Business

High Court appoints provisional liquidator to firm that secured loans through cash-for-visas scheme

Appointment made in respect of Dublin-registered Clonmannon House Retirement Village Limited, which acquired Clonmannon House and surrounding lands in Ashford, Co Wicklow

The Four Courts. The High Court has appointed a provisional liquidator to a company set up to develop a Co Wicklow property into a care facility/nursing home

Aodhan O'Faolain
Thu Apr 11 2024 - 16:34

The High Court has appointed a provisional liquidator to a company set up to develop a Co Wicklow property into a care facility/nursing home.

The appointment was made in respect of Dublin-registered Clonmannon House Retirement Village Limited, which acquired Clonmannon House and surrounding lands in Ashford, Co Wicklow.

The application to appoint insolvency practitioner Declan De Lacy as the firm’s provisional liquidator was made by Beijing-based Yi Yuan, who claims to have loaned €1 million to the firm in 2020 as part of the Government’s immigrant investor programme.

That programme, which was scrapped last year, allowed people investing at least €1 million in Ireland to obtain visas to reside here.

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Represented by Sally O’Neill BL, instructed by solicitor Aisling Murphy of O’Shea Barry Solicitors, the petitioner believes the company is insolvent and unable to pay its debts as they fall due.

Counsel said her client is owed just over €1.17 million by the company, which became due and owing last August, but has not been repaid.

Her client had become concerned after another investor in the company launched legal proceedings alleging that the company had not repaid them a sum of €1.3 million.

In reply to those proceedings, the company’s director, Candance La Fleur, had sworn an affidavit containing matters Ms O’Neill’s client says are not true.

Ms LaFleur, it is claimed, said that €100,000 had been paid to an investor, which the petitioner says referred to her.

The petitioner says she has received no payment whatsoever from the company in respect of what is due to her.

It was also averred in the sworn statement by Ms LaFleur, alleged to reside in Canada, that the petitioner had agreed to allow the company to sell its asset, to write down her debt and to delay repayments of the initial investment.

The petitioner, counsel said, had not consented to any write-down of her debt or the delayed repayment.

The petitioner never agreed to a proposal to sell the asset and had informed Ms LaFleur that such terms offered by the company were impossible to accept.

The petitioner is also concerned the company had only paid €1.9 million for the Co Wicklow property, despite the contract price being €2.15 million.

The purchase was not closed, and it is feared the property was not transferred to the company’s ownership, it is claimed.

In her affidavit, Ms Lafleur had further stated that the company wished to sell the property for a sum of €4 million to be paid over nine months, and that the investors would be repaid during that time.

If the sale did not go ahead then the company would have to go into liquidation, it was also claimed by Ms LaFleur.

Counsel said in addition to those concerns the firm’s failure to comply with its Irish company law obligations to file annual returns, have a company secretary in place, and for the director to reside in the EEA why her client was seeking the appointment of provisional liquidators.

No adequate reply from the company has been received, counsel added.

Mr De Lacy was appointed as provisional liquidator by Mr Justice Mark Sanfey, who noted that an application was due to be made before the court early next week to have the company wound up.

However, in light of the evidence before the court the judge said he was prepared to appoint a provisional liquidator even if it is only for a short time.

Those proceedings return before the court next Monday.

The company is also the subject of separate proceedings brought earlier this year by one of the other three investors who put €1 million in the firm in 2019.

In January Ms Li Sun secured a temporary freezing order restraining the company from disposing of any money received by it in relation to any sale or disposal of the defendant’s assets or shares.

The Clontarf-based Ms Sun sought the order over concerns about her investment and fears that she will not get the €1.3 million she says she is entitled to under the terms of the agreement she entered into with the company.

She claims that she has not been given a full set of the defendant’s accounts, and from the information she has been provided with, says she has serious concerns about payments made by the company.

She also claims that significant payments have been made by the company without any proper explanation to her.

She claims the defendant has said that the money was paid to an architect, builders and surveyors.

Ms Sun claims she made a demand on the company for payment of the money she says she is owed, but says she has not been repaid.

All claims of wrongdoing in those proceedings have been denied by the company.

That action remains adjourned and will be mentioned before the court next week.

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