High Court appoints liquidators to forestry firm amid fraud allegations

The High Court has appointed joint liquidators to an Irish registered forestry investment company that is alleged to have defrauded investors of millions of euro.

In her judgment on Wednesday Ms Justice Siobhán Stack appointed chartered accountants Jim Luby and Enda Lowry of McStay Luby as joint liquidators to GWD Forestry Ltd, which is alleged to have taken in some €30 million from investors for plantations based in Canada and Brazil.

The judge made the ruling after two groups of creditors had applied to have different liquidators appointed to the firm.

Those who invested in the firm want the company investigated to see what happened to their investments and whether any of their money can be recovered and repaid.

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Mr Franco Bertellino from Rivoli in Italy, supported by 20 other creditors, sought to have Mr Declan de Lacey of PKF O’Connor Leddy Holmes appointed as provisional liquidator to the company, with a registered address at Northumberland Road, Dublin 4.

However other creditors, represented in the proceedings by Sally O’Neill, opposed that application and sought to have the petition dismissed.

They sought to have Mr Luby and Mr Lowry appointed as joint liquidators to the company, by way of a voluntary creditors meeting, on grounds including that it would be more cost effective.

However, in the alternative, Ms O’Neill clients, accepting that having a court order in place would aid whoever was appointed as liquidator in the recovery of funds, sought to have their nominees’ appointed liquidators to the firm by the court.

In her judgment Ms Justice Stack, who noted that Ms Glynn’s clients claimed they were owed some €8.3 million, compared with the petitioning creditors claim that they were owed €1.4 million.

The judge said she was not satisfied that the petitioning creditors had made out a case that would allow the court to appoint their nominee.

It was also noted by the court that creditors who had opposed Mr Bertellino’s application had moved first in time to have the firm wound up.

They had taken steps to have the company, which had been struck off, restored to the register of companies, which would allow them to put in a liquidator to investigate the company’s affairs.

Those creditors had then attempted to have the company wound up at a creditors meeting.

That move was put on hold after the other creditors launched their High Court action seeking to have their nominee appointed as liquidator.

During the hearing of the application lawyers for both sets of creditors accepted the company had been the subject of a fraud and that all of the parties nominated to act as liquidators were of the highest professional standard.

Earlier this year Mr Bertollino had sought to have the firm wound up over concerns about how it had been run.

He had claimed that GWD’s proposed attempt to go into voluntary liquidation was not being done in accordance with Irish company law and that a court-appointed liquidator was in the best interests of the investors.

Mr Bertellino claims that in 2014 he invested funds with entities that he believed to be related to GWD.

He said he was not happy with the outcome of those initial investments.

He says he was offered and accepted a series of replacement contracts in 2017, which he claims resulted in GWD acquiring plantations of trees in Canada and Brazil on his behalf.

Now owed more than €100,000 he claims that some of the company’s assets may no longer exist while others may have been moved into a network of loosely connected companies.

The firm’s Christmas tree crops were harvested annually, it is claimed, but none of the proceeds appear to have been received by GWD.

Other issues of concern included that GWD allegedly filed statements with the CRO that falsely disclosed that it was dormant and had never traded when it was trading and took in an estimated €30 million from forestry schemes marketed to the public.

The court also previously heard that a Mr Mark Raynor, aka Mark Lewis Daulby, is alleged to be that main influence behind the company.

It is claimed that he was convicted in 2003 of fraud involving the sale of investments to the public.