The High Court placed Bookfinders Limited under its protection and appointed Michael McAteer as examiner, finding evidence that the company had a reasonable prospect of surviving as a going concern. The decision followed the court’s finding that the petitioners had breached statutory disclosure duties when seeking examinership protection.
The petition was presented on 13 November 2015, two days after KBC Bank Ireland appointed a receiver over the company’s assets. The bank opposed the petition, arguing that material information had been omitted and that the evidence did not establish a reasonable prospect of survival.
The court found that the petitioners should have disclosed that their personal guarantees had been called in for about €3.6 million, that the bank had crystallised its floating charge and appointed a receiver over the company’s undertaking, and that two valuations of the secured Letterkenny property existed. The court also found that rent arrears and rates owed to Donegal County Council should have been disclosed to the independent expert. It said the petitioners should not have invited reliance on KPMG projections they themselves considered inaccurate and misleading.
The independent expert’s report was later amended. The stated excess of liabilities over assets rose from €2,280,206 to €3,252,977, and the expert changed the conditions he had identified for the company’s survival. The court said the changes and the lack of explanation raised questions about the report’s reliability. It also said it could not conclude, without further information, that the inaccurate figures had been knowingly withheld.
The judge held that the omissions breached section 518 of the Companies Act 2014, giving the court power to decline to hear the petition. However, she refused the bank’s request to do so, finding that dismissal would be disproportionate and could imperil the jobs of 49 employees who were not responsible for the breaches.
On survival prospects, the court gave weight to interim examiner McAteer’s report. He considered the necessary conditions achievable, citing support from customers, staff, creditors and suppliers, and a written expression of investment interest from a company related to the directors. The judge found his assessment persuasive and independent, and said the examinership process offered the best prospect of saving some or all of the jobs.
The ruling placed Bookfinders under High Court protection and appointed McAteer as examiner. It did not dismiss the petition or determine the eventual outcome of the examinership.