The High Court confirmed Ciarán Wallace as examiner of Claremorris Tourism Ltd, operator of the McWilliam Park Hotel, and its related company MOPB Developments Ltd, after finding a reasonable prospect that the companies could survive through examinership.
In a judgment delivered on 9 December 2015, Mr Justice Baker said CTL faced an immediate risk from demands by its secured creditor, Coney Investments Designated Activity Company. The court was informed that Coney had demanded payment of the full €1.8 million capital sum said to be owed on a hotel fit-out loan. The judge said the earlier demand could have had catastrophic and immediate effects on CTL’s day-to-day business.
The petition was presented on 10 November and heard on 27 November. Coney, the Revenue Commissioners and shareholder and former MOPB director John Killeen opposed it. Killeen argued that the petition was intended to delay his proceedings against MOPB, in which he sought €974,775. He also alleged wrongdoing by the companies and directors. The judge rejected his claim that examinership was being used to avoid a Revenue investigation or prosecution. These were allegations and submissions, not findings of wrongdoing.
The court accepted that MOPB, which owns the hotel site and all shares in CTL, did not have a sufficient undertaking of its own to benefit from examinership. It nevertheless allowed it protection as a related company, citing the companies’ financial and property connections and the possibility that MOPB’s insolvency could obstruct CTL’s rescue. The judge noted the interim examiner’s undertaking to return to court promptly if MOPB should no longer receive protection.
The judgment identified shortcomings in the evidence, including a six-month gap in CTL’s financial information and deficiencies in the independent expert’s reports. The judge said the material was not entirely satisfactory but, considered alongside further reports and evidence at the hearing, was sufficient to assess the companies’ prospects. He also considered the disputed hotel leases and the substantial corporation tax liability, which Revenue said it had learned of when served with the petition. He concluded that these matters did not justify refusing the petition.
The judge said examinership offered a better prospect for creditors than liquidation and took account of CTL’s 122 employees and its importance to the local economy. The order confirmed Wallace as examiner; the judgment did not decide the disputed lease rights or the merits of Killeen’s separate litigation.