BMW car dealership can't pay its debts, court told
Published 23/07/2010 | 05:00
A BMW car dealership has gone bust because it is unable to pay its debts, the High Court heard yesterday.
As a result, a provisional liquidator has been appointed to McKeon Motors of Kells, Co Meath, to wind up the business.
The company, which also holds the franchise for Mini, Opel, Mitsubishi and Kia, was refused overdraft facilities by Allied Irish Banks on terms that would allow it to continue trading. McKeon, which has been selling cars for 30 years, employed 50 people.
Ms Justice Mary Laffoy appointed Paul McCann as provisional liquidator, noting this was not the first such "tragic" case in the motor trade brought before her in the last 18 months.
The court heard McKeon's had 71 employees and that, after restructuring and redundancies in 2008, sales of €38m that year dropped to €16m in 2009.
In an affidavit, founder and 90pc shareholder Micheal McKeon said that, despite directors' loans of €1.1m being applied to the company this year, it had not been possible to obtain additional support from BMW, which is the most profitable part of the business.
BMW began removing its vehicles from the company's premises this month, while other creditors sought to take vehicles after hearing it was in difficulty, Mr McKeon said.
The value of the stock was put at €1.6m, with €250,000 worth of spare parts.
As a result of this, the directors decided to take steps for a meeting of creditors so that a voluntary liquidation could be arranged, he added.
The latest available 2008 accounts for McKeon Motors showed the company owed creditors more than €12m.
They also showed several banks had received personal guarantees on loans from Mr McKeon, including €2,725,000 to AIB, €500,000 to Lombard Ireland and €100,000 to National Irish Bank.
Ms Justice Laffoy made the matter returnable to August 11.