The High Court adjourned a petition to wind up Irish Asphalt Limited after finding that concessions offered by the petitioner, JECL, had not sufficiently mitigated the effect a winding-up order could have on the company’s defence in a complex trial due to begin on 14 November 2017.
In a judgment delivered on 4 October 2017, Mr Justice Tony O’Connor said the court remained concerned about an insolvent company continuing without a liquidator. But he concluded that the loss of Irish Asphalt’s opportunity to defend itself in the imminent Deceit proceedings, which could have serious effects for those involved, had not been sufficiently addressed.
JECL had offered not to seek a default judgment against Irish Asphalt before judgment or earlier resolution of the Deceit proceedings. It also undertook to seek to lift the automatic stay on those proceedings, oppose an adjournment of the trial, and share relevant communications with a liquidator. JECL said it would pay the liquidator’s fees for an application to lift the stay and had previously agreed to cover estimated investigation and legal fees.
The court also considered conditions proposed by LHL, which was not a party to the Deceit proceedings but had an interest because of its security over Irish Asphalt’s assets and undertaking. Those conditions would limit JECL to establishing liability against Irish Asphalt, defer any assessment of damages, restrict costs sought from Irish Asphalt if it did not defend the trial, and allow LHL to seek costs incurred by the company in specified circumstances. The judge understood JECL would undertake to abide by them.
The judgment said there was no concrete evidence that experts or witnesses identified by Irish Asphalt would be unavailable to the other defendants. The judge left that issue to Ms Justice Costello, who was assigned to the estimated 20-week trial. He also said the other defendants’ possible loss of access to documents and evidence held by a liquidator was no more than they could have expected if they had met their regulatory and legal obligations.
The court adjourned the petition, allowing any party to restore it on seven days’ notice and directing that it return so the court could give further directions. Existing undertakings by Irish Asphalt’s directors and LHL restricting the company’s activities, losses and costs were to continue until further order.
A note appended to the judgment records that on 26 October 2017, after being told Irish Asphalt’s only other creditor was LHL, the court granted JECL leave to withdraw the petition with the consent of all parties, including LHL.