The High Court has dismissed Balark Investments Limited’s petition to replace the liquidator appointed by creditors of Chambury Investments Company Limited, finding that the concerns raised did not justify a court-supervised liquidation on the evidence presented.
In an ex tempore judgment delivered on 21 September 2018, Mr Justice McDonald said the existing liquidator, Miles Kirby, had committed to investigating the matters raised by Balark. The judge said Balark could also fund further inquiries and apply to the court under section 631 of the Companies Act 2014 if it had concerns about how the liquidation was handled.
Balark brought the petition as a creditor, relying on costs orders made in earlier litigation. That litigation concerned Balark’s attempt to acquire the company’s freehold interests in Plots 3 and 5 beside Sir John Rogerson’s Quay. Balark succeeded in the earlier proceedings, and the High Court set the prices for those interests at €30,000 and €10,000 respectively. The amount of costs owed to Balark remained unascertained.
At a creditors’ meeting on 11 June 2018, the company’s director chaired the meeting and accepted claims for voting purposes. Kirby was appointed liquidator after creditors including Castle Cove, a company controlled by the Ronan interests, voted for him. Balark challenged the appointment and sought a winding-up order on just and equitable grounds and on the basis that the company could not pay its debts as they fell due.
Balark argued that the company’s transfer of Plot 7 to another company controlled by the Ronan interests for €70,000 in December 2017, and the subsequent use of the proceeds for legal fees, required independent investigation. It also raised concerns about the company’s litigation spending, a possible role for Mr Ronan Senior as a shadow director, and how the creditors’ meeting had assessed claims.
The judge said there was no evidence before him that Plot 7 had been sold at an undervalue. He noted that Balark had stated the plot would have a value similar to Plots 3 and 5, whose combined value was set at €40,000. He said the transfer and use of its proceeds should still be investigated, but found that Balark had not shown, as a creditor, that the transfer caused it loss or raised an issue serious enough to warrant intervention.
He also found insufficient evidence that the company had recklessly pursued its appeals or that the chairman had manipulated the creditors’ votes. The judge said the inquiries into the litigation and transfer appeared relatively straightforward, and accepted Kirby’s commitment to carry them out. The petition was dismissed.