The High Court has appointed joint provisional liquidators to a company operating the Caritas Convalescent Centre in Dublin, which employs 65 people, including nurses and healthcare staff.
Founded by the Sisters of Charity and located at Merrion Rd, near St Vincent's Hospital, the centre has been closed since the end of March as a result of the outbreak of the Covid-19 pandemic.
Incorporated in 2001 and operating as a registered charity, Caritas Convalescent Centre DAC had a capacity of 54 beds and provided convalescent services to patients from various hospitals in the State.
Mr Justice Brian O'Moore said on Thursday he was satisfied it was in the public interest to grant the petition of the company's directors to appoint joint provisional liquidators, for reasons including that would permit its staff an opportunity to take up employment elsewhere.
Because the staff are not employees of the HSE, they cannot currently be redeployed elsewhere within the HSE and the appointment of liquidators would give them certainty about their employment position as soon as possible and allow their valuable skills to be utilised elsewhere within the healthcare system, he said.
The grounds for seeking provisional liquidators were not the "classic" ones as there was no threat to the assets of the company and no issue about probity of management, he said.
However, the court has discretion in this regard. "We do live in extraordinary times," said Mr Justice O'Moore, adding that a relevant factor was the desirability of ensuring staff could be released for duty elsewhere in the health service.
For that and the other reasons set out in the petition, he granted the application by Stephen Brady, for the company, to appoint Neil Hughes and Dessie Morrow of Baker Tilly as joint provisional liquidators.
Mr Justice O'Moore also made directions for advertising of the petition, and service of it on parties including two trade unions representing staff, Forsa and the INMO, and returned the matter to July 27.
The petition was grounded on an affidavit of Stephen Quinn, chairman of the board of directors which is comprised entirely of unpaid non-executive directors. The company's shareholders are Sr Agnes Reynods and Sr Angela Kelly, each of whom hold one ordinary share.
The petition outlined, as a result of closure of the centre, it no longer received income from private patients charges.
Funding from the HSE, under section 39 of the Health Act, meets 70% of staff costs and is insufficient to meet the centre's operational costs, it said. Staff costs are some €200,000 a month and the centre had been availing of the State's temporary wage subsidy scheme to enable staff to be paid, but there was uncertainty when that might cease.
The petition said, in the absence of private funding, the running of the centre by the company is not viable and it will not have sufficient resources to pay staff in full. Once the temporary scheme ceases, a liability to the company's employees of some €617,000 will arise, it was stated.
Other difficulties included considerable uncertainty when, and in what form, the centre might reopen. If a single case of Covid-19 was detected, it would have to close for 28 days and could not generate income. Physical-distancing requirements would reduce its bed capacity to 30, further decreasing income without reducing overheads. Operational costs would also increase because of the additional expenditure that would accompany any reopening.
It had also been informed its lease for the centre premises, due to expire on November 30, 2022, will not be extended.
All those factors led the directors to conclude the company was no longer viable.