COURT HEARING:THE HIGH Court has appointed a provisional liquidator to two companies in Liam Carroll's Zoe development group on the back of petitions from Dutch-owned ACCBank, which is seeking to recover unpaid loans totalling €136 million.
The bank’s applications followed a decision by the Supreme Court on Tuesday evening to withdraw court protection to the two companies, Vantive Holdings and Jersey-registered Morston Investments, and six related firms.
Mr Justice Iarfhlaith O’Neill appointed accountant Declan Taite of Dublin firm FGS as provisional liquidator to Vantive and Morston, which owe ACCBank €63.9 million and €72.1 million respectively in unpaid loans.
Rossa Fanning, representing ACC in court, told the Mr Justice O’Neill that the companies were “grossly insolvent” and unable to pay debts as they fell due. He said any hope of examinership for these firms had passed. “These companies have nowhere else to go but liquidation,” Mr Fanning told the court.
The judge said, in the circumstances, it was appropriate to appoint a liquidator to the companies. He granted orders allowing Mr Taite a number of powers, including the ability to retain and dismiss employees, secure the assets of the companies, appoint additional directors, hire solicitors and open new bank accounts.
The winding-up petitions were heard ex parte, meaning that only one side was represented in court.
The court heard that the companies have large deficits, €396 million in Vantive’s case, and Mr Fanning said that they should be “put under the stewardship of an independent solvency practitioner”.
Court filings show that Morston has a deficit of €361 million.
The court heard that Vantive is owed debts of €569 million by other group companies and counsel said that every step should be taken to protect its assets.
ACC’s action was precipitated by the issuing of demand letters by the bank, which is owned by Dutch lender Rabobank, to the companies on June 29th last seeking the repayment of loans within 21 days.
This prompted the Zoe group to seek court protection in an application to the High Court on July 17th. The court refused to extend protection and appoint an examiner to six companies in the Zoe group and it later failed in its appeal to the Supreme Court.
Mr Fanning said that more than three weeks had passed since the demand letters were issued and both companies had failed to pay the money owing to ACC, which is one of eight banks owed €1.2 billion by the wider Zoe group.
Mr Justice O’Neill granted a series of orders sought by ACC.
A full hearing of the application to confirm the appointment of the liquidator will be heard by the court on September 9th.
As the court heard the winding-up petitions, the group’s banks, with the exception of ACC, held a meeting to consider a response to the failure of Mr Carroll’s Supreme Court appeal.
Last month, Mr Justice Peter Kelly, sitting in the commercial division of the High Court, rejected the Zoe Group’s survival plan, saying the future property valuations contained in the report were “lacking in reality” and “fanciful”.
The Supreme Court dismissed an appeal of the ruling, saying that the six companies seeking court protection had not established that their strategy for the future orderly disposal of key assets was “credible or reasonably viable”.
ACC’s spokeswoman said the bank had no comment. Mr Taite couldn’t be reached for comment.
