The High Court has appointed a provisional liquidator to a steel fabrication firm providing products for blue chip construction sector companies.
Farleng Engineering Ltd, of Laraghcon Farm, Lucan, Co Dublin, is insolvent and does not have enough money to discharge debts to creditors, Mr Justice Brian Cregan was told by Ross Gorman BL, for the firm, which petitioned the court for the appointment. Until recently, it had 42 full time employees.
Counsel said the company had unusually twice been through examinership, the first in 2021 and the second in April last when the Circuit Court appointed an examiner.
This protection was removed in late June after a potential investor withdrew interest and the examiner recommended the appointment of a provisional liquidator, he said. A liquidator can only be appointed by the High Court.
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Among the reasons why the decision was taken was that the company was owed in excess of €230,000 for work in progress and another €446,000 in retentions much of which related to projects that have been completed. The liquidator could commence trying to recover this money.
Counsel also said one of the key reasons was to ensure that the employees can avail of a collective redundancy process which can only commence when the liquidator has been appointed. Until that happens the workers are “in limbo” and cannot obtain social welfare or start a new job.
The firm also has several hundred thousand euro worth of assets, including plant, machinery and tools which are depreciating assets and which need to be sold as soon as possible.
In the petition seeking the appointment of the provisional liquidator, the company, which was incorporated in 1999 and leases its premises in Lucan, said it operates in the construction sector providing specific steel fabrication for data centres and pharmaceutical manufacturing site construction.
The 2021 examinership was successful with reasonable profitability recorded for the last three-and-a-half years.
However, it has suffered significant cash flow issues for reasons including the impact on working capital due to big contract delays. It was also impacted by general delays in customers paying up and variances between what the firm claims and what is assessed by the customers’ quantity surveyors.
A planning issue also arose with Fingal County Council sending a warning letter last March stating the company may be in breach of planning regulations by changing the use of an agricultural building to light industry and the laying of a concrete surface without permission.
The company believes a liquidator can explore the possibility of the acquisition of the business by a number of investors who have expressed interest in it.
Mr Justice Cregan said he was satisfied to appoint Padraic O’Malley of JW Accountants as provisional liquidator. He adjourned the application to the end of the month.
