The High Court extended the deadline for the examiner of JP Transpeed Express Portlaoise Limited to report on proposals for a compromise or scheme of arrangement. The extension runs to 27 November 2014. The court did not approve any proposals or decide the company’s outstanding tax liabilities.
The examiner, appointed on 25 September 2014, sought more time because he was not yet in a position to put proposals to the company’s members or creditors and report on their outcome. The statutory 35-day period ended on 29 October. The application was opposed by the Revenue Commissioners, who pointed to tax liabilities substantially above the company’s initial estimates.
The company’s examinership petition had stated that it owed at least £147,454.31 to Revenue and estimated that a further €100,000 might be due, subject to investigation. Correspondence from the examiner later put the additional tax liability at about €412,000, apparently excluding interest and penalties. An audit was continuing, and the judgment noted that further liabilities might be identified.
Revenue argued that the under-estimate breached the statutory duty of utmost good faith and undermined the court’s ability to make further orders. The judge rejected those arguments on the material before him. He said the petition had disclosed that the figures were estimates and would require investigation, and found no basis to conclude, on the available facts, that the company or independent accountant had breached that duty. He also found no evidence that the court had been misled by the accountant’s report.
A liquidator for creditor Protim Abrasives Limited raised allegations about the company’s motives, tax position, a disputed lien over Protim goods, and the reliability of the accountant’s report. The judge treated those matters as allegations and did not determine the pending dispute over the lien or reach a conclusion about whether tax avoidance had occurred. He said it was too early to reach such a conclusion on the information before him.
In granting the extension, the court considered creditors’ interests and the potential effect on Transpeed employees if the examinership failed. It noted the examiner’s evidence that a winding-up would put jobs at risk. The order was limited to extra time for the examiner to meet his statutory obligations. The court expressly preserved Revenue’s and other creditors’ ability to object if proposals later came before the court for approval, including on grounds of tax avoidance or unfair prejudice.