Bust builders in restriction battle with liquidator
Contractors owed €50m to creditors
The liquidator of Pierse Contracting, once Ireland's second-biggest construction company, is seeking restriction orders against its former directors under section 150 of the Companies Act, 1990.
Pierse went bust in 2010 leaving a deficit of €212m, one of the biggest collapses of the bust. Nine directors of Pierse Contracting are named in the action being taken by liquidator Simon Coyle of accountancy firm Mazars.
About €50m was owed by Pierce to unsecured creditors, including subcontractors.
After Pierce's liquidation, these creditors complained bitterly and some of them later went bust at least indirectly due to debts not being paid.
Pierse directors include founder Ged Pierse, former CEO Charles Norbert 'Nobbie' O'Reilly and finance director Fearghal O'Nolan.
Its other directors are Kieran Duggan, an adviser to billionaire Denis O'Brien, Martin Murphy, Michael O'Reilly, Matthew Duggan and Brendan Cahalin.
Coyle is seeking restriction orders against its former board after examining how the company traded in the years before it went bust.
He wants to address questions like when exactly did the directors of Pierse knew their company was insolvent and whether the actions they took were appropriate while at the boardroom table.
The manner in which certain shareholders in the Pierse trading company diluted their shareholding in 2004, and whether this contributed to the company's insolvency, is also an area under examination by Coyle.
Another area directors are being asked about is the way in which Pierse moved from being a contracting firm into a development firm with investments in property assets.
When Pierse's attempt to go into examinership failed, two things were cited as destroying its balance sheet.
The first was €75m of loans to other Pierse group companies and related businesses.
Just under €40m of this was to an entity called Remayne, controlled by some Pierse directors and their families, to buy a one-third stake in the overall group's Irish-registered holding company, Birmayne.
The second big issue was €77.4m worth of loan guarantees given to Anglo Irish Bank and Bank of Ireland, to support advances from these banks in order for Pierse to get involved in high-risk property development and investment, sometimes in partnership with developer Paddy Kelly and his family.
At the height of the boom in 2006, Pierse had a turnover of €340m and profits of €16.5m.
It employed 700 people in 2007 but this fell to 211 by 2010 before the company unsuccessful tried to restrcuture itself by applying for examinership.
When Pierse applied for interim examinership, its figures showed current assets were €129.46m on paper, but they were only likely to realise €26.8m. Contractors were so hard-hit by the collapse of Pierse that they held several protests. In 2011 about 50 sub-contractors travelled in a convoy to the Dail to demand new laws to protect them. Pierse's offices on the N3 were the starting point for the convoy.