Judge wants more information before signing off on company rescue
Company directors could not be allowed to go from one company to another while leaving a trail of debt behind them before setting up a new enterprise, a judge warned yesterday.
Judge Jacqueline Linnane also pointed out in the Circuit Civil Court that companies should not seek court protection from their creditors under examinerships just to avoid paying their taxes.
The judge made her remarks after being told by barrister Arthur Cunningham, counsel for the Revenue Commissioners, that the insolvent Odessa Club and Restaurant in Dublin's Dame Court owed €78,000 in VAT and another €88,000 in unpaid PRSI and PAYE.
Mr Cunningham had raised concerns on behalf of Revenue with regard to the appointment by a proposed new investor to Odessa of a director/manager, Victor Temple Garner, who, Judge Linnane was told, had been involved in two companies which had previously financially collapsed.
Mr Cunningham said the Revenue had suffered losses in the region of €600,000 regarding companies which had been in the control of Mr Temple Garner and which had gone into liquidation.
Mr Cunningham said the position of the Revenue Commissioners was that those losses were a material matter for the court to consider when being asked to accept a rescue package under a scheme or arrangement being put forward by examiner Joseph Walsh of Hughes Blake Accountants.
Mr Walsh was appointed examiner to Odessa Club and Restaurant Ltd in February after the company became unable to pay debts of more than €1m.
Yesterday he submitted his report to Judge Linnane on a proposed rescue plan for the company.
Judge Linnane directed that Mr Temple Garner provide the court with a sworn statement of his background and business experience, and said that if the newly financed company wished the proposed rescue plan to be accepted by the court he should consider personally attending the next sitting.
Barrister Eithne Corry, for Mr Walsh, said every single class of creditor had accepted the examiner's proposals.
Judge Linnane directed the provision of further evidence on behalf of Revenue and Mr Temple Garner before considering acceptance of the examiner's proposal.