At the petition of its directors, an examiner has been appointed by the High Court to Lyons Excavations of Ardagh, Co Limerick, which had a turnover last year of €28.3 million.

The court was told the future prospects of the company are positive, subject to the successful implementation of a scheme or arrangement with its creditors.

If the company was facilitated in continuing to trade by the appointment of an examiner, the petitioners - who are the directors of the company - believed it would enjoy the benefit of a further period of growth and activity in the construction industry, Ms Justice Finlay Geoghegan heard. Research had indicated that the growth in the construction industry would continue into the foreseeable future within the private sector.

Since the company began trading in 1991, it had grown from an initial workforce of five to 92 employees and had grown significantly in the last number of years, coinciding with an upsurge of activity in the construction industry and had a turnover last year of €28.3 million.

Early last year, the company commenced a contract for work known as Pelletstown West Infrastructure Development, Western Section. The contract was entered into with a partnership between Castlethorn Construction and Ashtown Partnership and involved significant works being carried out at Pelletstown West on behalf of Ashtown.

However, although the tender price for the works was €5.43 million there were considerable variations that led to time delays and additional works being carried out.

A significant dispute had arisen between the company and Ashtown concerning payments for the substantial variations. On April 24th last, the company presented to Ashtown essentially an application for final payment. The total claim was for €13.84 million. Ashtown had made payments totalling €5.44 million but an engineer had refused to certify for the balance of €8.40 million which, Lyons said, was due.

The timescale for resolving the dispute by way of conciliation, arbitration or in the High Court would be lengthy, the judge heard.

Against the background of the dispute, the company entered negotiations with Ashtown which led to a confidential agreement.

Although the settlement involved a substantially reduced payment to the company, it would facilitate its survival in the context of an examinership, the court was told. There was an excess of liability over assets of €3.75 million. The company was insolvent and not in a position to pays its debts as they fell due.

An independent accountant believed, subject to a number of conditions, that the company would have a reasonable prospect of survival as a going concern if an examiner was appointed.

Ms Justice Finlay Geoghegan appointed Mr Brian McEnery, of accountants Horwath Bastow Charleton, as examiner.