A receiver appointed to artificial intelligence company Altada Technology Solutions last year has agreed to sell the business to tech entrepreneur Eoin Goulding, for a figure understood to be in the range of €3 million to €5 million.
At a hearing on Wednesday, the High Court heard that the receiver agreed to the sale to Mr Goulding over a rival bidder on the basis that if a deal was delayed any further, some 30 employees, who have not been paid for five months, could walk away from the business.
The court heard that Altada was a “melting ice cube”, depreciating in value as it awaited the conclusion of legal wrangling over its future.
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However, the tentative deal is subject to further discussions between the parties. This is chiefly due to objections raised by the company’s liquidator and the Revenue Commissioners, a preferential creditor of Altada’s to which it owes more than €2 million, about the validity of the receiver’s appointment.
The parties have agreed to not conclude the sale before 4pm on Thursday afternoon to allow those discussions to take place. The matter is listed again for hearing next Monday morning.
Two main competing bids for the Cork-based company – which was “heavily insolvent”, according to the liquidator, and had begun defaulting on its creditors at least a year before its collapse – had emerged in recent weeks.
Allan Beechinor – who cofounded Altada with his wife Niamh Parker – is likely to remain with the business over the long term
The court heard on Wednesday that Nicholas O’Dwyer, a partner at Grant Thornton, who was appointed as receiver to Altada last November, signed a contract on Tuesday evening with Cometgaze, a company controlled by Mr Goulding, for the business. Mr Goulding is an Dublin-based tech entrepreneur, who founded cybersecurity firm Intergrity360 and serves as its group president.
Details of the offer have not yet been made public. However, The Irish Times understands that Mr Goulding has offered between €3 million and €5 million for Altada, a company that in early 2022 said it expected to achieve a $1 billion (€930 million) valuation last year.
It is also understood that he is likely to shake up Altada’s management team in an effort to reverse its fortunes. Allan Beechinor – who cofounded Altada with his wife Niamh Parker – is likely to remain with the business over the long term.
The other main bidder was Jeffrey Leo, an original investor in Altada, through his company Datech, which is also one of Altada’s creditors. Last December, Datech successfully petitioned the High Court to have a provisional liquidator appointed, John Healy of Kirby Healy Chartered Accountants.
But the court heard that Mr Leo’s bid had been rejected by the receiver because directors and employees of the firm said they would walk out if it was successful.
Mr O’Dwyer was appointed as receiver to Altada in November on foot of an application by three creditors who, just weeks earlier, had lent the company €500,000.
However, the court heard on Wednesday that the liquidator’s preliminary investigation into the company had raised “weighty concerns” about the nature of that transaction and the validity of Mr O’Dwyer’s appointment as receiver.
The receiver was appointed by four creditors – Grattan Boylan, Alan Bruce, Lynn Bruce and Noreen Gallagher – who had provided a loan of €500,000 over a period of eight months, the court heard, with an additional “premium” of €500,000 to be paid on top of the principal. The judge, Mr Justice Brian Cregan, described this arrangement as “most unusual”.
Barristers acting on behalf of liquidator Mr Healy queried the lawfulness of the receiver’s appointment on the basis that, among other things, Altada had failed to acquire the consent of shareholders to proceed with the loan as they were required to do so.
Mr Healy also found evidence that Altada had been defaulting on its creditors for a period of 12 months before his appointment as provisional liquidator. He said the company found itself in financial difficulties shortly after it exited an examinership process in 2019.
In August, Altada announced that it had furloughed a number of staff on ‘temporary’ basis due to ‘unforeseen market conditions’
If the issues raised by the liquidator can be dealt with over the coming days, Mr Goulding’s purchase should close allowing Altada to discharge its debts to secured creditors, including the Revenue Commissioners, which is owed more than €2 million, €1.6 million of which has been classified as preferential debt.
It will also allow Altada to pay roughly 30 staff, many of whom were present in court on Wednesday and have not been paid for five months.
Mr Goulding could not be reached for comment.
Documents read in court revealed that as of December last, Altada owed unsecured creditors in excess of €5.3 million and close to €637,000 in back pay to employees. It had total assets of €3.3 million, €849,261 of which intellectual property.
In August, Altada announced that it had furloughed a number of staff on “temporary” basis due to “unforeseen market conditions”. The company had plans to grow its headcount to 100 before it faced financing issues following delays to a planned funding round earlier this year.
Senior management had expected Altada to achieve a $1 billion valuation in 2022 after it raised $11.5 million in a funding round in September 2021, led by Rocktop Partners along with Elkstone Partners and Enterprise Ireland.
Mr Beechinor and Ms Parker were also shortlisted for this year’s EY Entrepreneur of the Year awards.
