Two creditors that claim they are owed €2.3 million by a plastics recycling firm have asked the High Court for orders winding up the company.
The application has been made in respect of Cloughwater Plastics Ireland Limited, which is a joint venture between the Netherlands-based Van Werven Group and Cloughwater Enterprises Limited, which is situated in Northern Ireland.
The two creditors, which are part of Van Werven, have concerns about the operation of the company, which they say is insolvent and no longer able to pay its debts as they fall due.
The firm has 35 employees and was set up for recycling used mixed rigid plastics into raw materials for reuse in the plastics industry.
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Under the joint venture, it is claimed Shane Woods, a director of Cloughwater Enterprises, from Ballymena, Co Antrim, was the managing director of Cloughwater Plastics and took all of the decisions about the management of the company.
Arising out of the company’s alleged insolvency and due to concerns over how the firm is being run, two entities within the Van Werven Group have petitioned the High Court for orders to wind up Cloughwater Plastics.
The two creditors seeking the orders are Kunststof Recycling Van Werven BV, a related company that says it is owned over €1.86 million by the Irish company, and Van Werven Plastic Recycling Holding BV which is a shareholder in Cloughwater Plastics and is owed €477,000.
Represented by Lyndon MacCann SC, the Dutch entities say they have lost confidence in their Northern Irish partner to run Cloughwater Plastics and it is in the best interests that he remain in the stewardship of the company. The company has been insolvent for some time, it is claimed.
Mr MacCann said his clients believe it is in the company’s interests that the appointment of joint provisional liquidators be made as soon as possible.
There are concerns over the manner in which the company has been run and over alleged discrepancies in the company’s books, counsel said. In addition, counsel said it appeared the company no longer has a licence to transfer and export end products out of Ireland.
The court also heard that the company has significant dealings with Repak, the Irish body that helps businesses with recycling. The company allegedly overcharged Repak and owes it more than €562,000, counsel said, adding that that figure could increase by an additional €600,000.
Repak has also informed the company it has lost all confidence in Mr Woods and will not conduct any further business with Cloughwater Plastics as long as he remains with the company, counsel said.
The company has now reached maximum capacity permitted in its environmental permit, and it also requires additional investment to upgrade its facilities, otherwise it risks losing its insurance cover, the court also heard.
The creditors want insolvency experts Ken Fennell and Andrew O’Leary, of Interpath Ireland, appointed as joint provisional liquidators to the company to help secure and manage the firm’s affairs and assets in the best interests of all the relevant parties. They could also undertake an investigation into the company’s affairs, the court further heard.
The creditors’ application came before Mr Justice Brian O’Moore on Wednesday.
The judge, who said he was not prepared to grant the orders sought on an ex parte basis (only the two creditors were represented in court), directed that the application be made on notice to the company and other interested parties including Repak and the Revenue Commissioners.
Noting the seriousness of the claims, the judge adjourned the case to Friday’s sitting of the court.
