Home budgeting firm owes €10m to customers and AIB, court hears
Published 25/08/2011 | 05:00
A HOME-BUDGETING company that collapsed owes its customers and a bank a total of €10m, it has emerged.
The High Court yesterday confirmed the winding-up of Home Payments Ltd, which ceased trading earlier this month. It made the order after being informed that the company owed 2,300 of its customers €6m and AIB a further €4m.
Yesterday, AIB told the court it rejected claims that it was to blame for Home Payments going into liquidation.
Ms Justice Mary Laffoy approved the appointment of chartered accountants Eamonn Richardson of KPMG and Eamon Leahy of Leahy and Company -- who had previously been acting in a provisional capacity -- as joint liquidators of the firm.
The judge said she was satisfied that the company was insolvent and unable to pay its debts.
She also ordered the company's three directors -- Eamonn O'Connor, Niamh Ryan and Connor O'Connor -- to file statements of affairs within 21 days.
The matter was listed before a sitting of the Examiner's Court in September.
Ciaran Lewis, for Home Payments Ltd, of 18 Rathgar Road, Dublin 6, said the company sought the liquidators' appointment because its liquidity provision was insufficient to pay all its customers in full if the customers decided to withdraw all amounts standing to their credit.
In its petition to the court, the company said AIB, with which it had banked for many years, sought a review of its business due to concerns the bank had over deposits and credit balances in its accounts and the use of funds for investments.
The company said it was surprised at AIB raising such issues as it operated its business with the full knowledge of the bank.
On August 3, the bank refused to let Home Payments withdraw €2m held in its account.
Yesterday, Andrew Fitzpatrick, for AIB, said the bank supported the application to have the company wound up.
However, he said that AIB had concerns about claims made in a sworn statement put before the High Court earlier this month when it sought the appointment of the joint provisional liquidators.
AIB, said Mr Fitzpatrick, was not responsible for Home Payments going into liquidation. The bank froze €2m in the company's account over concerns that it had for Home Payments' customers.
Counsel added that the bank had "no hidden agenda" and had informed the company's directors prior to its decision to go for liquidation that it was "prepared to work with them".
William Abrahamson, for Home Payments' directors, told the court that his clients rejected any allegations that they had acted in an improper manner.
Ms Justice Laffoy said the purpose of yesterday's hearing was to confirm the appointment of liquidators. However, she gave AIB permission to raise any concerns it has when the matter comes before the Examiner's Court.
The judge also gave Home Payments' directors permission to respond to any claims by the bank against them.
Home Payments was set up in the 1960s to provide a household budgeting service in the Dublin area. It evolved into a nationwide budgeting and bill-paying service. In recent years it also acquired a number of investment properties.
At the time of its closure, the firm had 2,300 customers, more than 1,500 of whom are owed less than €3,000. Approximately 700 customers are owed between €3,000 and €10,000, while 23 customers are owed in excess of €10,000.