The High Court has restricted John Blaney and Neil Blaney from acting as company directors or secretaries, or taking part in forming or promoting a company, for five years unless it meets the capital requirements in section 819(3) of the Companies Act 2014.
In a judgment delivered on 21 January 2022, Mr Justice Quinn found that the two men had cooperated with the liquidator of Inch View Limited as far as could reasonably be expected. But he was not satisfied that they had acted responsibly in the company’s affairs before it went into liquidation. The court said the statutory restriction therefore had to be made.
Inch View operated The Water’s Edge restaurant in Rathmullen, Co Donegal. It stopped trading in September 2013 and was wound up by court order on 27 July 2015, following a petition by the Revenue Commissioners. Sean Mulhern was appointed liquidator.
The judgment records that the company had accumulated losses of €523,789 by 2010, which increased in later years. Its statement of affairs estimated liabilities of €975,880. The court considered failures to file annual returns and comply with tax obligations, as well as a loan balance recorded as due from the Blaney Property Partnership. It found the loan had not been repaid and that the breach of section 239 evidenced a lack of responsibility.
The directors said they had hoped the business would recover and had tried to restructure its finances. The court found there was no evidence of what steps they took to protect creditors. It also noted that a restructuring professional was retained in December 2013, after the company had stopped trading, and that no steps were taken to begin an orderly winding up before Revenue petitioned the court.
The judge rejected John Blaney’s position that only events after his formal appointment as a director on 31 July 2013 were relevant. The judgment referred to company accounts he had signed as a director in 2010 and 2012, and to his evidence about the company’s earlier finances. Neil Blaney’s counsel had accepted that he was a de facto director for several years before his formal appointment.
John Blaney’s counsel submitted that the restriction could cost him his postmaster appointment and harm his livelihood. The court said that issue had not been established in evidence in this application. It noted that relief might be sought separately under section 822, but made no finding on whether such an application would succeed.
The order restricts both respondents for five years on the terms set out in section 819(3).