Yesterday at the High Court, Mr Justice Garret Sheehan said he was satisfied to approve Eamonn Richardson of KPMG and Eamon Leahy of Leahy and Company as joint provisional liquidators because the firm was insolvent and unable to pay its debts.
Members of Home Payments said it was in the best interests of customers and creditors that the firm is wound up.
The court heard the firm’s customers are uncertain about their position following the company’s decision to cease operations, and that the provisional liquidators have set up a telephone line and email address to deal with customers’ queries.
Home Payments Ltd, 18 Rathgar Road, Dublin 6, sought examinership because its liabilities exceed the value of its assets.
As of last June, the company owed customers €6.17 million. Home Payments said its liquidity provision was insufficient to pay all their customers in full if they decided to withdraw all amounts standing to their credit.
In addition, the company said AIB may have a valid fixed charge over a number of investment properties it acquired. Between 1996 and 2006, Home Payments purchased 12 properties as investments.
The court heard that AIB recently sought a review of the business due to concerns over deposits and credit balances in its accounts and the use of funds for investments.
However, Home Payments obtained legal advice to the effect that the bank’s concerns may have been beyond the firm’s legal powers and thus, the validity of security given to AIB may be in doubt.
Home Payments was set up in the early 1960s to provide a household budgeting service in Dublin. It has evolved into a nationwide budgeting and bill-paying service.
Until its closure it consolidated its customers’ bills into one fixed weekly or monthly payment. It also provided loans.
The court heard at the time of its closure the firm had 2,300 customers. More than 1,500 of those are owed less than €3,000. Approximately 700 customers are owed between €3,000 and €10,000, while 23 customers are owed in excess of €10,000.
The company said that it has always operated with a liquidity provision of 30%, ensuring the company’s assets and amounts held on deposit exceeded the total amount of customer funds paid into the company. At present it has €2m in its bank account.
The judge made the matter returnable before the High Court later this month.
The liquidators will contact customers over the coming days. A helpline has been established on 01 497 5795.