Bank installs receiver at firm belonging to Caulfield
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Friday November 06 2009
ULSTER Bank has installed a receiver at one of the main trading companies of Donal Caulfield, the developer who became a poster boy for the gifts bestowed by the property boom.
The receiver has been appointed to LM Developments, a property company best known for North Dublin's racily-advertised Belmayne development, and more recently famed for knocking more than €3m off the prices of houses at Malahide's 'Streamstown Wood'.
The Irish Independent understands that David Hughes of Ernst & Young was appointment to LM on behalf of the bank on Monday.
News of his appointment comes as fresh accounts at the Companies Office show LM returned pre-tax losses of €23.4m last year, after turnover collapsed from €128m to €55m.
The filings also show LM had loans of about €7m falling due to Ulster in 2009, including €1.1m advanced through invoice discounting.
The loans were the subject of an "indemnity guarantee" from LM's parent Vue Three Sixty.
Vue Three Sixty was due to repay bank loans of almost €290m to unspecified banks in 2009 and returned losses in both 2007 and 2009, separate accounts show.
A spokeswoman for Ulster said she couldn't comment on the extent of the bank's exposure to LM due to "client confidentiality".
Turnover
The latest filings for LM, signed off at the end of September, refer to a "very testing" commercial environment that has "severely affected" both LM and its parent.
"In response ... recurring administration expenses have been reduced significantly in line with the decrease in turnover," the directors say.
They add that staff numbers, which fell from 154 to 91 in 2008, now stand at 46, while "all other costs have been similarly reduced".
Payment extensions have also been agreed with "several large subcontractors and suppliers", assisting the company in "dealing with the capital shortfall", the directors say. "The directors remain in continuous dialogue with its bankers with a view to renewing the current bank facilities, securing continued support and future availability of facilities, without which the company will not be able to trade," the directors add.
A further question mark is placed over the company's future by a statement that while LM has "managed to secure new third party work during 2009" the company will "find it very difficult to continue to trade" without the "commencement of construction contracts with related developments in the coming months and the continued engagement of subcontractors and suppliers".
LM's accounts also make reference to an ongoing legal battle over allegedly defective building material used in North Dublin homes, in which LM is named as a defendant.
"The company intends to defend these claims on the basis that the responsibility for product defects lies with the supplier of the products," the directors say, adding that the company "intends to pursue the supplier accordingly".
- Laura Noonan
Irish Independent
