The liquidator of a meat processing company has asked the High Court to make the firm’s directors personally liable for debts of €2.7 million owed to parties including more than 100 farmers and businesses in the northwest.
John Healy, who is the official liquidator of Edenmore Meats Limited, seeks the orders against the firm’s directors businessmen Donal Gallagher and Richard Burke, as well as Robert Daly who resigned as a director in 2017 but remained as the firm’s company secretary.
He claims that when they ran Edenmore Meats, which operated what was described as a substantial meat processing facility in Lifford in Co Donegal, they operated the firm in a reckless manner and allowed it to continue trading when it was clearly insolvent.
It is claimed the three directors came on board in late 2014/early 2015 after a company called Twin Estates linked to the UK-based Mr Gallagher invested €1.4 million in Edenmore. It ceased trading in 2016.
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Represented by John Kennedy SC, with Brian Walker BL, instructed by solicitor Daniel Hughes, the liquidator says all three should be disqualified from acting as a company director or officer for at least five years.
They should all be made personally liable for the company’s debts and liabilities of approximately €2.7 million, of which €1.5 million is owed to farmers who were never paid for the animals they supplied to the business.
The applications are opposed by the directors who strongly deny all allegations of wrongdoing against them.
Represented by Gary McCarthy SC, with Hugh McDowell BL, the directors claim the company was already in trouble when they came on board.
They claim they acted honourably, responsibly and honestly at all times.
They had been hopeful of rescuing Edenmore but say that was ended in October 2016 when the business’s Lifford facility was unlawfully occupied.
It was a source of deep regret that they were not able to turn the business around, they claim.
Ultimately, Mr Gallagher claims, his investment in the firm was “an unmitigated disaster” for him personally and he remains the firm’s biggest creditor.
Mr Gallagher, an experienced businessman, had reluctantly invested the money through a company of his due to his connections with Donegal and the company whose former majority shareholder was his cousin Liam McGavigan.
Had Mr Gallagher’s company not invested in the company in 2014, the losses incurred would have been greater than those incurred in 2016, it is also claimed.
The directors claim they took nothing out of the firm and put measures in place to resolve the company’s difficulties and restore confidence with the farming community.
The firm had advanced proposals to repay farmers when in October the facility it leased was taken over and occupied by Liam McGavigan, whose relationship with Mr Gallagher had deteriorated, and persons allegedly linked to the paramilitary organisation the INLA.
The building was subsequently placed into receivership and sold.
Mr McGavigan, who was at the time of the alleged occupation the landlord of the premises, denies all claims of wrongdoing against him.
Following the occupation, the directors claim they were unable to access the facility, obtain any company records, file reports to the CRO, and the company ceased trading.
It is claimed that following the cessation of trading the directors, and members of their families were the subjects of protests, demands for payment, and were threatened and intimidated by individuals.
Opening the case on Tuesday Mr Kennedy told the court that “from the get go” of Mr Gallagher getting involved and the directors being appointed the company was insolvent.
Following Mr Healy’s appointment by the High Court in 2020 after it had been struck off, his client got little or no co-operation from the directors.
When books and records were eventually made available, counsel said that email correspondence between the directors showed that they knew that the company continued to trade when it was insolvent.
Counsel said the emails had made references about the firm’s trading position including expressing concerns about the company’s trading position that “no cheques bounced today,” with a smiley face emoji and that “there wasn’t a sausage in the bank”.
Counsel said that as part of his client’s case the court will hear from farmers owed money by the company who along with their families “were left devastated” because they were not paid by Edenmore, counsel said.
The farmers and businesses including marts “do not want the court’s sympathy”, counsel said, but “have come to the court seeking justice.”
The hearing before Mr Justice Oisin Quinn continues and is expected to last for several weeks.
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