A liquidator appointed earlier this year to a third-level college catering mainly for foreign students can be replaced by one chosen by the students and other creditors, the High Court ruled.
Eden College, based at Dublin's Burgh Quay, blamed its closure last April on cash flow difficulties following its suspension, pending an investigation, from a register of approved colleges by immigration authorities. More than 200 students were owed thousands in fees they paid for tuition they were due to receive before the closure.
On May 23rd, a liquidator was appointed at a creditors' meeting to the college operating company Eden Further Education Ltd whose directors are Fakir Mohammad Zakir Hossain and and his wife Hasina Akter.
However, the Irish Council for International Students, representing 216 students, objected to the choice of Anthony Fitzpatrick of Fitzpatrick O’Dwyer as liquidator, who was nominated by Mr Hossain.
They claimed Mr Hossain, who chaired the creditors meeting, had incorrectly rejected proofs as to the voting rights of proxies representing the students and the vote was therefore defective.
They said their nominee Declan De Lacy, who was supported by two other creditors, the Revenue Commissioners and Dublin City Council, should have been appointed.
A High Court challenge seeking to have Mr Fitzpatrick replaced was brought by one of the students who said she was owed €1,386 as was a large group of students in a similar position.
It was supported by the Revenue and the city council.
Ms Justice Aileen Donnelly ruled Mr De Lacy should replace Mr Fitzpatrick because Mr Hossain, as chairman of the creditors meeting, had incorrectly rejected the students’ nominee.
The complaint was not against Mr Fitzpatrick who as a professional is bound to be a person of probity and competence, she said. It was against Mr Hossain who did not accept the correct proofs as to the voting rights of the creditors.
The fact that Mr Hossain was himself a creditor to the company, as well as being connected to another major creditor which supplied accommodation and management services to Eden, would not have mattered if he (Hossain) had acted correctly at the meeting, she said.
What he did was to incorrectly reject proofs of voting rights of others so that his nominee could be appointed liquidator, she said.
The judge said the court had discretion, where it decides such proofs were wrongly rejected, to substitute the liquidator who would have been appointed if the votes had been properly counted.
She was told Mr De Lacy was still prepared to act as liquidator and she ordered he replace Mr Fitzpatrick.
Ronnie Hudson BL, for Mr Fitzpatrick, said his client will seek a stay on the decision pending appeal.