Clerys case moves closer to a denouement

The almost four-year-old saga of the closure of Clerys department store moved a step closer to a conclusion on Wednesday, after submissions from the liquidators and former directors who were facing restriction proceedings.

The KPMG liquidators had previously been seeking the disqualification as directors, or at the very least the restriction, of former Clerys directors Rafael Klotz and Malcolm McLennan Mac Aulay.

The two men are top executives at the Boston-based private equity group, Gordon Brothers, which sold Clerys to property developers in June 2015, hours before it was shuttered.

The KPMG liquidators had concerns over their alleged conduct, including what they knew about the impending closure and when, and also whether they had done enough to protect the cash of concessionaires. It was supposed to be held for them in trust, until it was swallowed up by the liquidation.

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Lawyers for the liquidators, however, told the High Court on Wednesday that their concerns have now been “alleviated”, after Gordon Brothers released documents that had previously been the subject of a gagging clause as part of the sale of Clerys to Natrium, the consortium that was led by Deirdre Foley.

Face-to-face meeting

It seems the liquidators and Klotz/Mac Aulay made their peace in January, when the two men’s lawyers sent extensive material to the liquidators and facilitated a face-to-face meeting.

The paperwork exchanged apparently includes a letter from Gordon Brothers that was sent to Natrium’s lawyers the day after the controversial closure, expressing “serious concerns” about what happened, as the seller had apparently thought it had sold the business as a going concern.

Subsequent to the January meeting, Gordon Brothers agreed to pay €785,000 from its own pockets to reimburse concessionaires that had lost out, which would have further convinced the liquidators that there was little point in pursuing Klotz and Mac Aulay in the interests of creditors.

The liquidation is now almost complete, save for legal action that was launched by angry former concessionaire Lorraine Sweeney, who ran Clerys’ cafes. She says she won’t accept the Gordon Brothers offer, and plans to raise in court the issue of who knew what about the closure plan, and when, among all relevant s parties including Natrium, Gordon Brothers and also KPMG.

The Clerys liquidation’s final act could yet end up as one of its most interesting.