A Limerick-based machinery company with debts of more than £1.3 million to the Revenue Commissioners - and alleged to have been trading for some time while insolvent - was wound up by order of the High Court yesterday.
Mr Justice Peter Kelly appointed Mr Martin Ferris as official liquidator to Malachy Quinn (Machinery) Limited with registered offices at Clonmoney House, Newenham Street, Limerick.
He also ordered that each of the three directors - Mr Malachy Quinn and his wife Marie, The Georgian Village, Castleknock, Dublin, and their daughter, Ms Eithna Corkery, of Swords Road, Santry, Dublin - file a statement of affairs.
The company supplied large machinery and spare parts to the quarrying industry in Ireland. Audited accounts showed sales of £1.57 million in 1995 and £2.24 million for 1996.
Mr Liam J. Irwin, Collector General, said the company owed £1,301,652 in unpaid VAT, PAYE/PRSI, Corporation Tax and interest.
A demand for £535,463 was served on the company, which then had its registered office at John F. Kennedy Estate, Long Mile Road, Dublin, on September 30th, 1998. However, the money had not been paid up to April 23rd. On April 6th, members of the company at a general meeting of Creditors had passed a resolution that the company, by reason of its liabilities, was unable to trade, should be wound up and Mr Anthony Fitzpatrick, accountant, Galway, be appointed liquidator.
During that meeting it was revealed that all of the stock - except £20,000 - had been sold and the company had been insolvent for a number of years, Mr Irwin said.
It also appeared that directors' loans, according to accounts for the year up to October 31st, 1996, had been reduced from £496,545 to £180,000 in circumstances where no repayment had been made by the directors during that period.
Mr Gerard Scannell of the Revenue Commissioners said he believed the company, through its representatives, used a variety of stalling tactics to ensure that, even though they were making no payments to the Revenue Commissioners, they were holding out the prospect of a substantial payment and a proposal to pay the company's indebtedness at a time when they intended and did discharge the bulk of the trade creditors, and at a time when they were aware they would cease to trade.
The general meeting on April 6th was not attended by any director who knew about the workings of the company, Mr Scannell said in an affidavit.
At that meeting, Mr Scannell said, he heard Mr Dermot McDermott of the Irish Trade Protection Association, representing one creditor, ask if the company had been solvent in the past 10 years. Mr Scannell said Mr Michael O'Mahony, an accountant who was described as an advisor to the company, said he did not believe so.
When Mr McDermott responded that, in this event, the company should have been wound up ten years ago, Mr O'Mahony replied "that was a fair point", Mr Scannell said.
Mr Scannell said he had pointed out to Mr O'Mahony that the bank's indebtedness had been discharged and this had the result that the directors had avoided having to pay on foot of any personal guarantees. He said Mr O' Mahony agreed the personal guarantees were in place with Bank of Ireland but said he had no information when the guarantees had been discharged or when exactly the bank accounts had been reduced.
The chairperson of the meeting, Ms Eithne Corkery-Quinn, indicated the company would proceed with its own nominee as liquidator, Mr Anthony Fitzpatrick, accountant, of Newenham Street, Limerick. Mr Scannell said he had advised that the Revenue Commissioners wished to have Mr Martin Ferris appointed. The court heard that Mr Fitzpatrick had agreed to resign as liquidator at a meeting called for that purpose on Friday last.
Mr Justice Kelly returned the matter to the Examiner's Court on June 21st.
