Ged Nash: Unclear if Clerys workers will be paid by liquidators

Business Minister Ged Nash has admitted he does not know if all workers and creditors who lost out because of the highly controversial sale and closure of Clerys will be paid by liquidators.

In a report on the situation presented to Cabinet yesterday, he said he believed the current legal set-up was sufficient to deal with the matter, despite widespread calls from opposition politicians and trade unions for new worker protections to be enacted.

Mr Nash said the law did allow for a situation where assets were kept in one arm of a firm, while losses built up in another part, but it was too early to say if liquidators would pay out to all those impacted by the deal.

The Clerys deal caused controversy as the store was split into a retail arm, which was liquidated, while assets were bought by an investment group.

The State may end up as the biggest finanical loser in the situation as it will have to pay out large amounts to former workers, Mr Nash said. He has advised Social Protection Minister Joan Burton that her department will become a prefered creditor for the company due to the large payouts it will be involved with following the wind up.

Sources close to the minister say he is confident that section 599 of the Company Law Act will mean the assets of related companies to the liquidated one will be available to pay creditors.

Natrium, which bought the Clerys building last month refused to meet with Mr Nash when the minister requested to hear its side of the story when he was drawing up the 23-page report.

Mr Nash added that while he believed the current legislation was in order, if assets were not available to liquidators, further action would need to be taken.

The minister expressed outrage at the way Clerys workers and concessionaires at the store had been treated in recent weeks.

“What happened in Clerys was very shocking. I am unaware of any explanation from those involved as to why it was believed necessary to treat them in the manner I have described.

“But I want to be clear about this. There is no evidence that what happened is due to any discernible failure of our employment laws or a failure on the part of any State body.

“Indeed, in economic terms the State may well turn out to be the biggest loser in this transaction. In acting as — in effect — the statutory undertaker for the liabilities of the trading company to its employees, the Department of Social Protection Protection will pay out very significant sums of money over the coming weeks.”

However, Mr Nash said he believed current laws were sufficiently robust to deal with the situation.

“My provisional opinion, at this preliminary stage, is that we have as yet no reason to believe that the measures I have listed are inadequate to ensure the intended policy outcome: to ensure, in other words, that all the assets that should properly be available to the liquidators of a company can be recovered by them.”

American firm Gordon brothers sold Clerys to Natrium last month, and OPS Operations Ltd, which ran the store was put into liquidation which saw some 460 people lose their jobs.

Natrium has said that its plans for the landmark Dublin building will create 1,700 sustainable jobs.