The High Court has ordered Marcon Developments to be wound up under court supervision and appointed Pearse Farrell as its official liquidator, replacing the creditors’ voluntary winding-up led by Kieran Wallace. The order followed a petition by John Sisk & Company Limited, which had obtained a €2.096 million judgment against the company.
The judgment, delivered by Miss Justice Laffoy on 12 October 2010, records that Sisk’s petition was presented on 27 August. The company began a creditors’ voluntary winding-up after the petition was served. At a creditors’ meeting on 20 September, Wallace was appointed liquidator, despite Sisk’s request that creditors nominate Farrell. Sisk accepted that the voluntary process and Wallace’s appointment were regular, but sought a court-supervised liquidation.
The court found the company was “hopelessly insolvent” and that the likely shortfall for unsecured creditors was almost €20 million, potentially more if two creditors were entitled to a €238,420 deposit held by solicitors. The company’s statement of affairs listed debts of €10.9 million to unsecured creditors, while the judgment identified omissions and uncertainties in the figures. The judge said the available evidence raised questions about how company assets had been handled and required investigation; she did not determine that wrongdoing had occurred.
Among the matters requiring examination were €9 million previously held in the company’s Ulster Bank account and later set off by the bank, debts attributed to three companies connected with the Ballybrit development, and changes to the company’s shareholding and status in 2007. The judge also noted concerns about the company’s financial statements and the resignation of its former auditors, while saying the auditor issue alone could not be assessed as a material factor on the evidence before her.
Sisk undertook to pay the liquidation costs without seeking repayment from any assets recovered for the company. The judge considered that undertaking beneficial to creditors, alongside the scale and complexity of the investigations and the need for court supervision. She also said the order would not duplicate work already done by Wallace.
The court ordered Marcon Developments wound up and appointed Farrell as official liquidator. It directed that costs incurred in the voluntary winding-up be treated as costs of the liquidation and that Sisk pay Wallace’s costs for his work to date. Wallace may apply to have those costs measured by the court.