The High Court has appointed a provisional liquidator, with limited powers, to a company involved in the building of high-end dwellings.
Receivers have already been appointed to Victoria Homes Ltd, whose founder Paddy Byrne has been subject of previous but expired restrictions on being a company director.
Now, Aidan Garcia has been appointed to act as provisional liquidator to the firm.
It follows an application by one of its creditors, AF Construction Ltd, which says Victoria owes it some €447,000 and it fears that whatever remaining assets not controlled by the receivers may be dissipated by Mr Byrne.
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On Friday, Mr Justice Sanfey said he was satisfied to appoint Mr Garcia on the basis that his powers would be limited to those assets not already under the control of the receivers. He said he did not want to see a liquidator “cutting across” the work of the duly appointed receivers.
The receivers were appointed by two lenders owed some €8 million by Victoria and they took control of a number of under construction developments, including an apartment site in Dundrum, Dublin, where recently there was a serious confrontation between security sent in by the receivers and others acting for Victoria.
The court heard AF Construction, which is a specialist carpentry contractor providing timber roofing and other carpentry services for developers, had become concerned that its debt would not be paid in light of a pattern of behaviour by Mr Byrne.
Solicitor Graham Kenny, on behalf of AF Construction which petitioned for the liquidator’s appointment, said his client was approached by Mr Byrne to do some work on a development where Victoria had run into difficulties.
The work was carried out but AF was then told the money for the work would come from proceeds from a further developments which needed completion.
AF agreed to do the work but further difficulties in obtaining payment meant requests for further work so payment could be made, Mr Kenny said.
By the time the debt to AF had built up the €447,000, it was discovered that it would be impossible that the debt could be paid because all profits Victoria was making would first go to one of its lenders Lotus Decalia DAC, Mr Kenny said. AF Construction say there was misrepresentation made by Victoria, he said.
Mr Kenny said there had also been five unsatisfied judgments against Victoria, cumulatively amounting to some €77,000, along with a judgment mortgage registered against it.
Extraordinarily, he said, it had not filed company accounts in four years. Revenue, the court heard, is a creditor of the company for some €500,000.
Mr Kenny also referred to various newspaper reports including about Mr Byrne’s disqualification from acting as a company director for ten years in the UK. It followed Mr Byrne’s declaration as bankrupt after he and another man left some €200 million in unpaid debts.
Mr Byrne was also restricted from acting as a director here for five years, a term which expired in 2018.
Mr Kenny said his clients were concerned that, given his history, Mr Byrne would try to put assets that might be available to creditors beyond their reach.
If the court was to appoint a provisional liquidator with limited powers, including to demand a statement of affairs from Mr Byrne, that would suffice for the time being, he said.
The judge was satisfied to appoint the provisional liquidator on this basis.
The judge said this was an ex parte (where only one-side is represented) application but on the basis of evidence presented Victoria was a company in which there has been “questionable conduct to say the least”
AF Construction seemed to have been induced into doing work so that it could get payment for other work and got “swallowed into the vortex”, he said.
Although AF was paid a lot of money, it is still owed €447,000, he said. There are also still judgments against Victoria, half a million owed to Revenue and a complete failure to file returns over four years, he said.
It also seemed there was a risk of dissipation of assets, he said. He adjourned the matter for two weeks.
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