The High Court dismissed a petition seeking the appointment of an examiner to Ina’s Kitchen Desserts Limited, finding the company was likely to be unable to pay its debts but that court protection was not justified on the evidence presented.
Mr Justice Quinn delivered the judgment on 9 December 2020. The petition was brought by Barry Broderick, who held 10.45% of the company’s ordinary shares and remained a director. He said the company faced serious financial difficulties and had a reasonable prospect of survival if restructured under examinership. The company and its majority shareholder, Starkane Limited, opposed the petition.
The court found that the company met the statutory threshold for examinership. In particular, it concluded the company was likely to be unable to pay its debts in early 2021 if expected new funding from Starkane or Enterprise Ireland did not arrive. It also found the company’s balance sheet position satisfied the statutory test when the obligations attached to Starkane’s preference shares were treated as liabilities.
The judge did not find that the company had improperly claimed €599,000 under the Temporary Wage Subsidy Scheme. Broderick alleged the company had manipulated sales timing and accounting periods to qualify. The company denied this, and Revenue said the matter was under review. The court said that review did not justify adjusting the company’s financial position for the examinership application.
The court also considered the company’s cash position, creditor views and prospective funding. Starkane had stated it would provide €650,000 before 21 December 2020 and a further €500,000 in 2021, but said its investment intentions were on the basis that no examiner was appointed. The court accepted evidence from the company’s chief executive and Starkane’s director about the proposed funding. Enterprise Ireland was said to have made a €650,000 offer, but the offer letter was not before the court, so the judge limited the weight given to that evidence.
No creditor supported the petition, and no creditor had threatened enforcement action. The court considered that the petitioner’s concerns about Starkane’s investment terms and the family’s shareholding disputes were not appropriately resolved through examinership; separate remedies could be pursued if warranted. It also took into account that Broderick had not raised a formal insolvency process with the board before filing the petition.
The dismissal was based on the evidence and circumstances at the hearing. The judge said this did not rule out the possibility that the need for court protection could arise later. The judgment did not determine whether the company’s directors’ conduct was proper or whether its TWSS claim was valid.