The High Court has made orders winding up a Co Clare-based pharmaceutical company employing more than 110 people.
Avara Shannon Pharmaceutical Services Ltd is hopelessly insolvent, loss-making to the tune of €9.5 million a year and unable to pay its workers, the court was told.
The company is part of the Avara Pharma Group, which manufactures chemicals, active ingredients in medicines, for the pharmaceutical industry.
At the High Court on Thursday, Ms Justice Leonie Reynolds said she was satisfied to appointed KPMG's Shane McCarthy and London-based insolvency practitioner Edwin Kirker as joint provisional liquidators to the company, which operates a 2,000sq m facility in Shannon Industrial Estate in Co Clare.
The application to have the firm wound up was brought by the company itself.
Rossa Fanning SC, with Ross Gorman, for Avara, said the situation was “bleak”, but there remained some hope a buyer could be found.
Sold for €1
Since the business was acquired for €1 in 2016 from UCB Manufacturing Ltd, Avara had hoped it would be able to generate new business but that had not materialised, counsel said.
At the time of the sale, the company and UCB entered into a supply agreement where Avara would make Ritogotine, used to treat Parkinson’s disease, for UCB at a reduced price.
UCB also contributed to Avara’s overheads for two years in the hope the company would be profitable after the two-year period expired.
Avara broke even between 2016 and 2018, but since then had been loss-making, counsel said.
The Avara group had been supporting the company financially, to the tune of €16 million, but could no longer afford to do this, he said. It sought a buyer but that had not been possible.
Active ingredients
The company had considered liquidation in April but decided against that option in order to convert €3 million worth of active ingredients into finished goods that otherwise would have been worthless.
Counsel said that decision meant the company did trade profitably between April and the end of June but the overall picture was poor, and the firm was hopelessly insolvent.
The company did not have the funds to pay money sought by the employees whose representatives had informed Avara they expected their rights under the Transfer of Undertakings (Protection of Employment) Regulations 2006 – being 6½ weeks’ pay totalling some €16 million – to be honoured.
The issue had been before the Workplace Relations Commission and the Labour Court. The company says it cannot pay the level of redundancy being sought which, Avara says, was agreed by the previous owner UCB, counsel outlined.
As a result of not being able to reach an agreement, all 115 employees had earlier this month voted for strike action, he said.
The judge has returned the matter to later this month.
