A BUILDING company is to be wound up after the High Court yesterday refused to approve a survival scheme for it.
Laragan Developments, which has 50 employees and is part of the Hanly group of construction and quarrying companies, has liabilities of €147m and assets worth €2.35m. The court heard €101m of Laragan's liability is owed to Alan Hanly of the Hanly group.
Mr Justice Frank Clarke, who had been asked to approve a survival scheme, said yesterday he was not prepared to do so because of a number of concerns, including the relationship between Laragan and Alan Hanly.
Laragan was used as a "vehicle of convenience" by Mr Hanly, the judge said, while the main creditors include Anglo Irish Bank, AIB and the Revenue Commissioners.
The survival scheme had been proposed by interim examiner Paul McCann, a partner with Grant Thornton, who was appointed by the court last March.
Mr McCann sought to get additional finance to ensure the survival of the firm and was able to secure a bank loan and a loan from Alan Hanly totalling €2.95m.
Under the proposed scheme, creditors would receive between 1pc and 30pc of what they are owed. Trade creditors would at a minimum get 6.4pc of what they were owed.
Approximately 100 people who paid deposits of between €15,000 and €20,000 for properties at Carrickmines Green in South Dublin and Milner's Square in Santry, Dublin, would have received just 1pc back. A majority of the different classes of creditors had voted in favour of the proposed scheme.
However, some of the creditors who attended last week's hearing of the application to approve the scheme called on the court to refuse to approve it in order to allow a liquidator carry out a full investigation into Laragan's affairs.
Yesterday Mr Justice Clarke said that irrespective of the current housing market, Laragan had been unfair to both private and trade creditors.
Laragan did not exist independently on its own from Mr Hanly and there was a lack of detailed arrangements between the firm and Mr Hanly.
The judge also put a stay on his decision to today in the event of an appeal.