Bid to have hospital’s backers wound up

AN investment advisory firm involved in a €90 million private hospital development in Cork city has petitioned the High Court to wind up the hospital’s backers, Sheehan Medical Ltd.

The petition, lodged by Dublin-based company Investor First, is due to be heard next Monday in the High Court.

Investor First, run by businessman James Carroll, had previously succeeded in securing a judgment against Sheehan Medical Ltd for €526,350. In April, solicitors acting on behalf of Investor First successfully argued that money was owed for services provided in sourcing the building that housed the Cork Medical Centre (CMC). CMC opened in Mahon in Cork city last October, and closed less than six months later with the loss of 75 jobs. Sheehan Medical Ltd blamed the closure on the refusal of the VHI to provide cover at the facility.

Sheehan Medical Ltd was the company behind the setting up of CMC, run by operating company CMC Medical Operations Ltd. The latter wrote to employees on March 28 informing them the company was insolvent.

According to court documents, Sheehan Medical Ltd, run by Dr Joe Sheehan, co-founder of the Blackrock Clinic, and his son James, hired Investor First in 2008 to work on a number of projects.

The following January, Sheehan Medical Ltd asked Investor First to locate a suitable building for a private hospital in Cork and to raise finance for the property deal, in return for a transaction fee.

The investment advisory firm located a premises in Mahon, built by developer John Cleary, and, with the agreement of Sheehan Medical Ltd, began talks with the developer.

Investor First claimed that, contrary to a clause in their agreement banning Sheehan Medical Ltd from dealing directly with the owner of any building that was the subject of negotiations, the company contacted the developer involved and agreed a deal for a lease.

Earlier this month KPMG, liquidators for CMC, confirmed it was unlikely any of the hospital’s 100-plus unsecured creditors — between them owed more than €4 million — would receive any payments.

Among the largest creditors are Sheehan Medical Ltd, owed €3.5m. A Mallow-based company, Clyda Healthcare Services, is owed almost €218,000, the second largest sum outstanding.

The Mater Private has already expressed interest in taking over the facility. However clarification is being sought by KPMG as to whether or not the lease agreed between CMC and John Cleary Developments (JCD), the landlord of the premises, still remains in place.

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