The court heard both companies will have a deficit of more than €212 million and no unencumbered assets on winding up. Their liquidator Simon Coyle, of Mazaars, has been asked to investigate a series of issues, including whether the companies continued to trade while insolvent and how such a large deficit was accumulated.
In appointing Mr Coyle, whose appointment was advocated by Patrick O’Reilly, for CF Structures, owed €5.6m, and supported by several other creditors, Mr Justice Peter Kelly said he felt very sorry for the company’s employees who were losing their jobs “on the threshold of Christmas”.
He also expressed sympathy for its creditors, who were owed “colossal” sums and were “very aggrieved“, feeling they had been “led along by the company when the writing was on the wall” and the companies should have ceased trading long before now. The company’s trade creditors are owed some €51.5m.
Robert Dore, a solicitor for several creditors owed €1.7m, had written to the Pierse companies interim examiner John McStay saying his clients were “deeply suspicious” of the Pierse directors “who induced them to work around the clock on many projects, in particular national schools, to meet deadlines in circumstances where these directors must have known of the insolvency of the company.”
This insolvency could not have happened overnight but Pierse continued to build up liabilities, “seriously jeopardising the future prospects of my clients and their many employees.”
In an affidavit, Fearghal O’Nolan, a Pierse director, said the monitoring of its cash-flow position was an “ongoing priority”.
The companies believed, in the months leading up to the petition, they would be part paid some of the €16m owed to them by Gannon Homes Ltd and some €1.8m from a schools contract but that did not happen. In the days leading up to its petition, Pierse become aware substantial cash was not forthcoming, he added.
Paul Sreenan, counsel for Kilsaran Road Surfacing and Contracting and related companies owed €2.7m, said it seemed it was decided to continue trading in the hope the Pierse companies would get €16m and €1.8m when more than €50m was owed to creditors. It was clear the directors knew the debts were building up and the companies now had no unencumbered assets, he said.
In his interim examiner’s report, Mr McStay said the recent trading history of the companies would require further investigation before a conclusion could be reached on the allegations made in the court proceedings.
Given the developments yesterday, Mr Justice Kelly dismissed the petition for examinership and made a winding-up order. While no creditor was prepared to fund the liquidation, the judge was informed Mr Coyle was prepared to act as liquidator based on the information now available to him.
The judge ordered the companies’ directors to provide a statement of affairs within 21 days.
The directors of Pierse Contracting are Fearghal O’Nolan, Ti Aisling, Brighton Road, Foxrock; Charles Norbert O’Reilly, Mount Prospect, The Court, Brennanstown Vale, Foxrock; Gerard Thomas Pierse, Villa Christina, Torca Road, Dalkey, Kieran Duggan, Foxrock Manor, Leopardstown, Dublin and Martin Murphy, Porterstown, Ratoath, Co Meath.
The directors of Pierse Building Services are Mr O’Nolan, Mr O’Reilly and Adrian Burke, Portersgate Court, Clonsilla, Dublin.