Altada ‘imploding’ as employees take stand against takeover bid

Row over US businessman’s offer adds layer of complication to difficult situation

The High Court appointed an official liquidator to the ailing Cork-based artificial intelligence company Altada this week. File photograph: Getty Images

Senior employees of Altada Technology Solutions, the ailing Cork-based artificial intelligence company that collapsed into liquidation in recent weeks, say it is “imploding” after a number of workers, many of whom have not been paid for five months, said they would walk away from the business if a bid for the company’s assets is successful.

Speaking to The Irish Times, one employee said that they and their co-workers are “standing firm” against an offer for the company led by Datech, a business controlled by US businessman Jeffrey Leo.

The former Morgan Stanley banker, an original investor in Altada, is understood to be leading a consortium that includes other Altada investors Elkstone Partners and US company Rocktop partners as well as former Formula One boss Eddie Jordan who want to take control of the once-vaunted tech company. A receiver was appointed to Altada in November last year on foot of a €500,000 loan secured against the assets of the then-insolvent company before Mr Leo moved to have a provisional liquidator appointed to Altada in December.

Earlier this week, The Irish Times reported that the receiver, Nicholas O’Dwyer of Grant Thornton, had accepted a bid for Altada from Dublin-based tech entrepreneur Eoin Goulding, understood to be in a range between €3 million and €5 million.

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Although his bid was understood to be lower than Datech’s, the High Court heard that Mr Goulding’s vehicle, Cometgaze, was the preferred bidder for Altada’s assets because employees had stated that they would refuse to be transferred along with the company’s assets to Mr Leo’s business.

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On Thursday, it emerged that Mr Leo’s bid had been accepted by the company’s liquidator, John Healy of Kirby Healy Chartered Accountants. At a meeting with the liquidator, Altada employees reiterated their position.

The move adds a layer of complication to an already difficult situation. On Wednesday, the court heard from Graham Kenny, a solicitor representing Altada, that the employees and the directors “are the intrinsic value” of the insolvent business, which had “effectively no value”.

The business was described as “a melting ice cube”, depreciating in value as it awaited the conclusion of wrangling over its future while its employees, who are owed almost €637,000 in back wages, remain unpaid.

On Friday, one employee of Altada told The Irish Times that they and their colleagues had remained with the company without pay because they “believed in the technology”.

‘Worked very hard’

The employee said that a lot of the workers who have remained with the company are from India. Altada, they said, had “worked very hard, making sure that their visas and everything else are okay”.

However, they claimed that they have not received reassurances about their future from Mr Leo and as such, they were unwilling to remain any longer.

Mr Leo could not be reached for comment on Friday. He told the Business Post on Thursday that he was “hopeful that existing employees of the company will stay on under new management”.

Questions remain about the circumstances which led to Altada’s demise. In his preliminary report on the company, 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 matter returns to the High Court for mention on Monday.

Ian Curran

Ian Curran

Ian Curran is a Business reporter with The Irish Times