The High Court has wound up Sonica, a commercial interior fit-out contractor, after it failed to secure the fresh investment it needed to survive.
The firm was wound up on Tuesday afternoon by Justice Conor Dignam after Ken Fennell of Deloitte, who had been acting as the firm’s examiner, told the court it was not possible to secure an investor that would allow him to put together a survival scheme to save the company.
Mr Fennell, represented in court by Brian Conroy BL, said the company had become insolvent and unable to pay its debts due to factors including the impact of the Covid-19 pandemic, the rise in inflation and the rise of the cost of materials in the sector.
Counsel said the company had more than 70 employees and had also engaged subcontractors to carry out works on several projects.
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Counsel said that last March the company, which had been successful for some time and enjoyed annual turnovers in the millions, secured the protection of the courts from its creditors and entered examinership.
An independent expert’s report put before the court in March had stated that the company had a reasonable prospect of survival if certain steps were carried out, including the formulation of a scheme of arrangement with its creditors.
To fund that scheme, counsel said, additional investment was required.
Counsel said that although Mr Fennell had invited expressions of interest and had held discussions until late last month with several potential investors, it had not been possible to secure the investment needed to save the company.
Although there had been several expressions of interest from potential investors, ultimately no party was prepared to invest in the company, counsel added.
Counsel said that, given the lack of investment, Mr Fennell had no choice other than to seek to have the court end the examinership process and have the company wound up.
Mr Fennell, counsel added, was prepared to act as the company’s liquidator.
There were no objections to the court making those orders from either Sonica’s creditors or the company itself, counsel said.
Sally O’Neill BL, for Revenue, which is a creditor of the company, said her client was not in a position to oppose nor consent to Mr Fennell becoming the firm’s liquidator.
However, counsel agreed that given the unusual circumstances of this case there was merit to having Mr Fennell appointed as liquidator as he would be able to secure the company’s assets and deal with the firm’s employees and subcontractors.
Mr Justice Dignam said that, based on the evidence before the court, he was satisfied to make an order winding up the company.
“Unfortunately, it had not been possible to secure investment that would have funded a scheme of arrangement,” the judge said.
He added that, that given the circumstances, he was also prepared to appoint Mr Fennell as liquidator. The judge said it was in the best interests of all the relevant parties to do so.
