Solar 21 proceedings adjourned to enable provision of further information to concerned investors

Lawyers for various cohorts of investors and brokers wanted the court to adjourn the High Court hearing on account of an alleged deficiency in information provided to creditors

The hearing of proceedings seeking to convene a creditors’ meeting for two companies in the Solar 21 renewable energy investment firm has been adjourned to enable the provision of further information to concerned investors.

The High Court heard Dublin-based EFW 21 Renewable Energy Ltd and EFW 21 Renewable Energy (Ireland) Ltd had provisionally booked the RDS in Donnybrook for a proposed meeting, which more than 2,000 creditors were expected to attend.

Lawyers for various cohorts of investors and brokers wanted the court to adjourn hearing on account of an alleged deficiency in information provided to creditors regarding a proposed restructuring scheme for the EFW firms.

Loan note and preference share holders are likely to receive 61.2 per cent of what they are owed or 80 per cent of what they invested if the scheme is successfully implemented, the companies have said.


On Friday senior counsel for the companies, Lyndon MacCann, with barrister Declan Murphy, said his clients were “adamant” they have provided more than enough information. However, they were consenting to the adjournment and would engage with investors and creditors with a view to providing further information.

Mr Justice Michael Quinn scheduled for the case to return to court on June 23rd.

Some £209 million (€240m) was raised from Irish investors to build a waste-to-energy plant in Yorkshire, England. The EFW companies abandoned the project, claiming it was no longer viable due to significant delays encountered after the planned technology provider went into administration in January 2020.

On Thursday, lawyers for 32 brokers whose clients invested in loan notes said the “actual reason” for the project’s abandonment was the companies “had given the money away”. Seven of the 32 brokers themselves invested in the loan notes.

Marcus Dowling SC, with barrister Brian Conroy, instructed by Crowley Millar Solicitors, for the 32 brokers, complained about a “fundamental information deficit” in the circular that caused it not to meet requirements under the Companies Act of 2014.

Mr Dowling said £196 million of Irish investments, much of which was people’s pensions, needed to be accounted for and dates of intercompany loans must be set out. At least £90 million of the money invested in the scheme firms was used to repay earlier loans in other companies in the group that matured.

His clients do not believe the companies had any entitlement to use the money raised to pay other liabilities, the court heard. If those earlier loans were not repaid upon their maturity, subsequent fundraising for the Yorkshire project would not have been successful, he added.

Mr Dowling said the proposed restructuring scheme “could be the best course of action”, but his clients cannot assess this without learning where the money went and how big the “pie” is now. He said the choice for creditors was not between the scheme and liquidation, as posited by the companies, but between the scheme and “holding the people responsible for the dissipation of the money accountable”.

Barrister Neal Flynn, instructed by O’Shea Barry Solicitors, for four investors, said his clients were reserving their position regarding whether they would seek the appointment of an inspector to the firms under section 747 of the Companies Act.

The adjournment was also welcomed by barrister Stephen Brady, representing a loan note holder who invested more than €100,000. Mr Brady said his team hag written to the Corporate Enforcement Authority in advance of a potential application for the appointment of an inspector.

Gareth Flynn, counsel instructed by Lavelle Partners for seven investors, consented to the adjournment while noting there was no prohibition on seeking to appoint an inspector.

Solar 21′s sole director and shareholder, Michael Bradley, said in an affidavit that the EFW 21 and EFW Irl firms provided loans to several other companies in the group, including £76.9 million to the Tansterne Biomass and Plaxton Biogas projects. These loans were expected to be repaid before the funds were required by the two EFW firms but the biomass and biogas projects were also delayed.

He said the lag in disposing of the projects, along with cash-flow issues in other companies in the group, had meant the intercompany loans have not yet been repaid and there was now “insufficient liquidity” in the EFW firms to meet investment repayments.

Mr MacCann told the court the companies have provided a “full and candid” explanation for where the money had gone and said loans to other group companies were “in the best interests” of the EFW firms, which would have been able to earn an interest rate.

The scheme of arrangement was “naturally better” for the investors than a liquidation and was “the only show in town”, he said. The restructuring scheme would benefit from a £36 million contribution that investors would not see in the event of a liquidation.

On Friday he said the companies were consenting to an adjournment so more information could be provided to investors.

Ellen O'Riordan

Ellen O'Riordan

Ellen O'Riordan is an Irish Times reporter