A social housing construction firm hit by the rise in raw material costs has entered liquidation after a rescue package fell through on Thursday evening.
Court protection afforded to Blacklough Construction Limited since it entered examinership last November was due to expire next week, the High Court heard.
Blacklough, which has debts of more than €3 million, said it got into difficulties due to the unprecedented rise in the cost of building materials, Covid-19, Brexit and the war in Ukraine, among other factors.
Solicitor Graham Kenny, representing examiner Joseph Walsh, of JW Accountants, told the court on Friday that an investment deal had been near completion but, to the surprise of Mr Walsh, the proposed lender pulled out at about 5pm on Thursday.
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The planned funder was a subcontractor involved in the development of some of the social housing projects Blacklough was also contracted for, the court heard. Mr Kenny added that the lender stated it had a preference for directly taking over Blacklough’s works rather than funding Blacklough.
The lender’s withdrawal made it clear to the examiner he would be unable to secure a scheme of arrangement for the firm within the statutory time frame governing the examinership process, said Mr Kenny.
The examiner believed it was now appropriate for the court to remove its protection and to make orders winding up the company, which had 48 employees and also engaged subcontractors.
Mr Kenny said a history of asset thefts and intimidation of Blacklough staff caused concern about any gap between the examinership process and the appointment of a liquidator.
He believes the court’s involvement put a stop to these incidents, so he was asking for the appointment of a liquidator to be made immediately.
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Blacklough, through its counsel Ross Gorman, said it accepted it is no longer possible for the examiner to secure a rescue package. It thanked Mr Walsh for his efforts and asked the court to appoint him as liquidator.
The Revenue Commissioners, which is Blacklough’s largest creditor and has a preferential debt, was not objecting to the appointment. Revenue’s counsel, Sally O’Neill, said her client was given very little notice about the application, so the parties have agreed she will be allowed to apply to the court if any issue arises.
Mr Justice Michael Quinn made an order under section 535 of the Companies Act 2014 winding up the firm, for which Tara King, from Naas, Co Kildare, was the sole director. He appointed Mr Walsh as liquidator.
The judge added that he was “sorry that is the future of the company ... but I hope the projects can progress in their own way”.
Blacklough, with an address at Rathcoole, Co Dublin, was involved in building more than 360 social housing units at five sites in counties Dublin, Meath, Westmeath and Louth when it applied to the High Court last November for the appointment of an interim examiner.
The projects were worth €65 million to Blacklough, which said it had completed works valued at €31 million. However, a 33 per cent rise in raw material costs and other factors caused the firm to sustain €1.7 million losses, it said.
Previously, the court heard 30 individuals wearing face coverings had allegedly removed assets from a Blacklough-operated site last November 23rd, with on-site security unable to control the situation. There was an alleged attempted theft of assets that were being transported on a public road on December 14th. This event left a company employee “badly injured”, the court heard.
On other occasions employees were allegedly intimidated by individuals at a Blacklough site, while a €50,000 asset was allegedly removed from another location, the court was told.
On Friday Mr Kenny said there were no further incidents after the examiner reported this issues to the court in late December.
The proceedings were adjourned to a date in March.
