Virtual consultancy Clarity Engagement collapses after Revenue opts out of rescue plan

Clarity Engagement Solutions, a Dublin-based business that provides virtual training to global pharmaceutical companies, has collapsed into liquidation after a rescue plan for the struggling business was abandoned.

In October, The Irish Times reported that Clarity Learning Systems, trading as Clarity Engagement and C3H, had appointed Declan Hanly of Crowe Ireland to restructure debts under the Small Companies Administration Process (Scarp) for small and micro companies.

But it is understood that the Revenue Commissioners, one of Clarity’s largest single creditors, opted out of the agreement, effectively putting an end to the proposal. Aiden Murphy, partner at Crowe Ireland, was appointed as liquidator to the insolvent company and a related company, Clarity Learning Systems Holdings, at a meeting of creditors earlier this week.

Mr Murphy declined to comment on his appointment or on the company’s dealings.

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A spokeswoman for Revenue said that, for confidentiality reasons, the authority does not comment on the tax affairs of any individual or company.

However, she said tax debt is classed as “excludable debt” under the Scarp regime and, as a secured creditor, Revenue may opt out of an arrangement on several grounds, such as where the eligible company “has failed at any time to comply with a requirement relating to tax imposed”. This would include a situation where the company has an outstanding tax return or poor tax compliance history outside of the debt warehouse scheme.

Revenue can also opt out in a situation where a tax audit is ongoing or where the company is party to an appeal in relation to a tax requirement.

“Revenue is fully engaged in the Scarp,” the spokeswoman said. “We deal with each individual case on its own merits and have included Revenue debt in the majority of rescue plans to date.”

Clarity Engagement has not yet filed accounts for 2020 or 2021, with filing deadlines having been extended during the Covid-19 pandemic.

At the end of 2019, the company employed five people and had total liabilities of more than €935,000, some €346,000 of which was owed to lenders. It is understood that at the time the liquidator was appointed, the company owed roughly €2 million to creditors, about €400,000 of which was tax debt.

Clarity’s founder and chairman, US businessman Christopher Deren, could not be reached for comment.

Clarity Engagement’s sister company, Clarity CX1, completed a €1.6 million funding round earlier this year, led by Furthr Venture Capital, then known as DBIC Ventures. Clarity CX1, a spin-out from Clarity Engagement, develops customer relations management systems built on Salesforce’s lightning platform, targeting large multinationals in the pharmaceutical, manufacturing and financial services sectors.

Introduced last year to supplement the examinership process, Scarp is designed to give small companies that are struggling financially and are either unable or unlikely to pay their debts some protection from their creditors while they restructure. To apply for protection under Scarp, companies must have no more than 50 employees and annual turnover not exceeding €12 million, with a balance sheet of no more than €6 million.