Insolvent artificial intelligence business Altada Technology Solutions lost an average of almost €867,000 per month in the first seven months of last year before eventually collapsing into receivership and then liquidation, the company’s liquidator has alleged.
In a 39-page affidavit filed in the High Court on Tuesday, liquidator John Healy of Kirby Healy Chartered Accountants said the Cork-based company’s deficit to its creditors at the end of last year may “substantially exceed” €10 million.
When the creditor deficit is added to €11.5 million Altada raised in a funding round in September 2021, it means that the overall losses at the insolvent company, which had just over €16,000 in its bank account at the end of July last, could exceed €20 million.
Mr Healy, who was not available for comment this week, also alleged in the court documents that Altada’s directors —husband and wife duo Allan Beechinor and Niamh Parker — “perpetrated a fraud” on the company when a decision was taken to draw down a €500,000 loan in September last year.
His allegation is based on two claims: first, that the company was insolvent at the time the loan was secured by way of debenture against Altada’s assets; and second, that the decision was taken without the knowledge and consent of shareholders and creditors.
Altada was loaned the money by four investors — Grattan Boylan, Lynn Bruce, Alan Bruce and Noreen Gallagher — who subsequently had a receiver appointed to the business on foot of the debenture after Altada failed to meet its obligations under the loan agreement.
In the High Court in January, the Revenue Commissioners — who are owed in excess of €2 million by Altada — questioned the legality of the loan and the appointment of Nicholas O’Dwyer of Grant Thornton as receiver.
The receiver subsequently sold Altada — which had hoped to achieve a $1 billion valuation last year — to a company controlled by Dublin businessman Eoin Goulding for a sum understood to be about €2.5 million.
‘Level of cash burn’
Mr Beechinor could not be reached for comment on Friday.
Separately, Mr Healy said in his affidavit that the company’s “level of cash burn” needs to be borne in mind when looking at “what on the face of it, seems to be a high cash at bank figure” of €4.7 million set out in financial statements at the end of 2021.
After recording “large losses for every single month of 2022 without fail”, Mr Healy said the company’s “cash at bank” figure dwindled to just €16,000 at the end of July 2022, a decline of more than 99 per cent.
Altada recorded consecutive losses for 19 months between April 2021 and October 2022, Mr Healy said, totalling €9.6 million over the period. The High Court subsequently appointed Mr Healy as liquidator to the company in December on foot of a petition by a creditor, Datech, a company controlled by Mr Leo.
Mr Healy also said that it was apparent that the directors of the company considered appointing an examiner from at least August 2022, one month after it ceased paying its employees.
