The High Court ordered Star Elm Frames Limited to be wound up under court supervision, appointed Miles Kirby as liquidator and removed Anthony J. Fitzpatrick from the role. Mr Justice Richard Humphreys made the order on 10 August 2016 and delivered his reasons on 3 October.
The petition was brought by the Revenue Commissioners, who said the company could not pay its debts. The court extended the time for service of the verifying affidavit and found that the company’s admitted inability to pay its debts established the statutory basis for a winding-up order, even if the amount in the original demand was disputed or incorrect.
The Revenue’s March demand sought €585,523.35. At the hearing, it said €295,136 remained unpaid from the examinership, with a further €271,794 returned since then. It also identified about €38,000 in P30 liabilities and estimated €81,962 in VAT. The judge said the total due would exceed the demand in any event.
The company had entered a creditors’ voluntary winding up and its creditors had approved Fitzpatrick as liquidator. The judge nevertheless found that the factors favouring court supervision outweighed those against it. These included allegations of misconduct and that the court had been misled during the examinership, a disputed creditors’ meeting, the timing of the voluntary winding up, and a rental agreement with director David Sage the day after the company stopped trading. The Revenue characterised that arrangement as a transfer of business and a “phoenix operation”; the judgment treated this as an allegation and said the agreement appeared to provide some evidence for it.
The judge also cited concerns about Fitzpatrick’s handling of the matter, including that he had not promptly disclosed the rental agreement to the Revenue or court. The court considered that a new liquidator would be better placed to investigate the company’s affairs. It ordered Kirby’s appointment without deciding that “cause” was required to remove Fitzpatrick; the judge said the appointment displaced the existing liquidator. He added that, if cause were required, the factors set out in the judgment would be sufficient.
Fitzpatrick and the company were ordered jointly and severally to pay the petitioner’s costs. Fitzpatrick was directed to transfer the company’s books, records, accounts and property to Kirby by 15 August 2016. The directors and Sage were ordered to make a statement of affairs. The court refused a stay of both the winding-up and costs orders.