Court orders winding-up of Irish Parmalat subsidiary

AN order for the winding-up of a “hopelessly insolvent” Irish company which is a wholly-owned subsidiary of beleaguered Italian food group Parmalat SPA was made by the High Court yesterday.

Much of the case centred on whether the insolvency proceedings should be conducted in this jurisdiction or in Italy.

Mr Justice Peter Kelly, in a reserved judgment, said he was satisfied the presentation here of a petition for the winding-up of Eurofood IFSC Ltd and the appointment of a provisional liquidator to it on January 27 last brought about the opening of main insolvency proceedings and that the “centre of main interests” of the company was and is within this State.

The judge said he was satisfied that Eurofood was grossly insolvent and its creditors were entitled to have it wound up in accordance with the legislation in force in this State. They were not required to participate in a procedure under Italian law which manifestly was not a winding-up but a form of reorganisation.

The winding-up petition was brought by Bank of America NA which is owed some e3.9 million by Eurofood IFSC. Pearse Farrell, who was appointed provisional liquidator in January, was appointed liquidator yesterday.

Eurofood was incorporated here in November 1997. Its principal business activity was providing financial facilities for companies in the Parmalat group. It was subject to supervision by the Department of Finance, the Revenue authorities and the Central Bank of Ireland, said Mr Justice Kelly. The tax benefits enjoyed by Eurofood were conditional on it being operated here.

Until November 12 last, it had four directors, two Irish and two Italian. On that date one Italian director resigned and the second resigned on January 20 last. Virtually all Eurofood’s assets are represented by debts due by Parmalat companies or were guaranteed by the ultimate Parmalat parent and were of little value.

On February 9 last, Enrico Bondi was appointed extraordinary administrator of Eurofood by the Italian Ministry for Productive Activities. This appointment, said Mr Justice Kelly, was made notwithstanding knowledge on Signor Bondi’s part that the High Court here had appointed a provisional liquidator.

A Parma court admitted Eurofood into insolvency and found its centre of main interests was in Italy rather than Ireland. In light of the appointment of the provisional liquidator here it was said Signor Bondi ought not to have sought the order in Parma and ought to have given third party creditors a chance to be heard.

Mr Justice Kelly said his task was to decide whether or not to wind up Eurofood here in the context of this being the main insolvency proceeding which ante-dated by some weeks the application to and order of the Parma court.