Sat, Dec 22, 2012, 00:00

Inside the world of business

Liquidator taking stock of ISE move

The liquidator of Bloxham Stockbrokers, Kieran Wallace of KPMG, is faced with something of a dilemma following the Irish Stock Exchange’s decision to terminate the firm’s membership.

The decision, which comes seven months after the collapse of the business, reflects the fact that company has ceased trading and has no realistic prospect of resuming trading.

However, the consequences of the decision are quite serious for Wallace and Bloxham’s creditors, including National Irish Bank, which is owed €8.5 million. The termination of its membership means Bloxham will not share in any windfall following the expected demutualisation of the 219-year-old exchange.

The demutualisation, which is expected early next year, could have been worth as much as €6.3 million to the firm, according to its statement of affairs filed in the courts last summer.

Its share will presumably be spread among the remaining six member firms or “guarantors” as they are formally known. The firms – Campbell O’Connor, Dolmen (recently bought by Cantor), Goodbody, Davy, NCB and RBS – are in effect the shareholders and hold six of the seats on the 12-strong board.

Wallace will have to decide whether to challenge the decision to revoke Bloxham’s membership. The basis of any challenge is likely to be that while the exchange has the right to review the membership of a firm that has not been trading for six months, it is not necessarily obliged to boot it out.

The speed of Bloxham’s ejection and the backdrop of the demutualisation will no doubt be fertile ground for lawyers looking for a review or injunction. Any move in this direction by Wallace will almost certainly stall the demutualisation and the windfall the other stockbrokers have been banking on. With this in mind Wallace – and the Bloxham creditors – may be better served by trying to do some sort of deal with the other firms. They may well be tempted to cough up a few million to ensure their pay day is not delayed.

The secret to Ireland's success with food

This has proved to be another strong year for the food industry here, with Irish-listed food companies enjoying revenue and profit growth.

That is no mean feat in the midst of a recession that has severely dampened consumer sentiment.

The secret to Ireland’s success has been the repositioning of itself as a producer of value-added products, and research and development-driven activity, rather than an exporter of bulk commodities.

The decision by Greencore to buy British sandwich maker Uniq and move its listing to London, proved prescient, with the company posting strong full-year results last month.

Greencore’s success is all the more impressive given its focus on the tough consumer retail sphere.

Meanwhile, Kerry and Glanbia’s strategic decision to explore the ingredients and nutritionals space over the past decade has reaped dividends, and both companies are now market leaders in their fields.

Kerry Group’s announcement that it is to build a research and development centre in Kildare, was one of high points of the year from the perspective of jobs.

This was also a particularly transformative year for Glanbia. The company finally secured a solution to a conundrum that has niggled away at it since its formation: how to negotiate the sometimes conflicting priorities of the plc and its majority owner, Glanbia Co-op.

After stating emphatically in 2010, following the defeat of the proposal to demerge Glanbia Co-op from the plc, that there was “no plan B”, Glanbia showed that in fact there was another option.

The complex, nuanced deal that was proposed and ultimately accepted by Glanbia Co-op was an example of how compromise and negotiation can deliver sensible results. It remains to be seen how Glanbia settles in to its new corporate structure, which effectively comprises three distinct strands: Glanbia plc, Glanbia Co-op and Glanbia Ingredients Ireland, the joint venture between the two groups. What direction each of these three entities take in 2013 will be the defining question for the company in the coming year.

Banking on bankruptcy in the UK

You’ve reached a sorry pass when the aim of a long drawn-out court case is to facilitate being declared bankrupt rather than to avoid it.

Solicitor and landlord Brian O’Donnell and his wife, Dr Mary Patricia O’Donnell, who want to be declared bankrupt under UK law rather than in the Republic, have failed to convince a British court that the main centre of their property business is London.

Had they done so, it would have paved the way for them to seek a bankruptcy declaration against them in the UK.

The key difference between the two legal systems is that the O’Donnells would have been discharged in one year in the UK, rather than the 12 it takes in the Republic – or even the three years that will apply here under new legislation currently awaiting enactment.

The pair could well appeal yesterday’s ruling. In that case, the process could take long enough that, if they were to lose, the Republic’s new personal insolvency laws will be on the statute books, opening up the possibility that they could avail of the easier regime here.

Either way, it is clear that the days of forum shopping for the easiest bankruptcy option are coming to an end. The UK and its courts do not want the jurisdiction to get a name as a convenient place to go to deal with your debts.

It is equally likely that the Republic’s courts are not too happy at the sight of citizens heading off to another jurisdiction to sort out their problems.

Part of the problem is the Republic’s archaic bankruptcy regime. This will shortly be rectified, and that move, combined with a tougher approach in the UK, should end one of the recession’s more bizarre sights, that of once-wealthy people attempting to convince a court that they ought to be bankrupted.


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