A petition was recently filed in the High Court on behalf of two companies, Regan Development Limited (“Regan”) and McGettigan Limited (“McGettigan”) seeking the protection of the court pursuant to the Companies Act 2014 (the “Act”), and the appointment of an Examiner. Regan owns and operates the Regency Hotel on the Swords Road in Dublin and McGettigan owns and operates a licensed premise on Queen Street, Dublin 7 and four retail units in Bray, Co. Wicklow. On presentation of the petition the Court appointed Neil Hughes of Baker Tilly Hughes Blake as Interim Examiner.
Prior to the presentation of the petition the companies’ secured creditor, OCM EmRu Debtco DAC (“OCM”) had appointed a receiver to the secured assets of the companies including the Regency Hotel. A petition seeking the appointment of an examiner was subsequently presented by the companies to the Court. The petition was opposed by OCM, which objected to the appointment of an examiner on the grounds of alleged non-disclosure and improper purpose.
OCM argued that there was a material omission from the petition and grounding affidavit. It alleged that one of the company’s directors had made a threat to the Receiver that he would remove the Hotel’s IT facilities including IT platforms, telephone systems and email which operated the hotel booking system, on the basis that it was asserted that this system was owned by another company within the group. This was not denied by the petitioner, although it was argued that because the threat had been withdrawn the same day no material non-disclosure arose.
OCM also argued that the petition for the appointment of an examiner had been presented for improper motive and that the purpose of the petition was the protection of the shareholders’ interest in the various business enterprises of the companies.
Baker J ultimately held that, while there was a material non-disclosure on the part of the companies when presenting the petition with regard to the threat to remove IT systems, the non-disclosure was not of an extent and nature that would warrant the refusal of the petition. Baker J was also not satisfied that the evidence pointed to an ulterior or improper motive for the presentation of the petition and, whilst it may be the wish of the shareholders to retain ownership of the companies, their wishes and expectations are not, nor can they be, central to the considerations of the examiner.
The Court ultimately granted the petition and the appointment of the examiner to the companies was confirmed.
William Fry act for the examiner, Neil Hughes of Baker Tilly Hughes Blake, in this matter.
Contributed by Craig Sowman