Tycoon's empire in ruins with debt of €192m
Top golfer among losers after Citywest goes into liquidation
Published 08/01/2011 | 05:00
BUSINESSMAN Jim Mansfield's Citywest empire was in ruins last night after his company went into liquidation leaving a trail of debts totalling €192m.
Several high-profile figures, including one of the country's best-known golfers Christy O'Connor Jnr, are owed money by the wealthy businessman.
More than 400 companies, among them the law firm originally set up by top solicitor and property developer Noel Smyth, are also owed large sums.
Some creditors said they were now faced with the prospect of going out of business.
Significantly, Mr Mansfield will not be personally liable for the debts thanks to the complicated corporate structure of his business.
Several creditors thought they would be able to pursue Mr Mansfield personally as the firm behind the hotel, HSS Ltd, is an unlimited company.
However, HSS is in turn owned by Park Associated, a limited company based in the Isle of Man.
This means creditors have no right to demand repayment from the Mansfield family.
Many of those who are owed money were surprised to learn this when they attended a packed creditors' meeting at the Citywest Hotel yesterday in Dublin.
Mr Mansfield's personal wealth was estimated to be in the region of €420m in 2007.
Sources close to the process said it could be years before creditors see their money, as there is currently no plan in place to shut the hotel or sell off assets piecemeal.
Jim Mansfield's son Tony, who is a director of the company, read out a prepared statement at the meeting, expressing the company's great regret at having to appoint a liquidator.
"We are aware of the difficulties placed on suppliers, in particular small local suppliers. We had expected the development of the new conference centre to allow us to trade out of these difficulties," he said.
He said he and the other directors would provide full support to the liquidator in his efforts to recover value for creditors.
Mr Mansfield said the company was forced to liquidate after Bank of Scotland Ireland withdrew funding for a multi-million euro convention and education centre last year.
The voluntary liquidation was made after the Revenue Commissioners, who are owed €1m, moved to have their own liquidator appointed.
Tony Mansfield confirmed that the family had considered a plan to buy back the business, but said that plan was no longer seen as viable.
The biggest creditor, Bank of Scotland Ireland, appointed Martin Ferris & Associates as receiver to manage the Citywest Complex in July 2010, removing day-to-day control of the business from the Mansfield family.
Last night's move goes a step further, effectively shutting down the company built up by the Mansfield family and starting a process to repay all those owed money -- a procedure that could easily take as long as five years.
- Bank of Scotland Ireland, which is owed €140m. l Irish Nationwide Building Society, owed €11.6m.
- Saggart-based building contractor Swift Concepts, which is owed €23m.
Hundreds of other smaller companies are owed more than €14m between them.
Most creditors who attended the meeting yesterday were smaller-scale suppliers of everything from meat and drinks for the hotel to professional services and cleaning.
George Maloney of accountants Baker Tilly Ryan Glennon was appointed liquidator by the company and is now set to investigate whether the company was trading while it was insolvent.
He has six months to prepare a report on the company for the office of the Director of Corporate Enforcement.
A number of creditors also questioned whether the true extent of the company's debt was out in the open.
Two people at the meeting, who claimed to be owed €300,000 and €50,000, demanded that they be added to a list of creditors provided by the directors.
Five creditors, including a representative of the Revenue Commissioners, Paddy O'Connor of Swift Concepts, and HSS representative Tony Mansfield and Richard Mahon, were appointed to a seven-strong committee of inspection which will work alongside the liquidator.
Mr Maloney offered little chance of a fast recovery of debts. Estimates provided by the directors suggest unsecured creditors could receive around 30c in the euro when the assets are eventually sold but a source involved said that was highly optimistic.
A source also said that a €120m valuation placed on the hotel and leisure business was optimistic.
Creditors were told that no directors' loans were outstanding in 2010 when the business was put into receivership but that there had been directors' loans of up to €1m outstanding in 2009.