120 jobs go as Whelan group wound up
The companies have 2,000 creditors with the largest secured creditor being the National Assets Management Agency which has taken over some €50 million debts owed to Anglo Irish Bank and opposed examinership due to the proposed large write down of secured debts.
Irish Cement Ltd, owed €4m of a total €10m due to unsecured creditors and Lagan Cement, owed €383,000, also opposed examinership.
Lagan had also brought a petition to wind up one of the Whelan companies and its proposed liquidator, Carl Dillon, was appointed by Mr Justice Brian McGovern as liquidator of all five companies. The judge made orders for the companies’ directors to file statements of affairs by January 28.
Other creditors of the companies included Bank of Scotland Ireland, owed €12m, and the Revenue, owed €641,000, both of which adopted a neutral position.
The directors had argued the companies had a reasonable prospect of survival on the basis of a proposed survival scheme involving sale of non-core assets, mostly property; procuring investment and the support of NAMA and the banks.
The petition for examinership was due for hearing yesterday but at the outset, John O’Donnell SC, for the companies, told Mr Justice McGovern an independent accountant had expressed the view the companies did not have a reasonable prospect of survival given the decision by NAMA to oppose the petition.
He said the directors had presented the petition in good faith on the basis Anglo would be neutral on examinership as it had indicated. He said the papers in the matter were served on NAMA and there was no indication there was any change in relation to Anglo’s position until very recently when NAMA made clear it was emphatically opposed to examinership.
This was a family business in existence for almost 40 years, and while there were disputes about figures and about issues of corporate governance, which were addressed, it had not been contested most of the 120 jobs would have been saved if examinership was successful, counsel said. His clients were very concerned that NAMA should have “drawn the axe” on these jobs.
He added, NAMA was within its legal rights to oppose examinership and, given that opposition, the companies had no reasonable prospect of survival.
When Mr Justice McGovern said “serious and grave issues” had also been raised by other creditors of the companies, counsel said his side would have been happy to deal with those.
The judge said he would not allow the court be used as a forum to put “a spin” on the matter.
Rossa Fanning, for NAMA, said he took exception to the criticism of his client which was entitled to oppose the examinership. Other creditors had taken a similar view the companies had no reasonable prospect of survival, he added.
The judge made orders that NAMA, Irish Cement and Lagan should get their costs of the petition against the five companies in the winding up. Mr O’Donnell had argued it would be unduly harsh to make costs orders against them.
The Whelan companies had said they have a consolidated deficit of €10m as a going concern rising to about €50m if placed in liquidation.
The five companies in liquidation are Whelan Group (Ennis) Ltd; Whelans Limestone Quarries (Contracts) Ltd; Whelans Limestone Quarries Ltd; Whelans Quarries (Carrigtwohill) Ltd and Shannon Explosives Ltd.
The directors said the Whelan Group was affected in recent years by the severe contraction in the construction industry, the funding crisis in the country and an unsuccessful investment and trading involvement with Uniform Construction, the main contractor on the Limerick drainage scheme.
They also said audit completion work and due diligence work on behalf of Bank of Scotland Ireland had identified financial inaccuracies, including the recording of duplicated sales invoices, in the internal accounts of the group and its subsidiaries for the years ending December 2008, December 2009 and September 2010.
This led to BOSI withdrawing invoice discounting facilities about November 2010 and there was now an excess drawdown on the BOSI facility of €2.9m, they said. In light of those issues, they had accepted the resignation of the group finance director.
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