The High Court confirmed the appointment of an examiner to Mainline Power Limited, finding that the company had a reasonable prospect of survival as a going concern. It also directed the examiner to investigate transactions involving settlement money from a Swedish wind-farm dispute and report on the company’s co-operation.
Mr Justice Rory Mulcahy delivered the judgment on 16 July 2024. The application concerned confirmation of an interim appointment made on 17 June. VTG Entrepenad AB opposed examinership and asked the court to wind up the company. Structive Civil Engineering Limited and the Revenue Commissioners took neutral positions.
Mainline Power provides engineering services in the energy and aviation sectors and has 83 employees, the judgment said. It had been loss-making and balance-sheet insolvent since at least 2020, but had been supported by group companies. The court noted that saving as many as 55 jobs weighed in favour of examinership.
VTG’s opposition focused on a €6.8 million arbitral award made in its favour against Mainline Power and its Swedish subsidiary, Mainline Power Nordic AB, on 27 May 2024. The award followed a dispute over work on a Swedish wind farm. The High Court had recognised and enforced the award on 11 July, entering judgment against Mainline Power for approximately €6 million.
VTG alleged that the transfer of most of a €5 million settlement paid by the project’s main contractor, Nordex, from the Swedish subsidiary to another group company was intended to frustrate recovery of an anticipated arbitration award. It also questioned the company’s failure to provide financial projections and legal advice it said informed the transfer. The company disputed VTG’s allegations and said it believed it had a strong case in the arbitration.
The judge said the transfer raised serious questions and merited further investigation, but found that misconduct had not been established at this stage. He said it would be improper to reach a firm conclusion about the transaction in this application, where the company’s evidence had not been tested in cross-examination. He also declined to order production of documents said to record oral legal advice, and found the projections were not essential to deciding whether the company met the survival threshold.
The court relied on the positive assessments of the independent expert and interim examiner, including the interim examiner’s report on the company’s trading position and potential contracts. The examiner had reported 19 expressions of interest in investment. The judge concluded that the statutory criteria were met, subject to conditions for survival, and that VTG’s concerns did not justify refusing the appointment.
The examiner was directed to carry out the investigation steps set out in his second report and provide a separate report on progress, including the degree of co-operation from the company and its directors. The court said it would hear the parties on any further orders required.