Cullen forgot he owned hotel land

The five-star Muckross Park Hotel has been put back in receivership after businessman Bill Cullen and partner Jackie Lavin lost their legal battle for court protection while they put an investor in place.

The order reinstating the ACC-appointed receiver to take control of the Killarney hotel came after Mr Justice Peter Charleton declined to confirm the appointment of an examiner and give the hotel 100 days under High Court protection to come up with a survival plan.

The judge ruled after it emerged the three companies under the Muckross umbrella which sought the protection of the court owned only half the hotel, and Mr Cullen owned the other half.

Afterwards, Mr Cullen said he was upset by the decision but would not comment further.

ACC, which is owed €9.2m, opposed the petition for full examinership on the basis of a material non-disclosure relating to ownership of the lands and the creation of a leaseback arrangement relating to the new wing on those lands.

Receiver Declan Taite was restored to take control of the hotel, which employs 106 people, from 4pm yesterday. Mr Justice Charleton said that, since the three companies had sought the protection of the court, a complicating factor had come to light regarding the ownership of the hotel and, in particular, the new wing, which was built in 2007.

Earlier, the High Court heard Mr Cullen forgot he owned the land the wing is on and did not deliberately withhold information when he and Ms Cullen moved to unseat the bank-appointed receiver and seek the court’s protection last month.

Counsel for the Muckross companies, John O’Donnell SC, said Mr Cullen was under pressure to assemble documents in a short time to unseat the receiver, and forgot he made a purchase of the lands in 2005. Counsel said the bank demanded payment of loans “out of the blue” last month. Two days later, at a meeting with Mr Cullen and Ms Lavin, ACC informed them the receiver was waiting in the hotel car park to take over the business.

Mr O’Donnell said Mr Cullen was shocked at what occurred and offered his abject apology for what happened but it was not concealed from the bank as they already knew about it.

Last month, Mr Justice Charleton ordered that the receiver be replaced by an interim examiner.

In his ruling yesterday, Mr Justice Charleton said he was prepared to look at the case on the basis that the half of the hotel not owned by the three companies was owned by Bill Cullen. ACC’s objections, he said, were based on material non-disclosure about the half owned by Mr Cullen.

Mr Justice Charleton said he could not hold that Mr Cullen had any intention to be deceitful, but there was an obligation to make full disclosure and there was a breach in putting matters before the court.