In a preliminary action before Ms Justice Mary Finlay Geoghegan, the court must decide if a meeting on July 18 of Superquinn directors was validly resolved in circumstances where one director is disputing claims by two others that the company had passed a resolution to bring the petition for examinership.
Two Superquinn directors, Kieran Ryan and David Courtney, told the court all three directors formally and “unanimously agreed” to seek to have an examiner appointed to the company, at a meeting held hours before Bank of Ireland appointed receivers to the chain.
In contrast, a third director, Simon Cantrell, said such a course of action was never agreed by him. As far as he was concerned, Superquinn had “missed the boat” and applying for examinership when the appointment of a receiver was imminent was “futile”.
In the proceedings, the judge must also decide whether the petition was brought within the three-day period as stipulated under the Companies Act and whether the application for court protection constituted “exceptional circumstances”. These issues are among those being heard in advance of Thursday’s scheduled hearing of the examinership petition itself.
If the court decides that the examinership petition can be heard, it will be opposed by the receiver, by Musgrave and the syndicate of banks which appointed the receivers, Kieran Wallace and Eamonn Richardson of KPMG, to the supermarket chain last week.
Mr Ryan, a chartered accountant who the court heard became a director of Superquinn on July 18 last, said he attended a meeting with Mr Courtney, Mr Cantrell, and two shareholders, Bernard Doyle and Terry Sweeney, to discuss the company’s situation after 3pm on July 18. Earlier that day, Superquinn had been served with letters of demand from the bank.
Mr Ryan said at the meeting, three directors agreed to apply for examinership in a unanimous decision.
However, Mr Cantrell effectively told the other directors they would have to go ahead with the examinership process as he did not want to get involved. He said Mr Cantrell did not express any opposition to the examinership application.
He said the first he knew of Mr Cantrell’s objection to the application for an examiner was in an affidavit given to the company’s lawyers.
The court heard that the company was preparing to apply for examinership three to fours months in anticipation that a receiver would be appointed. Mr Ryan said on July 18, a representative of the bank contacted him asking the board of directors to invite the appointment of a receiver. The company declined to make that invitation, but the receiver was put in place by the bank.
He said that such a step was unnecessary as an oral agreement had been made with an international investor to put money into Superquinn.
Mr Ryan said it was announced Superquinn was sold to Musgrave.
Mr Cantrell, under cross examination by Lyndon MacCann, counsel for the company, Mr Courtney and Mr Ryan, denied that a decision was taken by the board to seek the appointment of an examiner at the meeting. He accepted that examinership was discussed but there was “no resolution,” he said. He denied counsel’s suggestion he had initially agreed to enter the examination process, only to change his mind after a receiver had been appointed by the bank.
The hearing continues.