The High Court has appointed an interim examiner to the award-winning construction company Mac Interiors.
The court heard that the company, which specialises in the construction of office interiors, and has blue-chip clients including Microsoft, AIB, Ryanair, Pinterest, Barclays Bank and Citibank, had sought the protection of the courts from its creditors due to difficulties largely caused by the impact of the Covid-19 outbreak.
While its difficulties have adversely hit the company’s cash flow, leaving it insolvent, the court was told the firm could be saved if certain steps were taken including the appointment of an examiner who would seek to put together a scheme of arrangement with the firm’s creditors.
Following a late evening application before the High Court on Tuesday Mr Justice Conor Dignam appointed insolvency practitioner and chartered accountant Kieran Wallace of Interpath Advisory as interim examiner to Mac Interiors Ltd, which has 41 full-time employees and many subcontractors.
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The court was told the company was registered in Northern Ireland, but it was seeking the appointment of an examiner in this jurisdiction on the grounds that the firm’s centre of main interest was in the Republic, where its employees were based.
The appointment of Mr Wallace was sought by the company.
Barrister Kelley Smith SC, appearing with Mr John Lavelle Bl for the company, said the company was founded in 2002 and had traded very successfully in Ireland, the UK and continental Europe for many years.
Counsel said following the Covid-19 outbreak, the construction sector had been particularly badly hit. The firm has several ongoing projects but has a projected deficit of about €9 million.
Counsel said the company’s difficulties stemmed from the construction sector having to shut down due to the Covid-19 outbreak.
The company had also been involved in a project in the UK, known as the Liverpool project, that has resulted in it sustaining significant losses.
It had advanced £14 million (€16.2 million) in loans to another related company in order to pay subcontractors involved in that job, which were not likely to be recoverable, counsel said.
The company’s profitability had also been hit by inflation, especially the rising cost of construction materials. It had also been limited in the contracts it could seek due to “bonding” or insurance issues.
Counsel said the company had warehoused €11 million of revenue debt. However, it has other outstanding claims against it including a demand by Revenue for a VAT payment of €200,000.
Revenue had in recent days brought High Court proceedings against the company in respect of that sum, counsel said. Counsel added that other creditors had also been making demands on the company for payment and may seek to have the firm wound up.
The company had taken steps to address its financial problems, including reducing its overheads, and staff numbers from 85 to 41 full-time employees, and had sought additional investment in the business.
An independent expert’s report had said that if an examiner could put together a survival scheme, supported by the creditors and approved by the High Court, the company had a reasonable prospect of survival as a going concern.
Counsel said the appointment of an examiner to deal with the company’s creditors, employees, subcontractors and, in particular, its suppliers, was the best way forward for all concerned.
The judge, after appointing Mr Wallace on an interim basis and granting him certain powers in respect of the company, adjourned the matter to a date in June. The judge also directed that several creditors of the company, including Revenue, should be put on notice of the proceedings.
