Clerys liquidation facing High Court challenge

A formal challenge to the liquidation of OCS Operations, the trading company of Clerys department store, is expected to emerge in the High Court today.

The KPMG joint liquidators to the company are due to give an update to the court this morning on their progress in the winding-up, which was initiated after OCS collapsed when Clerys was bought by the Natrium consortium led by D2 developer Deirdre Foley in June.

It is understood a company linked to businesswoman Lorraine Sweeney, who owned the cafes at Clerys, is planning to make an application to the court at the same time as the liquidators.

The exact nature of Ms Sweeney’s application and objections will remain under wraps until legal documents have first been presented to the court, and she declined to comment on the court application.

Separation of assets

She has previously criticised the way the Clerys closure was handled, however. In September, Ms Sweeney’s LS Catering confirmed it had written to a number of parties to put them on notice that it would file legal action to try and reverse the separation of Clerys’ property and trading assets.

Ms Sweeney has previously called for the pooling of the Clerys property assets, which were put into a separate company in 2012, with the trading assets of OCS Operations to defray the debts owed to creditors of the department store.

Among those to have previously received correspondence from LS Catering are the KPMG liquidators, Ms Foley's Natrium consortium that bought Clerys for €29 million, the US private equity company Gordon Brothers that sold it, and Jim Brydie, a UK-based insolvency specialist who bought OCS Operations for €1 on the day the entire business was sold and put in liquidation.

Heavy criticism

More than 400 staff members lost their jobs with no notice on the day of the sale, leading to heavy criticism from unions and the Government over how the closure was handled.

The liquidators handed over control of the building to Natrium at the end of the summer. Clerys has remained shuttered since the consortium, comprising Ms Foley and London financier Cheyne Capital Management, bought it. In recent weeks there has been activity on the site behind closed doors.

Natrium is putting together a planning application for the site that is thought to include a retail concourse or mall with the possibility of a hotel on the upper floors of the building.

Ms Foley is also thought to want to combine the Clerys site with some of the other surrounding buildings to give greater scale to the redevelopment.