Judge appoints liquidator to indebted Pierse companies
Published 05/11/2010 | 05:00
THE High Court has appointed a liquidator to one of the country's largest building groups.
Pierse Construction and Pierse Building Services, which employ 109 people, are heavily insolvent, the court was told when an application to withdraw court protection was made yesterday.
Both companies will have a deficit of more than €212m and no unencumbered assets on winding up, the court heard. The liquidator, Simon Coyle of Mazaars, has been asked to investigate a series of issues, including whether the companies continued to trade while insolvent and how such a large deficit was accumulated.
Mr Coyle's appointment was advocated by Patrick O'Reilly, for CF Structures, owed €5.6m, and supported by several other creditors.
Appointing Mr Coyle, Mr Justice Peter Kelly said he felt very sorry for the company's employees who were losing their jobs "on the threshold of Christmas".
He also expressed sympathy for its creditors, who were owed "colossal" sums and were "very aggrieved", feeling they had been "led along by the company when the writing was on the wall" and the companies should have ceased trading long before now. The company's trade creditors are owed some €51.5m.
Debts of €200m did not accumulate overnight, the judge said. These issues would all be investigated by the liquidator.
According to court documents, Robert Dore, a solicitor for several creditors owed €1.7m, had written to interim examiner John McStay saying his clients were "deeply suspicious" of the Pierse directors "who induced them to work on many projects, in particular schools, to meet deadlines in circumstances where these directors must have known of the insolvency of the company".
This insolvency could not have happened overnight but Pierse continued to build up liabilities, "seriously jeopardising the future prospects of my clients and their many employees", Mr Dore said.
In an affidavit, Ferghal O'Nolan, a Pierse director, said the monitoring of its cash-flow position was an "ongoing priority". The companies believed, in the months leading up to the petition, they would be part paid some of the €16m owed to them by Gannon Homes and €1.8m from a schools contract but that did not happen.
In the days leading up to its petition, Pierse become aware substantial cash was not forthcoming, he added.
Paul Sreenan, for Kilsaran Road Surfacing and Contracting and related companies owed €2.7m, said it seemed it was decided to continue trading in the hope Pierse companies would get €16m and €1.8m when €50m was owed to creditors.
The judge dismissed the petition for examinership, made a winding-up order and ordered the companies' directors to provide a statement of affairs within 21 days.