Heron fear of more delay on rescue

THE COURTS will decide this week whether a creditor of Heron, Gerald Ronson's troubled property and garages group, can successfully challenge the company's vital pounds 1.4bn restructuring, writes John Willcock.

Heron had hoped to win the courts' go-ahead for the rescue plan by the end of July after an 18-month struggle to win support from its 82 banks and thousands of bondholders. But now it fears the deal may not be ratified until September.

Two weeks ago a group of five companies led by Simon Shane, a Bermuda-based property developer who is owed dollars 42m by Heron, challenged the deal in court citing a number of 'serious and substantial' objections.

They said Heron had not provided enough information to general creditors and there were problems under US law because the scheme involved the issue of unregistered securities.

Heron countered that Mr Shane had a vested interest in opposing the restructuring since he was locked in litigation with the company in the New York courts.

The accountants and other City advisers that have toiled for 18 months to put together the restructuring, which spans the US, France, Germany, Spain and the UK, are horrified that the whole edifice could be blown up by just one creditor.

All these countries have completely different insolvency systems, so if Heron was forced into liquidation the result would be a disaster, insolvency experts warn. Bondholders owed pounds 350m would lose everything, they claim.