The Irish High Court recently made an order winding-up a company notwithstanding that NAMA had security over all the assets of the company and that it was in the process of enforcing its security: In re Albion Enterprises Ltd IEHC 115, (Unreported, High Court, Laffoy J, 16 March 2012).

Facts
A petition to wind up Albion Enterprises Limited was presented to the High Court in January 2012. The petitioner alleged that the company was indebted to it in the sum of €55,675, plus costs to be ascertained.

On hearing the petition, Laffoy J noted that the National Asset Management Agency Act 2009 requires the court, before making an order for the winding-up of a company pursuant to section 216 of the Companies Acts 1963, to ascertain whether the company has an obligation to a bank asset that has been transferred to NAMA. Where the company has such an obligation, there are two mandatory requirements to be fulfilled: (i) a copy of the winding-up petition must be served on NAMA; and (ii) NAMA must be heard in relation to the making of the winding-up order. The judge noted that the petitioner had fulfilled both of these requirements.

An affidavit was put before the Court by NAMA with a view to blocking the winding-up. The affidavit set out that NAMA had security over all the assets of the company and that it was in the process of enforcing that security via the appointment of statutory receivers under the NAMA Act. Laffoy J noted that, on the basis of this evidence, it seemed highly unlikely that there were any assets of the company over which NAMA was not in control. Counsel on behalf of NAMA also told the Court that there was no evidence that there was any funding available for the liquidation.

High Court Decision
In her judgment, Laffoy J stated that where NAMA puts evidence before the court that it has security over all of the assets of the company, that factor alone should not influence the court in refusing to make a winding-up order. The Court noted that the making of a winding-up order in this instance would not prejudice NAMA or the statutory receivers appointed by it. In this regard, she referred to section 150(2) of the NAMA Act which provides that:

“The appointment of a liquidator to a company whose assets or any part of them are under the control of a statutory receiver does not displace the statutory receiver and does not affect his or her powers, authority and agency”.

As the petitioning creditor had proved that the company was insolvent and was unable to pay its debts as they fell due, Laffoy J held it was entitled to a winding-up order ex debito justitiae (i.e. as of right). The judge commented that had NAMA been able to prove that the petitioner had brought the winding-up petition for some ulterior motive, the order may have been refused. However, there was no suggestion of any ulterior motive in this particular case.

Laffoy J also stated that in circumstances where the company’s debts to NAMA totalled almost €60m, it was difficult to see how the liquidation of the company would achieve the petitioner’s objective of having its debt discharged. She added that “if common sense was the yardstick by which the Court had to determine whether to make a winding-up order in this case, the decision might be different.”

Contributed by Deirdre Murphy