The High Court has ordered the winding up of M.U.T. 103 Limited after finding it was insolvent and owed investor Kathleen Dineen €135,890. Mr Justice Brian O’Moore made the order on 10 March 2021, rejecting the company’s request to dismiss the petition or adjourn it for investor meetings. He said he would hear further submissions before making consequential orders.
Ms Dineen invested €127,000 with the company in February 2017. The investment was to be on-lent to German Property Group GmbH (GPG), and the capital and final interest payment fell due in February 2020. The company did not pay. It did not dispute the debt or that it could not pay sums owed to her.
The court heard that GPG had stopped payments to the Irish investment vehicles in late 2019 and entered insolvency proceedings in Germany in 2020. The company and its administrator, Wealth Options Trustees Limited (WOTL), had repeatedly told brokers that investor funds were secured against GPG assets. But an options paper prepared by Dentons and circulated on 5 March 2021 described uncertainty: it identified property at Zehdenick as the only asset charged in favour of M.U.T. 103, said steps might still be needed to complete the land charge documentation, and recorded that GPG’s insolvency administrator considered the loan claims subordinated and the securities potentially challengeable. The judge said he could not assess whether that challenge had merit.
The company argued that winding up should be delayed so WOTL could hold meetings and present options to investors. The judge found no credible basis to dismiss the petition and no reason to adjourn it. A liquidator could seek investors’ views and would have the benefit of Dentons’ analysis, he said. No other investor appeared to support the company’s position.
The judge also noted that WOTL had not committed to continuing its work for investors beyond organising the proposed meetings. He said placing the company under a court-supervised liquidator would be preferable for enforcing the security and responding to any challenge, given the uncertainty described in the options paper. He expressly proceeded on the basis that the directors had no moral or legal culpability for potential problems with the security.
The order winds up M.U.T. 103 Limited. The judgment did not determine whether the security challenge would succeed or make the consequential orders, which were left for further submissions.