The High Court set aside an interim order protecting Merrow Ltd from creditors after finding that an email about the return of company documents had not been disclosed when the order was sought.
Mr Justice Hogan said the omission was a bona fide error made during a hurried application, and that no personal blame attached to the company or its advisers. But the email was objectively relevant and highly material to the court’s decision under section 3A of the Companies (Amendment) Act 1990, so the interim protection could not stand.
The email, sent by the Bank of Scotland’s solicitor on the afternoon of Sunday, 24 March 2013, said the former receiver would return company documentation. Merrow had argued that the receiver’s failure to hand over documents was an exceptional circumstance preventing an independent accountant’s report from accompanying its petition. The judge said there remained a dispute about which documents should be returned, but the receiver’s willingness to comply with court orders could not properly be doubted.
The court had granted Merrow protection late that Sunday, pending delivery of the accountant’s report, and limited the order to 2pm the following day. The report was prepared on 25 March, and Merrow sought no further relief under section 3A. The judge said the issue had therefore been overtaken by events. He did not decide whether a non-trading holding company such as Merrow could qualify for examinership.
The ruling also concerned Belohn Ltd, which operates Foley’s Bar and Restaurant on Merrion Row, Dublin. The Bank sought to discharge an ex parte order appointing an interim examiner. Mr Justice Hogan rejected challenges based on the late filing of the examiner’s written consent and the restaurant’s temporary closure while insurance cover was arranged. He found the consent omission technical and without prejudice, and said the trading pause did not show a lack of candour.
He upheld the interim examiner appointment in Belohn, citing the unusual circumstances after a receiver had been in control for about six months before that appointment was held invalid by Mr Justice Gilligan. An independent report would assist the court and interested parties, the judge said. He stressed that this did not determine whether an examiner would be appointed at the full hearing, where the petitioners would have to satisfy the court afresh and interested parties would be heard.
The judge also found that Merrow had been allowed no more than 45 minutes to repay about €1.068 million after a demand delivered outside banking hours. He described that period as neither realistic nor reasonable. The statutory three-day period to petition after a receiver’s appointment nevertheless included the appointment day and weekends; on the dates in this case, it expired on Sunday, 24 March.