However, its directors told the High Court this week that it intends to apply on May 11 for court approval to continue in provisional liquidation and to try and trade its way out of difficulties under this protection. The Bandon-based firm has current projects in Cork, Kerry and Carlow.
High Court judge Justice Mary Laffoy approved the appointment of accountant Michael McAteer, of Grant Thornton, a specialist in recovery and reorganisation, as provisional liquidator. According to Mr McAteer, the alternative of examinership, with its limited 100 days of court protection, won’t suit troubled building firms; a continuing renewed provisional liquidation could let firms such as Coolfadda trade out of trouble. “If it is successful, I’d see other building firms use the same protection.”
The High Court affidavit shows four Irish banks — AIB, Bank of Ireland, Bank of Scotland, and ACC — are owed e32m by Coolfadda (CDL), with over e19m owed to Allied Irish Banks. Trade creditors are owed e3.8m.
Admitting insolvency due to market and economic conditions, Coolfadda’s difficulties came to a head when Cygnum Timber Frame Ltd sought an order for e550,000. Coolfadda claims a current contracted income stream of e17.5m, and it is due e9.4m from debtors. Director Conor Slattery last night said they had assets previously valued (at cost price) at up to e42m. They now hope to be able to finish houses for contracted buyers, and to use money from those sales and schemes to allow them pay new loans and debts. They’d then address historic current debts.
Coolfadda has up to 100 houses built or near completion and dozens of contracts to be honoured, he indicated.
The company was founded in 2002 by Conor Slattery and Paul Collins, and has built about 250 houses. At peak in 2006, it had a turnover of e26 million, employing up to 250 directly and indirectly. It currently has seven full-time employees.
A separate company paid e19m for 39 acres in Kenmare in 2005, but is not directly affected by the provisional liquidation of CDL.
CDL’s High Court petition said they have: “Significant assets, including work in progress, debtors, retention monies and equipment, the value of which is likely to decrease significantly in the event that it ceases to trade. In the circumstances, it is appropriate that a Provisional Liquidator be appointed to the Company in order to complete contracts and to preserve the assets of the Company.”