Building firm to be wound up over €3.3m debt
Redevelopment of White's Hotel in Wexford left company in the red
Sub-contractors protest at Whites Hotel, Wexford Town, last November, claiming they were owed €3.2m for work carried out. Photo: PATRICK BROWNE JNR
Balmaford, the company which developed White's Hotel in Wexford between 2004 and 2006, is to be wound up and a liquidator has been appointed to the firm by the High Court.
The company is being wound up following a petition by Cleary & Doyle Contracting, the main contractor in the redevelopment of the hotel, which is owed €3.3m by Balmaford.
The petition was due to the debt incurred during the €42m redevelopment of White's Hotel, which has been owed since August 2006, according to a spokesperson for the contractor.
This is despite Cleary & Doyle securing a High Court judgment for payment of the debt by Balmaford in July 2008, the spokesperson added.
The directors of Balmaford are Michael Burke, Liam Clancy and James White.
Liquidator Julian Caplin of FGS, formerly Farrell Grant Sparks, will send a report on the company to the High Court.
The liquidator will determine whether the directors of Balmaford are personally liable for the debt and also whether they could be restricted in the future.
The liquidator also has six months to send a copy of the report to the Office of the Director of Corporate Enforcement (ODCE) as per Section 56 of the Company Law Enforcement Act 2001.
One of the purposes of the Section 56 report is to provide the ODCE with sufficient information to enable them to determine if they should relieve a liquidator from proceeding with a Section 150 application to the High Court.
The Section 150 application is designed to provide the High Court with an opportunity to determine if the directors acted "honestly and responsibly".
Application
The taking of such an application does not necessarily mean that the directors did not act honestly and responsibly and in many cases directors demonstrate to the High Court that they did not act in this way.
Balmaford is being wound up under Section 213(e) and Section 214 of the Companies Act.
A complicated structure was put in place for the construction of the hotel.
Balmaford was set up to develop the hotel and then let it to White's Hotel Ltd -- the operating firm.
According to the spokesperson for Cleary & Doyle, a "significant portion" of the outstanding money is for subsequent payment to a group of approximately 60 subcontractors and suppliers who worked under the contractors on the project.
At the end of last year, representatives of various sub-contractors held a demonstration outside the hotel, complaining that the developer of the property, Balmaford, had not paid the monies due.
The landmark Wexford town hotel underwent a €42m revamp between 2004 and 2006, with the project involving a €9.6m investment by a group of wealthy individuals assembled by Davy Stockbrokers.
As long as the hotel remained open, the investors, including Glen Dimplex chairman Martin Naughton and former Davy executive David Shubotham, were entitled to offset their investment against their tax bills for seven years after the redevelopment.
Last week, Pat McCann of Maldron Hotels took over the management of White's following the appointment of a receiver to the business.
The arrangement will allow White's to remain open under the management team of the former Jury's Doyle chief executive.
- Ailish O'Hora
