Monday 27 February 2017

Receiver to fuel-distribution business has faced threat that petrol station forecourt would be burned down, court hears

The receiver's staff found that all high value items, including lottery tickets and cigarettes, had been removed along with a number of computers and other records.
The receiver's staff found that all high value items, including lottery tickets and cigarettes, had been removed along with a number of computers and other records.

A BANK-appointed receiver to a fuel distribution business has faced a threat that a petrol station forecourt would be burned down, an incident in which petrol was allegedly deliberately spilled on the forecourt and a man in a balaclava turning up at the premises, the Commercial Court heard.

On September 16, Kieran Wallace was appointed receiver to XL Fuels Group Ltd, which operated the filling station and Centra shop on the Kells Road, Oldcastle, Co Meath, by Bank of Ireland which is owed €2.26m by the company.

Since then, Mr Wallace says, despite repeated demands, the company and its directors and accountant have failed to co-operate and deliver up books and records to enable the receiver continue to trade the business as a going concern.

Michael Curran, a director of XL, appears to be using the company's books to trade a rival "phoenix" company, Hph Fuels Ltd,  thereby stripping away the customers and goodwill of the firm, Mr Wallace says in an affidavit.

As well as operating the Kells Road filling station and shop, Mr Wallace says he is aware the business employs around 30 full-time staff although without records, it is difficult to confirm the precise number.

When Mr Wallace's staff went to the filling station on the day of his appointment as receiver, he says the shutters of the shop were closed by employees and all entrances also closed, preventing access, he says. 

The receiver's staff returned the next day with a locksmith and found all high value items, including lottery tickets and cigarettes, had been removed along with a number of computers and other records.

A number of leased fuel delivery trucks leased by XL were observed on adjoining land which is owned by Mr Curran's brother Joe, Mr Wallace says.

Since then, the trucks have been observed delivering fuel in the locality without any permission from Mr Wallace.  While the filling station and shop have re-opened, there has been no trading in the wholesale distribution side of the business, he says.

Mr Wallace is seeking a number of orders requiring the delivery up of books, records, assets of the company as well as orders requiring the directors to provide a statement of affairs and to desist from contacting customers during the receivership.   Separate injunction proceedings are also pending.

The case is against company directors Michael Curran and his mother Maureen Curran (80), both from Oldcastle, as well as against the company's accountant and auditor Edmond Cahill, of Edmond Cahill and Co, Kells Business Park, Co Meath.

Applying for the case to be admitted to the Commercial Court, Rossa Fanning BL, for the receiver, said this was a case of "outrageous asset-stripping".   An "intolerable situation" had arisen where fuel had been spilled on the forecourt, a threat made to burn it down and a man in a balaclava had appeared, counsel said.

Brian Murray BL, for Mr Curran, opposed entry of the case to the commercial list on the grounds that there was no evidence the case exceeded the €1m threshold for commercial cases.  

Mr Justice Brian McGovern said there was circumstantial evidence that Michael Curran was "orchestrating all this activity" .   Although there were injunction proceedings listed for later this month, the prospect of that case being heard was poor because it is fifth in a list of cases to be heard that day, he said.

He was satisfied it was an urgent matter and that the case did come within the rules for him to admit it to the Commercial Court.

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