Examiner appointed to Fallon & Byrne
Mr Justice George Birmingham granted the company, which still has a sales turnover of over €8m, protection of the court by appointing chartered accountant Neil Hughes as interim examiner to run the business as a going concern.
Barrister Gary McCarthy SC told the court that while the company was still making a profit it had found itself, for a number of reasons, unable to meet its historic and current tax liabilities.
He said the Revenue Commissioners had served a petition to wind up the company but the directors felt there still were strong prospects of it surviving under examinership.
Mr McCarthy, who appeared with Ross Gorman BL, for the company, said its problems arose mainly from a decision of the directors Paul Byrne and Fiona McHugh to concentrate on front-of-house duties while leaving financial administration to an under-qualified book-keeper member of Mr Byrne’s family.
Unbeknownst to the directors, substantial arrears of taxes in the region of €840,000 had been allowed to build up despite relevant returns having been made to the Revenue Commissioners, which eventually issued letters of demand and ultimately a petition to wind up the company.
Mr McCarthy said the ability of the financial administrator to mask such a significant tax liability from the directors was a fundamental weakness in the systems the directors had put in place when the company was set up in 2006.
He said Fallon & Byrne had called in Delaney, Locke and Thorpe (DLT) accountants to represent it during an audit and discovered a number of inaccuracies and discrepancies. It had found that the financial administrator had misappropriated company funds of at least €223,000.
The administrator had suffered a psychological breakdown and ceased to be employed. She was not in a position to compensate the company.
Mr McCarthy said an instalment plan to pay off its historic tax debts had been agreed with the Revenue, but the company had fallen behind with its current tax payments and the Revenue Commissioners had ultimately lost patience with the company.
He told Judge Birmingham that the company had suffered due to the economic recession since 2008 and turnover had decreased from €11m but had levelled off at just over €8m.
Last year’s bad Christmas weather had been devastating for the company.
As a result of its difficulties with the Revenue Commissioners, the company had been unable to get a tax clearance certificate which was necessary to renew its drinks sales license.
Mr McCarthy said DLT accountants believed that given the protection of the court from its main and other creditors the company could succeed again.
Judge Birmingham appointed Mr Neil Hughes, of Hughes Blake, Chartered Accountants, as interim examiner. Proceedings were adjourned until January 12.
