THE HIGH Court has ordered the liquidator appointed to building contractor Pierse to investigate the group’s activities over the last 18 months, following concerns raised by a number of its creditors.
Mr Justice Peter Kelly appointed Simon Coyle of Mazaars as liquidator to Pierse Contracting and Pierse Building Services after the two companies unexpectedly withdrew their petition for the High Court’s protection from their creditors.
CF Structures, to which Pierse owes €5.7 million, and a number of other unsecured creditors, proposed Mr Coyle’s appointment.
Making the appointment, Mr Justice Kelly instructed Mr Coyle to investigate the two companies’ dealings over the last 18 months. He said that a number of issues raised by creditors required this step.
Pierse owes 2,000-3,000 unsecured creditors – mainly made up of subcontractors and suppliers – a total of €51.5 million.
Rossa Fanning SC, for Pierse, told the High Court yesterday the companies believed these creditors would be unlikely to recover any of that money in a liquidation.
Any assets realised in the process are likely to go to Bank of Ireland, which is a secured creditor of the group.
The High Court appointed accountant John McStay of McStay Luby as interim examiner to the companies last month. Their petition to have his appointment confirmed was adjourned last week after creditors raised concerns about almost €70 million worth of inter-company loans.
Yesterday, the companies withdrew the application saying that their situation had worsened since their original petition for the court’s protection and Mr McStay’s appointment.
Robert Dore, a solicitor for several creditors owed some € 1.7 million, had written to Mr McStay, saying his clients were “deeply suspicious” of the Pierse directors.
Mr Dore said his clients had been asked to “work around the clock on many projects, in particular national schools, to meet deadlines in circumstances where these directors must have known of the insolvency of the company”.
Paul Sreenan SC, representing Kilsaran Road Surfacing and Contracting, which is owed €2.7 million, said yesterday it seemed it was decided to continue trading in the hope the Pierse companies would get €16 million and €1.8 million owed to them when more than €50 million was owed to creditors.
It was clear the directors knew the debts were building up and the companies now had no unencumbered assets, he said.
In an affidavit, Pierse director Fearghal O’Nolan said the monitoring of its cash flow position was an “ongoing priority”.
The companies believed, in the months leading up to the petition, they would be part paid some of the €16 million owed to them by Gannon Homes Ltd and some €1.8 million from a schools contract, but that did not happen.
In the days leading up to its petition, Pierse become aware substantial cash was not forthcoming.
When Pierse first petitioned the court, the group issued a statement saying the contracting business was profitable, but it was owed €30 million, more than €20 million of which was severely delayed.
