The High Court has refused a liquidator’s application to restrict John McKeogh from acting as a company director, finding that he acted honestly and responsibly in relation to Whelan Limestone Quarries Limited and Whelan Limestone Quarries (Contracts) Limited.
Mr Justice Quinn delivered the judgment on 19 May 2021. The application was brought under section 150 of the Companies Act 1990. It concerned the respondent’s conduct as a director of the two companies, which were part of the Whelans Limestone group and went into liquidation in December 2010.
The liquidator alleged that invoices for work carried out by Contracts were submitted to Bank of Scotland Ireland under Quarries’ invoice financing agreement. He said the companies also re-entered unpaid invoices as current, and that the alleged practices increased the bank’s exposure and concealed financial difficulties. He further alleged that the respondent should have identified the practices and that the companies continued trading while insolvent.
Mr McKeogh denied involvement in the invoice financing arrangements. He said that, despite his job title, the Whelan family directors controlled the relevant functions and he was excluded from managing the facility. He also described measures he said he took to reduce costs and restructure debt as the group faced financial pressure. On late company filings, he cited uncertainty over amounts owed by Uniform Construction Limited during an arbitration dispute.
The judge said the liquidator’s claim that Mr McKeogh was party to, or knew of, the alleged invoice practices had not been made out. The liquidator’s assertion that an executive must have known was, in the absence of direct evidence to contradict Mr McKeogh’s sworn account, based on surmise. The court accepted that he had been excluded from direct involvement in the invoice financing arrangements.
The judge also accepted Mr McKeogh’s evidence about steps taken to address financial pressures and found he was not in control of decisions to cease trading or liquidate the companies. The explanation for filing delays was not a full justification, the court said, but the evidence indicated that the matter was outside his control and did not show neglect or a lack of responsibility.
The judgment noted that company records had been destroyed, leaving limited documentary evidence, and that both sides had contributed to the resulting information deficit. It also recalled an earlier ruling dismissing Mr McKeogh’s application to strike out or stay the restriction proceedings. That ruling addressed the documentary-access dispute, not the merits of the restriction application.
Having found that Mr McKeogh acted honestly and responsibly, the High Court refused the restriction relief sought. The judgment makes no restriction declaration against him in this application.