'

THE PROPOSED pounds 1.4bn reconstruction of Gerald Ronson's embattled Heron group came under attack from American and Swiss interests yesterday in a development that City sources warned could put the company into liquidation.

First Eastern Developments, a US creditor of the Heron International property to petrol pumps group, placed an advertisement in yesterday's Financial Times calling on other creditors opposed to the reconstruction to contact the London solicitors Richards Butler for 'an exchange of views leading to possible co-operation'.

The Americans said they were 'considering opposing the scheme in all jurisdictions'.

It also emerged that Credit Suisse, lead manager of Sfr600m ( pounds 272m) of Heron's bonds, wrote to bondholders after the restructuring plans were unveiled in April and failed to recommend the plan.

A spokesman for Credit Suisse said: 'The Swiss are not very enthusiastic about the plan because none of Heron's advisers is prepared to state publicly that the plan may or can or will work.'

A source close to Heron responded that rejecting the deal could be disastrous, adding: 'If these people scupper the deal they will force Heron into liquidation. And if they do that they will lose a hell of a lot of money.'

More than 12,000 bondholders representing total debts of pounds 450m are at present voting on Heron's reconstruction scheme as outlined in a 220-page schedule sent out in April.

All votes have to be in by Monday, but the final result will not be clear until three creditors' meetings have been held at the end of the month in London, the Netherlands and the Dutch Antilles. Heron's 83 banks have already approved the deal.

First Eastern's advertisement said: 'We are creditors of HINV and consider that HINV's restructuring proposals adversely affect our interests as creditors and may accord Heron's banks an inappropriate preference.

'Our review of the documents on display suggests that important information is omitted from the scheme documents as they affect creditors. We are considering opposing the scheme in all jurisdictions.'

The advertisement ended with First Eastern urging other disaffected creditors to get in touch. Heron issued a statement in response denying that there was any omission of information and saying there was no question of the banks receiving an 'inappropriate preference'.

The Heron statement said: 'It would appear that the advertisement has been placed on the specific instruction of one of the parties with whom Heron is presently in litigation.'

The dispute is in connection with an alleged breach of an agreement with Stratagem, a division of First Eastern, for the development of a project in New York.

Heron has consistently denied the substantive allegations and made counter-claims against Stratagem. The litigation is continuing.

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