Altada staff to resign after second bid for company accepted

High Court heard on Wednesday that employees would walk away if US businessman Jeffrey Leo took over insolvent company

The High Court on Wednesday appointed John Healy of Kirby Healy Chartered Accountants as official liquidator to the Cork-based business, which collapsed in recent months after running into financial difficulties last year. Photograph: iStock

The directors and remaining staff of Altada Technology Solutions, the Cork-based artificial intelligence company that collapsed into liquidation, have informed the company’s liquidator that they will be leaving the business after a bid by a former investor for the troubled company’s assets was accepted on Thursday evening.

Jeffrey Leo, a US businessman and former Morgan Stanley banker who was an original investor in Altada, has agreed a deal to buy the company out of receivership through his company Datech over a rival bidder, Eoin Goulding.

Before Christmas, Mr Leo successfully petitioned the High Court to have Altada wound up and have John Healy of Kirby Healy Chartered Accountants appointed as provisional liquidator. Mr Healy’s appointment was confirmed in court on Wednesday morning.

However, Mr Goulding, a Dublin-based tech entrepreneur and group president of cybersecurity firm Integrity360, had entered a contract with the receiver, Nicholas O’Dwyer of Grant Thornton, on Tuesday evening to buy the company’s assets through his investment vehicle Cometgaze.

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Although Mr Goulding was not named in court, the High Court heard that Cometgaze was the preferred bidder for Altada because the remaining staff would walk away from the business if Datech’s bid was successful. This was despite the fact that Datech’s bid was higher than Cometgaze’s.

The Irish Times understands that on Thursday evening, about 20 staff members – some of whom have not been paid for at least five months and are owed a total of close to €637,000 in back wages – told the company’s liquidator that they would not continue to work for Altada when its assets are transferred to Datech.

Graham Kenny, a solicitor representing Altada, told the court on Wednesday that the employees and the directors “are the intrinsic value” of the once vaunted tech company, which predicted at the start of 2022 that it could achieve a $1 billion valuation. Mr Kenny said there is “effectively no value” in the insolvent company – which has estimated realisable assets of €849,261, according to the liquidator’s provisional report – other than the “know-how” of the staff and the directors.

He said there was “a named party” linked to Datech with whom the employees had indicated they would not work.

It is understood that Cometgaze does not consider the acceptance of the Datech bid as final and may continue to pursue its bid after signing a contract with the receiver earlier this week.

Mr O’Dwyer had agreed not to conclude the sale by 4pm on Thursday and the matter is listed again for hearing next Monday morning before Mr Justice Brian Cregan. The parties have also agreed not to disburse any funds from the sale until January 27th.

People with knowledge of the matter told The Irish Times earlier on Thursday that even if the sale is finalised, it is unlikely to resolve numerous related issues arising from the company’s collapse.

The Revenue Commissioners, which has a €1.6 million preferential claim against Altada, had threatened to object to the sale to Mr Goulding on the basis that Mr Healy’s preliminary report on the company’s affairs raised questions about the lawfulness of the receiver’s appointment and the €500,000 loan charge underlying it. Barrister Declan Murphy, for the receiver, told the court that there is a “brewing row as to whether [Mr O’Dwyer] will be entitled to give all or any of the money to the debenture holders”.

Separately, the liquidator raised “weighty concerns” about certain items of expenditure and the use of company funds by directors, including round sum expense payments and payments related to travel, the court heard.

The sale of the Altada’s assets will not preclude Mr Healy from carrying out further investigations into the conduct of the directors in the months leading up to its ultimate collapse.

Mr Goulding and the company’s cofounder and director, Allan Beechinor, could not be reached for comment on Thursday.

Ian Curran

Ian Curran

Ian Curran is a Business reporter with The Irish Times