Firm seeks wind-up of Dunnes Stores
A COMPANY is seeking to wind up Dunnes Stores over its failure to pay €21.6m due under a court judgment issued over an unpaid debt for building works.
The case is listed before the Commercial Court on Monday.
Holtglen Ltd, which built a shopping centre in Kilkenny in which Dunnes agreed to be the anchor tenant, has brought the petition following Dunnes' failure to pay after being ordered to do so by Mr Justice Peter Kelly in a summary judgment order issued last March.
The Ferrybank shopping centre was completed in 2009, but Holtglen later became insolvent and its Bank of Ireland loans were transferred to NAMA company, National Assets Management Ltd (NALM).
It is understood NAMA wrote to Dunnes on October 30 warning that, unless it paid €21.6m [the €20.4m judgment sum plus interest] within seven days, Holtglen would proceed to publish a petition to wind up Dunnes.
Holtglen claims there is no justification for Dunnes not paying the sum due.
Mr Justice Kelly granted summary judgment for €20.4m to Holtglen against Dunnes after he dismissed Dunnes' application to set aside an arbitrator's award for €20.2m to Holtglen arising from an agreement to build the centre.
Holtglen claims that, despite the summary judgment order, Dunnes has still not paid.
Last September it served a notice on Dunnes under Section 214 of the Companies Act.
If the debt is not paid within 21 days, a petition can be presented to the court seeking to have the company wound up.
On November 9, a petition was issued.
Previously, the Commercial Court heard Dunnes had instituted arbitration proceedings claiming breaches of a development agreement by Holtglen, which in turn counter-claimed for payment.
Holtglen claimed it was then entitled to stage payments due under the development agreement, plus other sums for which it had counter-claimed.
It said it has very large borrowings in connection with the Ferrybank development and it was "of the utmost importance" it was paid by Dunnes as soon as possible. Holtglen later became insolvent.
In October last year, the arbitrator, while upholding some of Dunnes' complaints, found Holtglen had remedied those matters and Dunnes was not entitled to terminate the development agreement.
Dunnes applied to the Commercial Court to set aside the arbitrator's findings. It argued, that as Holtglen was insolvent, it was precluded from claiming the money due.
During the hearing, the court was told Holtglen's loans due to Bank of Ireland had been transferred to NALM.
Mr Justice Kelly said the transfer meant NAMA had stepped into the shoes of Holtglen and its insolvency was now an irrelevance.
The judge found the arbitrator had not erred in law in the approach taken by him to construction of the agreement between Dunnes and Holtglen.
Despite the fact the shopping centre was completed in 2009, Dunnes had only paid "a fraction" of the money due for the work, he said. The logical outcome of Dunnes' argument was a "wholly unattractive" result from the point of view of business common sense.
The judge granted Holtglen summary judgment for the €20.2m after rejecting Dunnes' application for an adjournment to allow it to consider his ruling.