NAMA-backed property firm withdraws court application
THE country's biggest Irish-owned retailer escaped being "wound up" by the courts yesterday after Dunnes Stores paid €21.6m owed to a Kilkenny property company, which is backed by the National Asset Management Agency.
Property developer Holtglen withdrew its application to wind up the Dunnes Stores chain following payment of the outstanding debt.
It ends a tense legal stand-off between two of the country's biggest companies, because Holtglen was backed in its action by NAMA, which is also its main creditor.
A winding-up order would not have led to Dunnes shops being closed down but threatened the company that controls the group.
The money was owed for Holtglen's development of a shopping centre in Kilkenny, the Commercial Court heard yesterday.
Holtglen is insolvent; however, NAMA had authorised the developer to bring the petition after Dunnes failed to pay the debt, even after an arbitration award was made against it, followed by a judgment order in March.
NAMA backed the claim because ultimately it will receive the cash recovered.
Holtglen has claimed it was forced into insolvency following the non-payment of the debt by Dunnes.
The retailer had said it was unwilling to pay the money to Holtglen on several grounds, including concerns about the viability of the centre at Ferrybank, which is situated on the Kilkenny-Waterford border. When the matter came before Judge Peter Kelly yesterday, he was told by Holtglen barrister Maurice Collins that he wanted to withdraw the petition, as Dunnes had paid the money owed on Thursday evening.
The money should have been paid sooner. There was "no excuse" why it was not, and while his side regretted having to bring the petition, it had to do so to achieve compliance, the barrister said.
Brian O'Moore, a barrister acting for Dunnes, said the court was aware of the reasons why the money was not paid.
Those reasons may be good or bad but they were "genuinely held", he said.
Mr O'Moore added he had express instructions that Dunnes had intended no discourtesy to the court.
Judge Kelly said he was glad to hear the barrister say this because the failure to pay could be regarded as a challenge to the court's authority.
The matter was "not so simple", as the petition was for the benefit of all creditors of Dunnes, he added.
He directed that any other creditors be called.
There was no appearance by any other creditor, and Mr Collins said none had indicated an intention to appear.
The judge was also told the issue of legal costs had been agreed between the parties.
Dunnes Stores, which employs 18,000 people, had previously said it was "robustly solvent".