The High Court has allowed Blackbee Investments Limited, which is in liquidation, to replace Tom Finneran as petitioner in winding-up proceedings against City Quarter Capital II plc. The court has not decided whether the company should be wound up.
Mr Justice Rory Mulcahy ruled on 30 August 2024 that the interests of justice favoured substitution. He will hear the parties on the terms of the substitution and outstanding matters, including costs, on 10 October 2024.
Mr Finneran presented the petition on 28 May 2024, claiming that €300,000 was owed to him and his wife and remained unpaid after statutory demands. The company disputed that he was its creditor, arguing that his dealings were with Blackbee Alternatives Limited, which arranged the investment. The company also contended that any money owed had not yet fallen due.
The investment was made in March 2021 under a two-year arrangement with a target return of 6% a year. The investment memorandum described City Quarter as the bond issuer and Blackbee Alternatives as the arranger. The company said the assets supporting investments were to be sold by the end of 2024, with money to be returned to investors. The judgment records no finding that the investment had failed or that the company was insolvent.
The court said the creditor question was disputed in affidavit evidence and could not be resolved without cross-examination. It did not decide whether Mr Finneran was a creditor. The judge found that his affidavit and the company’s lack of a substantive response to the statutory demand provided a prima facie basis for his claimed standing. The company had not established that the original petition was an abuse of process or bound to fail.
The joint liquidators said Blackbee wanted access to City Quarter’s books and records, which they said had been denied during Blackbee’s liquidation. The judge found the evidence did not show that substitution was oppressive or a debt-collection device. Whether Blackbee can establish grounds to wind up City Quarter will be decided at the petition hearing.
The order changes the petitioner only. The court has yet to determine the winding-up petition, the parties’ disputed creditor claims, the terms of substitution or costs.