Court Number 6 in Dublin's Four Courts is likely to be packed tomorrow as developer Liam Carroll discovers whe­ther he has been successful in his attempt to have six of his companies, which together owe more than more than €1.2bn to various banks, put into examinership. The move is likely to be opposed by ACC, the Dutch-owned bank which has launched almost 100 High Court actions since the start of the year and has broken ranks from the other banks to pursue developers.

Carroll, who is understood to have spent most of the past three weeks at the villa he owns in Portugal, submitted an affidavit last Friday week in support of the petition for examinership of what is collectively known as the Zoe group, which will be heard by Mr Justice Peter Kelly.

Carroll's companies intend to trade their way out of their difficulties and an independent report found they could emerge with net assets of €290m if they are allowed to develop and sell properties over three years, including a two-year moratorium on interest loan repayments. ACC, which lent money for Carroll's purchase of land in Dublin, opposes the plan, which is backed by Carroll's other lenders to the six companies, principally AIB and Bank of Scotland (Ireland). Cross-guarantees mean other properties within Carroll's portfolios could also be severely affected by any insolvency action.

The plan for the Zoe group is likely to be aggressively to sell off development sites with planning permission and completed residential developments. Carroll had already been trying to do that, cutting the prices at his Castleforbes Square scheme in Dublin's north docks, for example, by nearly 50% earlier this year.

The six companies that make up what is termed the Zoe group own assets across the property spectrum but the fall in their value has been huge. Residential prices are down by about 50%, investment properties are down by about the same and development land has slumped significantly. For example, Cherrywood was once one of the developer's prime assets: the 400-acre-plus site in south Dublin was once valued at more than €1bn by experts. Last week one senior development land source valued it for the Sunday Tribune at €278m.

The extent of the land price stump has left the banks stumped. When this newspaper published a panel last April showing how quickly land values can drop by up to 80%, one of Carroll's main lenders contacted this newspaper looking for a copy. Last week, senior sources at the NTMA said land values in some locations are down by as much as 90% from the peak of the market.

For the past 10 months, it's been a drip feed of stories about Carroll's difficulties. Last October, the Sunday Tribune reported that Carroll, who could not be named at the time for legal reasons, "is now known to have a huge working capital problem and has to pay his creditors in instalments". Rumours about Carroll's companies were everywhere in property circles and there was more than one row in Dublin pubs last Christmas about whether the group was facing serious financial difficulties.

As this newspaper began to reveal other cracks in his empire, legal actions were issued against his companies, including two winding-up petitions. Creditors were approached and asked to accept 60 cent in the euro on debts while AIB and Bank of Scotland (Ireland) provided additional banking facilities of more than €100m.

Carroll laid off staff last year and, in recent weeks, some staff that been put on temporary lay-off were told that they were being made redundant.

"We had hoped that this would be a temporary measure," the letter from Carroll's Royceton vehicle said. "However at this stage we do not see the business recovering to previous levels in the foreseeable future."

Carroll also poured more than €400m into the stock market in 2007, losing €260m as equities slumped.

He recently told the High Court that his assets now total €259.5m, his bank debt stands at €149m and he receives annual rental income of €9.85m while paying annual interest of €7.9m. Since then, Irish Nationwide has secured a €78m summary judgment against Aifca, a company of which he owns the majority, while the society's application for a €60m summary judgment order against Carroll for a personal guarantee he gave in relation to the company is also due for decision this week.

To complicate matters further, Carroll and Aifca are two of the five defendants in a compensation claim taken by Noel Smyth's Redfern seeking damages of €140m.

Whatever the decision tomorrow, it seems Carroll's financial difficulties are still just beginning.

How Land Is Valued

Three-bed semi sale price: 2007, €400,000; 2009, €250,000; Notes, Conservative 37.5% drop

Net of Vat: 2007, €346,000; 2009, €216,250; Notes, Vat is 13.5%

House build cost: 2007, €140,000; 2009, €120,000; Notes, Bruce Shaw Cost Index

Site development costs: 2007, €6,000; 2009, €6,000; Notes, Bruce Shaw Cost Index

Planning contributions: 2007, €10,000; 2009, €10,000; Notes, Average charge

Professional services: 2007, €5,000; 2009, €3,000; Notes, Expert's estimate

Sale fees: 2007, €6,000; 2009, €3,500; Notes, Legal and agent

Marketing costs: 2007, €1,500; 2009, €1,000; Notes, Ads, show unit

Finance costs: 2007, €6,000; 2009, €3,000; Notes, Estimate

Total costs: 2007, €174,500; 2009, €146,500

Balance for profit & site: 2007, €171,500; 2009, €69,750

Profit: 2007, €56,000; 2009, €46,000

33% 66% of balance

Site Value: 2007, €115,500; 2009, €23,750

There is a relatively easy way of valuing land. You take a plot, work out how many houses could be built on the site, the likely sale price and then work backwards. The panel on the left provides a rough example of how that formula has changed since the market collapsed.

During the boom, developers were willing to reduce their profit-margin percentages because they couldn't see a potential hit. House prices were increasing and they felt that if they didn't reduce their profit margin their competitors would, and they would miss out. The reality, however, is that if prices fell their profit would be wiped out and they'd be underwater. That's exactly what happened – with house prices conservatively estimated to be down 40%, developers are losing money on units.

Additionally, on any land that now comes up for sale, they've had to double their profit margin to guard against further price falls. This has had a knock on effect on the price of land, as the table shows, with prices per plot in the example shown down nearly 80%.