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What’s in the papers?
30 March 2009
Roundup: Curtain calls for more property-related firms. Liquidity squeeze for small businesses and the construction industry. Good news for kitchen retailer and tyre firm. Tycoons duke it out on the docks. High spending former councillor brought down to earth by debts.
PROPERTY
First Equity/ Gallium
It’s curtains for the parent company of First Equity property investment group says The Sunday Times in Gallium goes into liquidation and The Sunday Business Post in More than 400 investors lose out in First Equity collapse. The group’s hopes of surviving examinership – and €52m in debts – were dashed when potential investors walked away last week. A refinancing deal of €28 million with a major international bank was on the table but a deal was not reached. Gallium had about 400 clients and currently has 20 projects in the pipeline which were at one time valued at €1b, says the paper. Some investors may make bids to buy out particular schemes. Kieran Wallace of KPMG was appointed liquidator by the High Court on Friday.
Laragan
Laragan calls in examiner over €11m unpaid bills says The Sunday Times. The housing arm of the Hanly Group, Laragan Developments, has gone into examinership after a winding up petition from an unpaid supplier. Millions are owed to its bankers, the tax man and numerous suppliers. According to the article: “Trade creditors are owed €10m, so can expect 30 – 35c in the euro if the examinership succeeds. The Revenue is owed €1m”. Paul McCann of Grant Thornton has been appointed examiner.
Redquartz/ Paddy Kelly
Developer Paddy Kelly hasn’t had a good month and this weekend it’s reported that Bank seizes property developer’s headquarters in the Sunday Business Post. Bank of Ireland Asset Managers appointed a receiver to 128 Baggot St, headquarters of Kelly’s Redquartz company, on the back of a personal debenture from the developer. The bank became concerned about his ability to repay a multi- million euro sum on the property after he recently said he was exploring bankruptcy. Grant Thornton’s Michael McAteer was appointed receiver and manager of the property.
MJ Roche Construction (Galway)
Things aren’t any better out West where Banks face heavy bill after Roche Construction collapse says the same newspaper. Four banks are facing multi-million euro losses after MJ Roche Construction (Galway) was put into liquidation with debts of €8m after a dramatic decline in business. The owner, Martin Roche, also has personal liabilities with the banks of close to €15m. Kieran Wallace of KPMG is the provisional liquidator.
RETAIL
Kitchen World
Good news at last for a retail examinership as the Sunday Business Post declares Kitchen World jobs to be saved. New investors plan to inject €1m into the company saving 80 jobs in the process. The kitchen manufacturer and supplier has 10 shops in the Republic but went into examinership last December with debts of more than €14m. Examiner Kieran Wallace of KPMG has agreed to allow former owners of Kitchen World to invest and take control of the company in one year. Paul Begley and Francis Kearney sold the firm in May 2008 to two businessmen for €9.9 million. They have agreed to waive certain monies that they were due in relation to the sale. Under a proposed scheme of arrangement preferential creditors will receive 20c per euro owed while unsecured creditors received 10c.
Kwik-Fit Ireland
Liquidation also has its benefits. Kwik-Fit Ireland has estimated surplus of €150m after liquidation writes The Sunday Tribune. The fast-fit tyre company, which is in voluntary liquidation under Ernst & Young’s David Hughes, had an estimated surplus of more than €149m after paying its creditors.
In April, the liquidator will hold a general meeting of the members of the company to determine what to do with “the books, accounts and documents of the company".
The company is a full subsidiary of Kwik-Fit Europe, Europe's largest fast-fit services provider. The Irish company applied for a voluntary winding-up in December, 2006. “Its assets were made up of a bank balance of nearly €72,000 and debtors of nearly €149m. Its liabilities comprised just under €45,000 which were due to a combination of other creditors and fellow subsidiaries,” said the Tribune.
Crosbie vs. Heffernan
This week sees more of the legal prize fight between property impresario Harry Crosbie and retail tycoon Margaret Heffernan. Crosbie takes on Dunnes in the Sunday Business Post reveals that Crosbie will ask the High Court this week to make a judgement on his €23m legal action against Dunnes Stores for its alleged failure to complete an agreement to become anchor tenant at the Point Village development in the Docklands.
LIQUIDITY
The Construction Industry lobby claims that banks are all talk when it comes to lending in Banks in home loan ‘charade’ reported by the Sunday Independent. “The complaints against the banks include overcharging on business loans and exaggerating claims that mortgages are being released to first time buyers,” according to the findings of the first nationwide survey of the sector by the Construction Industry Federation (CIF). More than 800 building firms responded. The Irish Mortgage Corporation agreed that although banks were lending it was difficult to source a mortgage, said the paper.
More small businesses are looking for protection against customer payment defaults says the Sunday Times in Crunch time for credit insurance. Credit insurance covers firms against customers who don’t pay or go out of business but some insurers are now “pulling cover, slashing risks or hiking premiums,” says the article.
PERSONAL DEBT
The Irish Times reports Ex-FF councillor will have to change lifestyle, says judge. “A High Court judge has said a former Fianna Fáil councillor who ‘enjoyed the good life’ before his auctioneering business in effect collapsed will have to make a ‘radical alteration to his lifestyle’ given his ‘enormous debts’, says the broadsheet.
Gerard Killaly, who lives in a nine bedroom house in Edenderry, Co. Offaly, had sought €16,000 a month from his frozen assets to cover household and other expenses. Ms Justice Peter Kelly said Killaly must ‘come to his senses and radically reduce his living standards to take account of his indebtedness’ and noted that after his auctioneering business collapsed in 2008 he had bought a new Audi Q7 SUV. Killaly is not allowed to reduce his assets – including properties in Tullamore, Laois, Dublin and Westmeath – below €8 million.
www.tribune.ie
www.independent.ie
www.sbpost.ie
www.irishtimes.com
www.sundaytimes.ie
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