The High Court has ordered Kilcurrane Business Centre Ltd to be wound up after finding it owed former director Henk Offereins €195,490 and had not advanced its defence to his petition in good faith.
In a judgment delivered on 10 November 2021, Ms Justice Butler granted the petition under section 569(1)(d) of the Companies Act 2014, finding the company was deemed unable to pay its debts after it did not satisfy a statutory demand. She also ordered winding up on the alternative ground that it was just and equitable to do so.
Offereins had personally guaranteed a €150,000 bank loan taken out by the company in 2006 to complete a veterinary clinic at Gortamullen Business Park in Kenmare. He made the repayments. The company’s accounts had recorded those payments as a director’s loan repayable to him, although the company later disputed that it owed him money. It argued that the repayments were his personal liability, and alternatively that the debt had been transferred to its Dutch parent, Bibesco Beheer BV, and set off against money it said Offereins owed Bibesco.
The judge found the bank loan was made to the company for work on its property, and that the company’s accounting treatment, subsequent correction of an attribution error and the attempted transfer and set-off supported the conclusion that the repayments were a loan to the company. In the absence of evidence of different repayment terms, she found it was repayable on demand. Offereins had sought repayment in October 2019, formally demanded it in January 2020, and served the statutory demand in February 2020, allowing the company a reasonable time to pay.
The company’s accounts showed total debts of €456,517 in 2019, while the clinic property was valued at about €220,000. The court found the company was in fact insolvent. Although other creditors opposed winding up, the judge noted that the principal opposing creditors were the parent company and a shareholder in it, rather than ordinary trading creditors.
The judge accepted that the dispute over how the debt arose could meet the threshold of substantial grounds, but found the defence was not advanced in good faith. The company had not disputed the debt before the petition, despite earlier correspondence, and had purported to transfer its liability to Bibesco without Offereins’ notice or consent, after the statutory demand. The judge described that transfer as an attempt to avoid potential liability.
Separately, the court found the parties’ business relationship had broken down after an anticipated 50% shareholding for Offereins never materialised. The attempted transfer of the debt outside Ireland further supported winding up as just and equitable. The judgment orders the company wound up on both grounds; it does not determine the separate proceedings concerning the lease, partnership agreement and related arrangements, which were at an early stage.