A company claims it has an equitable interest in the Wellington Hotel in Temple Bar, Dublin, as a result of fitting out the premises before it went into receivership.
Allied Retail Innovations and Solutions Ltd has brought High Court proceedings against joint receivers Declan Taite and Sharon Barrett as well as against the former operating company of the hotel, Janel Investments Ltd (in receivership).
The receivers say the claims by Allied are holding up the sale of the hotel for €14 million.
They also allege the Allied proceedings are “little more than a poorly provenanced and contrived attempt” to circumvent the fact that Allied is an unsecured creditor of Janel Investments.
Allied is seeking declarations including that it has acquired an equitable interest in the premises by way of constructive trust, or otherwise, which is enforceable against the defendants.
In the alternative, it seeks declarations it has an equitable charge over the premises and/or that the goods within it remain its property and are being held by the defendants solely as fiduciary agents/bailees.
It also seeks an order for the defendants to deliver up the goods or allow Allied to enter to remove them. It seeks judgment for €480,534 which it says is the outstanding sum on the €3.1 million building agreement it had with Janel Investments in November 2019 to carry out the fit-out works.
The claims are denied.
In an affidavit seeking entry of the proceedings to the fast-track Commercial Court on Monday, receiver Sharon Barrett said the receivers do not have any liability in connection with the debt between Allied and Janel Investments.
She said the property is subject of a mortgage with Finance Ireland which is a secured creditor. Once the hotel is sold and Finance Ireland paid from the proceeds, along with the costs of the receivership, there will be “little or no prospect of recovery” for unsecured creditors, she said.
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The receivers held a competitive bidding process for the sale of the hotel last February and the preferred purchaser offered €14 million.
While the preferred purchaser has been informed of Allied’s claims in the contract documents for the sale, the failure of Allied to withdraw its claims “has proven to be a significant obstacle” to the completion of the transaction, Ms Barrett said.
The case was admitted on consent to the Commercial Court on Monday by Mr Justice Denis McDonald.
Aidan Redmond SC, for the defendants, said that while it was a claim for €480,000, the larger claim of equitable interest arose out of the €3.1 million building contract. There was also the issue that the sale of the hotel was being held up by this claim, he said.
The judge approved directions for proceeding with the case and said it could come back in December.
