Margaret Heffernan and NAMA clash over bid to wind up Dunnes Stores
Published 26/11/2012 | 18:49
DUNNES Stores chief Margaret Heffernan has clashed with NAMA over a bid to wind up the company.
She says NAMA will be held responsible for the "very significant losses" her company will "inevitably" experience if a petition is pursued to wind up the retail giant over non-payment of some €21.6m for a shopping centre development in Kilkenny, where Dunnes had agreed to be the anchor tenant.
The petition has been fixed for hearing on December 14 in the Commercial Court.
Dunnes, employer of 18,000 people, is "robustly solvent" but unwilling to pay the money to the shopping centre developers Holtglen Ltd which is insolvent and its loans gone into NAMA, Dunnes counsel Brian O'Moore SC told the court today. There were a number of a grounds for this, counsel said, including the the viability of the centre at Ferrybank, Kilkenny.
In strongly worded letters to NAMA CEO Brendan McDonagh, Mrs Heffernan described the Ferrybank centre as "an unmitigated disaster" and the winding up petition as "an abuse of process".
It cannot be NAMA's belief Dunnes is insolvent or that any petition to wind up Dunnes on grounds of insolvency is justified, she said.
Mrs Heffernan said the mere presentation of the petition would damage Dunnes and Ireland as a whole and advertising the petition will simply exacerbate that harm.
Pressing the court to appoint a liquidator to Dunnes was "an extraordinary step" for anybody, particularly a public agency, to take, she added.
Mrs Heffernan also accused NAMA of failing to address any of the "substantial" issues raised by Dunnes concerning the centre and said a report prepared by a planning consultant for Dunnes expressed the view the centre was not compliant with planning permission.
Dunnes employs 18,000 people, contributes very large amounts to the State's coffers via tax payments and continues to be one of the best known and successful Irish companies, she said.
In relying letters, Mr McDonagh insisted Dunnes must pay the €21.6m to Holtglen before NAMA will engage in any talks about the operation of the Ferrybank development. The fundamental issue was the "persistent refusal" by Dunnes to pay, he said.
NAMA Chairman Frank Daly told Mrs Heffernan in letters he did not agree the centre was not commercially viable. Dunnes' failure as anchor tenant to fit out and open its anchor store had adversely affected the reputation of the centre and of Holtglen, he said.
Because Dunnes had refused to pay Holtglen - despite an arbitrator's award of October 2011 and a court judgment last March - NAMA was left with no option but to take the legal route, Mr Daly told Mrs Heffernan.
He was disappointed there were no "meaningful proposals" from Dunnes.
In a letter of October 11, Mr Daly told Mrs Heffernan he had phoned her personally on June 28 last following the last meeting between Dunnes and NAMA on the matter "and you did not return my call".
The case arose after NAMA wrote to Dunnes on October 30 last warning, unless Dunnes paid €21.6m to Holtglen within seven days, it (Holtglen) would make the wind up petition on grounds it was unable to pay its debts and/or that it was just and equitable that it be wound up.
Yesterday, seeking to have the petition fast-tracked in the Commercial Court, Maurice Collins SC, for Holtglen, said Dunnes has deliberately decided not to pay - despite asserting it has capacity to pay.
This was "a novel proposition", counsel said.
Concerns in relation to planning were "just thought up" and issues about the centre's viability were not relevant and subject of separate proceedings, he added.
Mr Justice Peter Kelly agreed to transfer the petition to the fast-track Commercial Court.
In a situation where Dunnes had not appealed his judgment last March enforcing an arbitrator's award to Holtglen against Dunnes, it was difficult to see how the retailer has a defence to payment, he said. He was not determining the issues, he stressed.
Last March, Mr Justice Kelly granted summary judgment for €20.4m to Holtglen against Dunnes after upholding an arbitrator's award to Holtglen arising from a 2007 agreement to build the centre for €37m.