The High Court dismissed Rationel Vindeur Limited’s challenge to the appointment of Michael Butler as liquidator of Centrum Products Limited, which was in voluntary liquidation. Miss Justice Laffoy ruled on 15 December 2009 that the evidence supported the creditors’ vote for Butler. The court treated the application as an appeal about creditor proofs admitted for voting, not as a broader inquiry into the company’s affairs.
Centrum’s members resolved on 29 October 2009 to wind up the company voluntarily and nominated Butler as liquidator. At the creditors’ meeting, Rationel Vindeur proposed Ciaran Kirk. Creditors cast votes worth €245,918 for Butler and €139,183.73 for Kirk. Rationel Vindeur argued that claims by the company’s sole members and directors, Anthony and Cindy Reynolds, had been wrongly counted and that the majority in value supported Kirk. It also sought Butler’s removal and, alternatively, proposed that Kirk serve jointly with him.
The court examined whether the company owed the amounts claimed by the Reynolds. It accepted for the purposes of the appeal that more than €155,000 was due to Anthony Reynolds, including vouched cash and expenses, net undrawn wages and rent. The court also accepted the explanation that Cindy Reynolds’s €20,000 wage claim related to 2007. Along with €12,206 owed to the company’s former auditors, Swan O’Sullivan, those debts exceeded Rationel Vindeur’s claim.
Laffoy held that the court’s role under Order 74, rule 71 was limited to deciding whether the chairman had correctly admitted or rejected proofs for voting, based on whether the debt was established on the balance of the evidence. It could not use that appeal to weigh broader concerns about creditor conduct, including allegations of reckless trading or fraudulent preference. The court said those matters could be pursued through mechanisms available during the winding up.
The judge concluded that the majority in value had voted for Butler and that he had been properly appointed. The application was dismissed. A committee of inspection had been appointed at the creditors’ meeting, with Rationel Vindeur’s Gavin Connery as a member.