The High Court refused Staunton Foods Limited’s application to submit a late compensation claim in Millstream Recycling Limited’s scheme of arrangement proceedings, ruling that it had no jurisdiction to extend the deadline set by the scheme.
In a judgment delivered on 26 March 2010, Miss Justice Laffoy said the court’s role under section 201(1) of the Companies Act 1963 had ended when it ordered creditor meetings in December 2009. The claim deadline was set by the scheme itself, not by a court order, so Order 122, rule 7 of the Rules of the Superior Courts did not give the court power to extend it. The application was refused.
Staunton Foods, a meat processor operating a facility in Bandon, County Cork, said it had suffered losses following the 2008 pig feed contamination crisis. Its director, Peadar Murphy, said the losses included recalled products, lost markets and profits, and the cost of a bridging loan. He put uncompensated losses at more than €1.5 million. He also said the company had received three government compensation payments totalling almost €1.9 million and had another claim pending.
Murphy said Staunton had intended to take legal action since December 2009 but learned of the scheme only on 23 February 2010. The Scheme Manager then told the company it could not entertain the claim without court leave. Murphy said Staunton had not seen the advertisements about the scheme and argued it should have been treated as a contingent creditor and notified under section 202.
Millstream director Robert Hogg said the company had no dealings with Staunton and did not know of any claim. Scheme Manager Jim Luby’s affidavit stated that advertisements had been placed in newspapers and Iris Oifigiúil in November 2009 and January 2010. The January notices told creditors to submit prescribed forms by 12 February 2010. Luby said creditors known to or notifying the company by that date received information packs, and claims totalling €110 million had been submitted by the deadline. The Scheme Manager first learned of Staunton’s claim through solicitors’ correspondence dated 23 February.
The judgment did not decide whether Staunton could pursue other issues later. Laffoy said the judgment should not be read as precluding arguments if creditors approved the scheme and it returned to court for sanction. She also said her reference to the January advertisement was not implicit approval of its statement that a creditor failing to submit a claim would be deemed to have waived it.