Former directors who allowed firm to continue trading after 2009 'acted responsibly', High Court hears
FOUR former directors of Pierse Contracting - once Ireland's third largest building contractor - are men of honesty and integrity who believed they were acting responsibly in allowing the firm continue trading beyond 2009, the High Court heard.
Lawyers for the four have strongly rejected arguments by the firm's liquidator their conduct amounted to "wilful self-delusion" justifying the making of restrictions on them as company directors.
Mr Justice Brian Cregan heard final arguments yesterday on the application by liquidator Simon Coyle for restriction orders, under Section 150 of the Companies Act, against former CEO Charles Norbert 'Nobbie' O'Reilly, chairman Ged Pierse, worker director Michael McNamara and non-executive director Kieran Duggan.
Restriction orders were previously made against five other former directors - Fearghal Nolan, Martin Murphy, Michael O'Reilly, Matthew Duggan and Brendan Cahalin.
In correspondence with Mr Coyle, the five said they believed they acted honestly and responsibly at all times in the conduct of the company's affairs but were not in a financial position to oppose the application.
Pierse, then employing 109 people, was wound up in November 2010 with a deficit of €212m and Mr Coyle claims the directors should have realised by April 2009 it was effectively insolvent.
In his application, Mr Coyle said he accepts the directors acted honestly and had invested €16m of their own funds in the company but claims that was "throwing good money after bad".
In submissions yesterday on behalf of Kieran Duggan, his counsel argued that, in alleging the directors were wilfully irresponsible in permitting the company continue trade after April 2009, Mr Coyle was being unfair, utterly unrealistic and acting with the benefit of hindsight.
Mr Coyle's view the firm's accounts in 2009 were significantly overstated by tens of millions did not justify making restriction orders against his client, who with the other directors acted honestly and relied on professional advice from valuers and others when making financial projections, counsel said.
As economic conditions deteriorated, Mr Duggan paid particular attention to the financial position of the company, raised issues if it should continue trading and was satisfied with the position set out by the executive directors concerning cash flows and other matters, counsel added.
Counsel for Michael McNamara said his client was an engineer who in 2005 was headhunted and returned to Pierse. He was not looking to avoid consequences on the financial side but his experience was in relation to contracts and supervising those. He was on the board from September 2006 to December 2009, an employee, not a shareholder, and a full-time working director.
He and other directors acted honestly and responsibly and a restriction order would be a "huge stigma".
Mr Justice Cregan reserved his judgment.