The High Court has adjourned an application concerning a €12.2 million debt claim in the liquidation of Doonbeg Investment Holding Company Limited, directing the liquidator to notify creditors who had not previously received the application papers before the court decides whether to admit the claim.
In a preliminary judgment delivered on 2 June 2021, Ms Justice Butler said the court was not satisfied that determining the question in the existing circumstances would be just. The court did not rule on whether the debt was owed or should be admitted to proof.
The application was brought under section 631 of the Companies Act 2014 by Tom Kavanagh, the company’s liquidator. Alfred Giuliano, trustee in bankruptcy of Kiawah Doonbeg LLC, claims Kiawah was owed €12,214,524 when it entered bankruptcy. A larger claim previously made on behalf of KRA Doonbeg LLC is no longer being pursued.
The company was a holding company for Irish subsidiaries that developed, owned and operated a golf course and hotel at Doonbeg, County Clare. The liquidator has provisionally admitted 15 other creditors’ claims totalling about €7.75 million. The company had €1,528,090 available for distribution. The judgment said admitting Kiawah’s claim could reduce the expected return to those creditors from about 20% to 7% of the amounts owed.
The liquidator had taken a neutral position on whether Kiawah’s claim should be admitted. The judgment outlined unresolved questions about which companies advanced funds, whether money went to the holding company or directly to subsidiaries, and whether advances were loans or capital. The court did not determine those questions or assess the claim’s merits.
The application papers had been sent to Kiawah’s trustee and eight other creditors, but seven creditors had not been served. The judge said only some potentially affected creditors had been notified and no opposing party was before the court to test the trustee’s arguments. She declined to appoint a creditor to oppose the claim, citing the expense in the context of the liquidation.
The liquidator was directed to provide the unserved creditors with the full application papers, explain that the matter had been partly heard and adjourned, and give them a timeframe to seek to participate. If none wishes to be heard, the court will decide the application on the submissions already made. If a creditor comes forward, the matter will first be relisted for directions. The debt claim remains undecided.