Receivers appointed to waste company
The bank, owed €53 million and the companies’ biggest creditor, said the receivers will operate the business as a going concern for the “short to medium term”, and that wages will be paid and waste collection services maintained.
The bank’s move came after the directors of the companies told the High Court yesterday they would not be appealing the court’s earlier refusal to appoint an examiner and were not objecting to receivership. In those circumstances, Ms Justice Mary Finlay Geoghegan ceased court protection for the companies, discharged the interim examiner, and said no winding up order would be made.
The appointment of Kieran Wallace and Padraic Monaghan as joint receivers was made hours after the judge refused to confirm examinership on grounds the companies had failed to provide adequate evidence to show they had a reasonable prospect of survival.
The judge said she had reached that conclusion “with regret” and was extremely concerned about what was to happen to the employees. She continued court protection while the companies considered whether to appeal, but their counsel later indicated there would be no appeal.
Counsel said an appeal was not practical given the daily nature of the companies business and his clients were not objecting to a receiver, but a winding-up order would jeopardise the companies’ licences.
Bernard Dunleavy, for Bank of Scotland, said the bank had engaged with the companies since the court’s ruling and matters had progressed. The bank was appointing joint receivers and a team to work with them which included experts in the waste business.
One of the receivers was preparing to go on site to assure employees wages would be paid and the intention was the business would trade in the short to medium term, he said. Trucks were on their way to landfill sites with waste and the receiver would engage with Greenstar to ensure that happened. The bank believed there were sufficient cash resources to meet the companies’ obligations but, if not, the bank would meet the costs incurred.
Cormac McNamara, for Limerick County Council, said his client noted the receiver’s intent to keep the business trading, to pay employees and to maintain waste collection services. The council would require plenty of notice if that situation was to change, he said.
The judge said she would not make a winding-up order in circumstances where the bank had appointed receivers and put arrangements in place to protect the companies’ assets and the position of creditors and where the receivership did not have the effect of terminating contracts of employment.
BoS had strongly opposed examinership in proceedings before the judge last week on grounds including its claim the companies had no reasonable prospect of survival. The bank, which provided extensive facilities for expansion of the companies in recent years, ceased funding the companies earlier this month and said it would provide no more facilities.
All other creditors of the companies had supported examinership, while the Revenue Commissioners, owed €1.6m, adopted a “guardedly neutral” position. The Revenue was very critical of the fact the companies’ management used tax monies for over a year to fund working capital requirements and insisted all tax obligations must be met during examinership.
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