It's been death by a thousand cuts for Liam Carroll's empire as the bursting of the property bubble and his disastrous forays into the stockmarket brought him to seek an examinership last Friday.

Carroll is the largest developer operating in Ireland. He has been laying off staff, asking creditors for discounts on his debts and seeking additional funding from his banks since late last year and now has had to apply for examinership for part of his property empire. The High Court heard on Friday that six of his companies have borrowings of more than €1bn.

The decision to see examinership came after ACC broke ranks from five other banks owed money by the Dundalk-born developer and said it wanted the companies wound up. ACC's decision came after the Commercial Court ordered Aifca, which is majority owned by Carroll and is involved in a dispute in relation to The Square shopping centre in Tallaght (see page 4), to repay €78.6m of unpaid debt to Irish Nationwide building society.

The Sunday Tribune had been aware since Thursday that the bank was planning to lodge a petition to have six of Carroll's companies wound up because it was owed more than €100m by Carroll's Vantive Holdings. In total, Carroll's six companies owe ACC €130m. The move was somewhat unexpected, and shocked senior property sources, as the earlier expectation was that the banks wouldn't allow anything to interfere with Nama. However, ACC is outside the government bank guarantee because it is owned by Netherlands-based Rabobank and it has been particularly aggressive with some of its customers since the start of the year, lodging at least 98 High Court cases so far in 2009, according to court documents seen by this newspaper. It is the third-largest lender to the group of Carroll companies which intend to apply for examinership. AIB is the largest and is owed more than €400m. The others are Bank of Scotland Ireland, Bank of Ireland, Ulster Bank and state-owned Anglo Irish Bank.

The six Carroll companies form part of what was Zoe Developments, renowned for developing tiny apartments in Dublin city centre, and comprise Vantive Holdings, Peytor Developments, Carragh Enterprises, Parlez International and a related Jersey holding company called Morton Investments.

All five of Carroll's Irish companies which are to go into examinership had had health warnings (called 'emphasis of matter') inserted in their accounts by their auditors in terms of their ability to continue as going concerns.

The auditors stated that "the directors had reviewed financial projections and considered the availability of financial support and on the basis of this review, believe that appropriate funding will be made available to the company as a going concern". One set of accounts was signed off as recently as February, showing that in the intervening five months the situation had deteriorated further.

Despite the fact that some of the companies are unlimited, it's not clear if Carroll will be personally liable for the debts. Legal advisers have told developers that if the company structure of an unlimited liability company uses a non-EU limited liability company, such as a Jersey-based company like Carroll's Morton Investments, then they as shareholders can be shielded from any debts that arise. The ultimate owner of the companies is an Irish company called Showlay.

Retailers and developers have used this structure for some time but so far it has not been challenged and it carries an inherent risk that a court might find the structure was not properly capitalised or did not function as an independent entity, wiping out the barrier for which the structure was set up. There is no suggestion Carroll's company operated in this manner.

Carroll was once the biggest developer in Ireland. However, he built a huge amount of buildings without tenants in place and drove rival developers demented by often settling for rents up to 50% below the market norm in order to secure tenants for the empty buildings once they were completed. In order to be allowed go into examinership, the company has to have a reasonable chance of survival. Once examinership is approved, the companies have the protection of the courts from creditors for 70 days, but this can be extended to 100 days. Examiners usually propose a scheme of arrangement with creditors but this can be rejected by the courts, as happened last week with housebuilding firm Laragan Developments, which will now have a liquidator appointed.