A liquidator has alleged members of a family perpetrated a fraud against their own development firm before it went bust by transferring a €4 million company property to themselves for no charge. A tax bill of €4.4 million remains unpaid, the liquidator said.
Aidan Garcia, liquidator of the Sloyan Brothers building/development company wound up in 2007, claims a property at Abbeyglen, Johnstown Road, Cabinteely, Co Dublin, where 44 apartments were built, was transferred to company shareholders Joseph, Seamus and Sean Sloyan and Catherine Doherty, and also to Maura Sloyan and Clare Sloyan-Roche, in March 2006.
Mr Garcia, of Copsey Murray Chartered Accountants, claims these individuals never paid the Sloyan Brothers company for the land. He also alleges Allied Irish Banks (AIB) knew the company had not been paid for the land when the bank sanctioned a mortgage for the lands to be repaid once the apartments were built.
AIB says it lent the money to the Sloyan family members, not to the company, while the Sloyans contend €4 million was repaid to the company for the Abbeyglen lands.
Mr Garcia is suing the six family members and AIB seeking the return to the company of either the Abbeyglen asset or its curent estaimated value of €8 million.
The Sloyans and AIB knew the mortgage monies ostensibly paid to the company to purchase Abbeyglen “were in reality advanced to build apartments on the lands”, he claims. AIB sought to take security over the land and the Sloyans appear to have hoped, after the apartments were built, they would profit from the differential between the value of the units and what was owed to AIB, he says.
Due to the economic downturn, this plan “became derailed” and as a result the interests of the creditors, including the Revenue now owed more than €4.4 million — were not considered by the family members, he claims. As a result, a fraud was perpetrated against the company in contravention of the Companies Act, 1990, he alleges.
Mr Justice Brian McGovern granted an application by Gary McCarthy SC, for the liquidator, to fast-track the case in the Commercial Court. The judge rejected arguments by counsel for the six Sloyan shareholders and family members of culpable delay in bringing proceedings. AIB was neutral on the fast-track application.
In affidavits, Mr Garcia said the central issue in the case was the Sloyan family never paid the company for Abbeyglen and company accounts confirmed this.
The fact the company was not paid for Abbeyglen was fortified by a number of comments by his predecessor as liquidator, Barry Forrest, from whom Mr Garcia took over in October 2012, he said. It was clear Mr Forrest approached the liquidation in the belief members of the Sloyan family owed monies to the company, he says.
During his investigation, he did not receive any meaningful assistance from any of the respondents or from Mr Forrest, his predecessor, he said.
“I have painstakingly tried to unearth what happened to the company’s main asset in these proceedings and have received conflicting versions of events from the directors/shareholders and its bankers.”
