Dublin Club buyers ‘unaware’ it had extensive debts

The financial problems for a Dublin city centre club and restaurant stemmed from its directors acquiring a company that had extensive debts, of which they were unaware, a judge stated yesterday.

“The whole problem stems from Mr Eoin Foyle acquiring Sherland Entertainment, of which he was a director at the time,” Judge Jacqueline Linnane said in the Circuit Civil Court.

“Sherland had not kept proper books of account and, basically, Mr Foyle was acquiring their liabilities, not knowing what those liabilities were.”

Ross Gorman, counsel for Odessa Club and Restaurant Ltd, which was granted court protection from its creditors through the appointment of an examiner yesterday, said Mr Foyle accepted blame for the acquisition of Sherland, which operated a number of companies.

Judge Linnane told Mr Gorman that Peter O’Kennedy, a fellow director with Mr Foyle in Odessa, of 13/14 Dame Court, Dublin, “seems to have emigrated to the States” where “presumably he was going to stay”.

Mr Gorman told the court Mr O’Kennedy currently lives in the US and received information electronically from Mr Foyle regarding the financial position and examinership status of the company.

Counsel said it was his understanding that Mr O’Kennedy intended on returning from the US and, in any case, it was likely a new investor under the ongoing examinership would insist in a change in the board of directors of the Odessa company.

Arthur Cunningham, for the Revenue Commissioners, said Revenue was owed over €132,000 by Odessa Club and Restaurant Ltd for unpaid Vat and PAYE. The sheriff had been contacted on a number of occasions in relation to Revenue debt and an attachment order had been placed on the company’s bank account.

Eithne Corry, counsel for interim examiner Joseph Walsh, of Hughes Blake accountants, told the court that since his appointment a fortnight ago, there had been 15 unprompted expressions of interest in investing in the troubled company.

Ms Corry said the restaurant had entered a new licensing agreement and plans for the profitable restructuring of the company looked promising.

Judge Linnane said evidence suggested the company had a reasonable prospect of survival and confirmed the appointment of Mr Walsh as examiner and extended the period of protection on the basis of undertakings given to the court.