The High Court has restricted Fergus Applebe from acting as a director or secretary of a company for five years unless that company meets capital requirements under the Companies Act. The court made no restriction order against fellow director Brendan O’Brien.
In a judgment delivered on 29 July 2020, Mr Justice Quinn considered the liquidator’s applications concerning Alvonway Investments Limited, which owned Wilton Shopping Centre in Cork and was in liquidation. The applications sought a restriction order against O’Brien and Applebe. The judgment also records that Joseph O’Donovan had consented to a restriction order in lieu of disqualification; the judge was deciding only the applications against the other two directors.
The liquidator’s main concern was that two payments were made from Alvonway’s account on 27 August 2013, without NAMA’s prior knowledge or approval: €300,000 to accountants McCarthy McSweeney and €150,032 to O’Donovan. The liquidator said the company was hopelessly insolvent at the time and argued that O’Brien and Applebe should have ensured controls were in place to prevent the payments. Neither director was accused of dishonesty, and both said they had no knowledge of or involvement in the transactions.
The judge found that O’Brien had shown sufficient knowledge and understanding of the company’s business, its strategy and the constraints under which it operated. O’Brien had cooperated with the statutory receiver and prepared a statement of affairs for it. Although he failed to return the liquidator’s questionnaire, the judge did not consider that failure enough to justify a restriction order. The court concluded that O’Brien had acted honestly and responsibly and that there was no other reason to restrict him.
Applebe had served as a director from the company’s early days until its liquidation and held a 3.75% shareholding. He said he had been excluded from dealings with NAMA and lacked meaningful information about the company. The judge held that his account did not show steps he had taken to keep informed or supervise the company’s affairs. The court said directors’ responsibilities were not removed by a passive role or by NAMA’s oversight and conditions on support.
The judge concluded Applebe had not satisfied the court that he acted responsibly. The five-year restriction order permits him to act only where the company meets the requirements in section 819(3).