Some €2.6m should not have been paid to two directors of a company sub-contracted to carry out part of a €30m clean-up of the former Irish Steel site in Haulbowline, Cork, it has been claimed in the High Court.
The effect of the payments to Stephen Griffin and David Ronan, of CTO Greenclean Environmental Solutions, Sarsfield Road, Wilton, Cork, was to render the company insolvent and to deprive its creditors of their entitlements, CTO creditor Louis J O’Regan Ltd, of Staffordshire, England, along with CTO liquidator, Myles Kirby, have claimed.
Mr Justice Robert Haughton ordered Mr Kirby be joined as a co-applicant in a case by O’Regan, in which it seeks payment of €2.6m from the directors. Mr Kirby argued he was in the best position to pursue the monies and to act on behalf of all the company’s creditors.
Ireland’s only steelworks operated at the Haulbowline site from 1939 until its closure in 2001.
The clean-up of some 650,000 cubic metres of waste from steel production was initially expected to cost some €30m. But when the real level of contamination was discovered in 2008, it was estimated to cost multiples of that figure with the result the Government terminated the entire contract. The main clean-up contract had been given to Hammond Lane Metal Company, Dublin, which sub-contracted some of the work to CTO.
In the original O’Regan proceedings, it was claimed that between February and May 2008, sums totalling €2,064,33 were paid to Mr Griffin, and €600,000 to Mr Ronan in January 2009.
O’Regan claimed it should be paid €2.6m which, it is argued, was unlawfully or improperly paid to the directors Griffin and Ronan.
CTO was wound up in 2012 following a court application by O’Regan. A liquidator was appointed but he resigned in 2013. The second liquidator also resigned and Mr Kirby was then appointed in February last year.
Mr Kirby carried out an investigation and found the firm was “barely solvent on a balance sheet basis”.
Mr Kirby then asked the court he be joined with O’Regan as a co-applicant.
He also sought an injunction prohibiting Mr Griffin and Mr Ronan from taking any steps to dissipate or utilise the monies which are the subject matter of the proceedings.
Both men denied the company was insolvent and say the payments made to them were by way of remuneration/pension.
Mr Justice Haughton said Mr Kirby could be joined as a co-applicant but he refused the injunction.
The judge said Mr Griffin, of Spring Hill, Carrigtwohill, Co Cork, had sworn on affidavit he had €200,000 in a pension fund, some of which he got permission from Revenue to access because of his ill-health and because he is unemployed, 54 years of age, and is financially responsible for his son who has been diagnosed with a serious illness.
He had transferred €60,000 from the drawdown to his wife and his only other asset is his Carrigtwohill home.
Mr Ronan, who described himself as a farmer from Castleblake, Rosegreen, Cashel, Co Tipperary, has €600,000 in a pension fund. He denies the liquidators’ claims payments into this fund by CTO was a fraudulent disposition and says the pension cannot by law be interfered with or assigned.
Mr Justice Haughton said there was no evidence of any intention to dissipate assets by either man.
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