The High Court has refused to appoint an examiner to Missford Limited, which trades as the Residence Members Club, dismissing the company’s petition and withdrawing the court’s protection. Mr Justice Kelly directed the registrar to send the judgment and relevant court papers to the Director of Corporate Enforcement for consideration.
The company sought examinership under the Companies (Amendment) Act 1990, saying it hoped to secure a scheme of arrangement that would allow it to continue trading profitably. The judge said the company had never made a net profit and had operated at a loss since trading began in May 2008. By the end of November 2009, its losses for that year were €678,342.
The judgment records a €1.2 million debt to the Revenue Commissioners following incorrect tax returns, including VAT and PAYE/PRSI deductions that were not forwarded. The company also owed Zurich Bank €2.3 million and trade creditors €743,553. The Revenue Commissioners attached the company’s bank account in December 2009 after an audit and an unpaid assessment. That attachment prompted the examinership application, the judge said.
The company’s independent accountant and interim examiner considered that it had a reasonable prospect of survival as a going concern. The judge was sceptical of the management-prepared forecasts and the evidence about potential investors, but said he had little option but to accept the survival evidence because it was unopposed. He found that this met the statutory threshold for the court to have power to appoint an examiner; it did not require the court to make the appointment.
The judge’s central concern was that the company’s dealings with related companies Mayfair Properties Limited and Auldcarn Limited, and the directors’ conduct more broadly, warranted proper investigation. The accountant had been unable to quantify the balance owed by Mayfair and identified a €113,105 balance with Auldcarn. In oral evidence, he accepted that further examination was needed. The judge concluded that a full investigation, and any proceedings that might follow under section 297A, could not be completed within the limited examinership period. He said an examinership could allow the company to continue while avoiding that investigation.
The judge also considered the likely effect on employees and creditors. He said a receiver or liquidator could keep the business operating for a short period while expressions of interest were considered. The petition was dismissed, the protection of the court withdrawn, and the papers referred to the Director of Corporate Enforcement for consideration.