The High Court refused to appoint an examiner to waste collection company Mr. Binman and four related companies, finding it could not be satisfied there was a reasonable prospect that the company or any part of its undertaking would survive as a going concern.
In a judgment delivered on 2 November 2011, Ms Justice Finlay Geoghegan gave reasons for a decision she had made on 27 October. The petition sought the appointment of William O’Riordan as examiner under the Companies (Amendment) Act 1990. The court had first appointed him interim examiner on 12 October.
The judge found that the petition had been validly authorised and that the statutory requirements had been met. But those findings did not establish the separate survival condition required for the court to appoint an examiner. The judge said that without that condition, the court had no jurisdiction to appoint one and could not consider discretionary matters, including the legislation’s employment-protection purpose.
The group, which operated mainly in waste collection and recycling across Munster and Galway, employed about 331 full-time staff and 10 independent contractors, the judgment said. Bank of Scotland opposed the petition. It was owed about €53 million by the group and held extensive security over the companies and the Sheahan family. The Revenue Commissioners took a position of guarded neutrality; Limerick County Council supported the petition, citing concern for regional jobs.
The judge identified high bank debt, a lack of funding for necessary capital expenditure and pressure on revenue from the economic downturn and competition as causes of the group’s financial difficulties. She also considered the retention of about €1 million in VAT and payroll taxes collected in 2010. The judgment records that the shortfall was not disputed and that most of the amount remained unpaid.
The independent accountant’s survival opinion depended on conditions including new investment, restructuring liabilities, continued regulatory approvals and an agreement with the Bank to reduce rent on land used by the business. The judge accepted that interim-period cash-flow projections had some likelihood of being met, but noted they assumed no interest or principal repayments on bank and lease debts. The Bank said it would not renegotiate the facilities, and the court had no evidence of alternative banking facilities or the Bank’s agreement to reduce rent.
The court also considered separate proceedings brought by Clean (Irl.) Refuse and Recycling Co. Ltd. concerning alleged unauthorised development at the Luddenmore site. It made no finding on those proceedings, which were still pending, but said they could not be ignored and had not been assessed by the independent accountant.
Taking the matters together, the court concluded that the required reasonable prospect of survival had not been established. The judgment gives reasons for refusing the examiner appointment; it does not decide the merits of the separate planning proceedings.