Waterford Castle can continue to trade after provisional liquidator appointed
THE Waterford Castle Hotel and Golf Course - which employs 80 people - can continue to trade after the High Court appointed a provisional liquidator to run the business.
The National Asset Loan Management Ltd (NALM), a company of NAMA, petitioned the court to appoint Aiden Murphy as provisional liquidator over the hotel owners, Newgold Ltd and Cendant Ltd, which owe NALM some €33.8m.
The four-star hotel is located at Little Island Ballinakill, Waterford.
The court heard that NALM brought the petition to ensure the facility, which consists of a 19 room hotel, 48 lodges and an 18 hole golf course on a 310 acre site, can continue to trade as a going concern.
Yesterday, Ms Justice Mary Laffoy said she was satisfied to appoint Mr Murphy as provisional liquidator to the companies. The appointment was in the best interests of the creditors, the Judge said.
Rossa Fanning BL, for NALM, said both companies are "hopelessly insolvent", unable to pay their debts and should be wound up. The money is owed to NALM on foot of guarantees on mortgage agreements entered into between the companies and AIB in 2007.
Counsel said earlier this month NALM made a demand on the companies repay the money owed. When the demands were not satisfied, a statutory receiver was appointed. However that receiver was only appointed over the two of firm's fixed assets.
NALM did not have security over the trade of the hotel and golf club. It was not certain that with the receiver’s appointment the business would continue to trade, counsel said.
In light of that, counsel said, NALM was seeking to have Mr Murphy appointed as liquidator. Such an appointment was required to maintain the goodwill of the businesses, and ensure all bookings such as weddings, summer holidays and golf outings are honoured.
This was especially important at this time of year which is high season for the hotel trade, counsel said. Any cancellations would damage the business, and would reduce the value of the asset.
Even if the facility were to close for a week to 10 days the inability to honour bookings would "reverberate very quickly on the internet" and result in a loss of public confidence", counsel said.
Counsel said NALM was also concerned about an increase in creditors arriving unannounced to Waterford Castle seeking "self help remedies". One creditor sent debt collectors and another another has threatened to inform all golf members of non-payment.
Another creditor also threatened to block access to the ferry, which is the only way Little Island can be accessed from the shore, unless they got paid, counsel added.
The companies’ directors John Simpson, Mark Ricketts, Fergus Applebe, Mark O Driscoll, while Gregory McGinn is the company secretary of both firms
Ms Justice Laffoy, in appointing Mr Murphy, said she see "the good sense" of what was being proposed by NALM.
The matter was made returnable to July 31.