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What's in the papers?
27 April 2009
Bank seizes builder’s Dublin headquarters; Slump in leisure market bunkers plans for golf resort; Survival plan for home entertainment chain to be submitted to court; Dragon’s Den star gets burnt as mobile-phone firm goes into liquidation; New charge issues against Irish developer in the Isle of Man; One of the country’s largest construction companies is winding down its British operation.
PROPERTY
Paddy Kelly
Developer Paddy Kelly is being sued by the Bank of Ireland in relation to his business headquarters at 128 Baggot Street in Dublin. A motion of entry for the case will be heard in the business division of the High Court today (Monday) according to an article in the Sunday Tribune headed “BOI Taking Paddy Kelly To Court Over Loan Default”. The case follows the reported seizure of the building and the appointment of Michael McAteer, of Grant Thornton, as receiver. Kelly has told the courts that he is considering a bankruptcy scheme of arrangement.
Separately, Coolbrook Developments, in which Kelly’s Redquartz has a stake, is facing legal proceedings from Jim Brennan, a leaseholder to a building on Tara Street in Dublin. Brennan is understood to have been promised a payment for vacating the premises on Tara Street, which Coolbrook intended to redevelop. A case against Kelly by businessman Hugh McGivern, connected to a dispute over the Mango Irish franchise, is also due in the Commercial Court next week.
Ballymore Ireland
Developer Sean Mulryan’s Ballymore Ireland Group has had a new charge over its freehold and leasehold property registered in favour of Anglo Irish Bank. The debenture was registered in the Isle of Man, according to “Anglo Takes New Charge Against Ballymore Company” in the Sunday Tribune. The charge covers “all present and future bank accounts of the company” held with Anglo Irish or its group companies. The debenture was created as part of the conditions Anglo imposed on a guarantee from Ballymore Ireland Group in relation to its subsidiary, Ballymore Millharbour, which is developing apartments in London.
Pierse Construction
One of the country’s largest construction firms, Pierse Construction, is winding down its British subsidiary, Pierse UK. The decision, made in the last fortnight, is mainly attributable to the British recession and the lack of movement in the property and commercial markets there. “Pierse To Wind Down British Subsidiary”, the Sunday Business Post reported. The article said that the business has substantial debtors and outstanding monies to the company would be sought to meet creditors’ payments.
RETAIL
Chartbusters
A hearing to consider a survival plan for the Chartbusters home entertainment chain is to take place tomorrow (Tuesday). Under the Heading “Survival Plan For Chartbusters Given More Time”, the Irish Times reported that the Commercial Court was told that the Examiner, Neil Hughes, was preparing a survival plan for the group with a view to saving up to 170 jobs. The court was told that potential investors wish to consider a recent letter from Bank of Scotland Ireland about the terms under which it would consider to provide facilities.
Various creditors who were present at last Thursday’s court hearing said they supported the scheme with some modifications, while the Revenue Commissioners said that they were neutral on the matter. Mr Justice Peter Kelly was told that a situation had arisen whereby court protection should be lifted for one of the companies in the group, a non-trading leasehold company, Stanway Holdings Ltd. “At worst” this would affect 15 jobs in two stores, in Phibsboro and Tallaght. The judge made the order lifting protection.
Niall O’Farrell
One of the stars of RTE television’s Dragon’s Den programme, Niall O’Farrell could lose up to €2 million in a mobile phone top-up firm that has gone into liquidation. “Dragon Burnt By Top-Up Flop”, the Sunday Times said. The Blacktie owner invested €1.5 million in equity and €500,000 in mezzanine finance in 2006 in Phonecard Warehouse, a supplier of top-up terminals. He served the company with a Section 214 notice last week, giving it three weeks to repay €485,000 he says he is owed. The directors of Phonecard subsequently applied to the High Court to approve the appointment of Ken Fennell of Kavanagh Fennell as provisional liquidator.
Phonecard Warehouse was set up by Eleanor McEvoy in 1999 and it grew to register a turnover of €40 million. The top-up business has come under increasing pressure.
LEISURE
Killeen Castle
The slump in the leisure and tourist industry has bunkered part of the plans to build a golf resort at Killeen Castle in Co Meath. “Luxury Hotel Lost As Killeen Golf Resort Finds The Rough”, the Sunday Times reported. Starwood Hotels and Resorts, which runs the Westin in Dublin and the Sheraton in Cork, has pulled out of an agreement to build a “Luxury Collection” hotel at the resort being developed by Joe O’Reilly, the man behind the Dundrum Town Centre. The move comes after the developers scaled back the project.
The €240 million resort development near Dunshaughlin has also slashed golf membership fees by up to 90 per cent. Entrance fees, originally set at €50,000, have been reduced to €5,000, with annual payments of €3,850. Development work on the resort’s 165 on-course houses, which were to have cost up to €7.5 million apiece, has been put on ice. Roddy Carr, a director of Killeen Castle, was quoted as saying that the original business plan for the development is no longer relevant.
Hotel Asset Management Services/ Tulfarris
Ronan King, a former partner in the BDO Simpson Xavier accountancy firm has set up a “rapid response unit” to run ailing hotels. Under the headline “Hams Helps Ease Tulfarris Pickle”, the Sunday Times says Hotel Asset Management Services (Hams) was incorporated just last month to profit from the expected carnage in the hotel industry. One of Hams’s first undertakings was the reopening at the weekend of Tulfarris, Paddy Kelly’s Co Wicklow hotel and golf resort.
Hams will operate hotel casualties of the recession until they are sold on and it then takes a cut of any uplift. “It is a microcosm of what the National Asset Management Agency has to do,” said King, who is also a past president of Dublin Chamber of Commerce and a director of Ballymun Regeneration. Others involved in Hams are Jim Murphy, head of the hotel operator Prem Group, and its commercial director Stephen Loftus, with Cormac Megannety, a quantity surveyor and ex-Euroscape chief.
Obviously determined to put a positive spin on its role in the tourist and leisure industry, Hams says, in its pitch, that “the true value of a hotel is generally established on its third liquidation”. On that basis Tulfarris is something of a success. This is the resort’s second receivership.
www.irishtimes.com
www.sbpost.ie
www.tribune.ie
www.sundaytimes.ie
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