Cork company Ban Ard Cash and Carry Ltd was wound up by order of the High Court yesterday after it heard it had sold its assets to another firm despite owing creditors close to €2 million.
Ms Justice Laffoy was told some 11 companies were owed €1.9 million by Ban Ard, which had registered offices at Ballycurreen Industrial Estate, Airport Road, Cork. The judge said it appeared Ban Ard was now a shell company.
The judge was told Ban Ard had sold its assets, trading stock, staff and customer information into a new subsidiary company last June and then sold its shares in that subsidiary company to Mangan Wholesale.
The petition for the winding up of Ban Ard was brought by soft drinks supplier C&C, which said it was owed €323,516. Its petition was supported by 10 other companies including Coca-Cola (owed €451,960), Gallaher Ireland (owed €280,744), John Player and Sons (owed €246.159) and Cadbury (owed €316,065).
In an affidavit, Mr John O'Connor, C&C's finance director, said his company was very concerned at the purported transfer of Ban Ard assets to Mangans in the apparent absence of any provision having been made to discharge the significant outstanding indebtedness due to C&C.
While it had been confirmed that Ban Ard had sold its fixed assets, trading stock and customer information to Mangans, it appeared the amount to be received by Ban Ard had yet to be determined and finalised.
Mr O'Connor said he was extremely concerned that Ban Ard seemed to have ceased trading and had purported to divest itself of a significant proportion of its assets apparently without regard to its liability to C&C.
On June 16th last, C&C had received a letter from Mangan Bros Ltd indicating that Ban Ard had agreed to transfer its business to a new Mangans subsidiary company as and from June 17th.
The letter stated that Mangans was willing to guarantee payment of all stock delivered to Ban Ard since June 9th and invited creditors to submit details of retention of title claims in respect of stock on the company's premises as at June 4th.
On June 23rd, C&C received a letter from Mangans confirming that, as and from June 21st, Ban Ard's business was 100 per cent owned and operated by Mangans. Mangans indicated that all goods on Ban Ard premises on June 9th held under retention of title would be paid for in full.
Mangans also confirmed that payment for all goods supplied from June 9th would be underwritten by Mangans and paid for in full. In relation to amounts due to creditors as at June 8th not covered by retention of title, Mangans indicated such amounts remained a liability of Ban Ard.
The Ban Ard premises at Ballycurreen had been disposed of in December 2003 and the proceeds remitted to Ban Ard at that time.
Mr O'Connor said it was evident in a letter from Ban Ard on June 24th which stated that "a shortfall will exist in terms of supplier settlement" that the company was clearly unable to pay its debts and was insolvent.
The letter had indicated its intention to "determine whether settlements could be reached by way of a scheme of arrangement with suppliers and creditors...".
Mr Declan O'Sullivan, managing director of Ban Ard, had, in a letter to C&C dated June 24th, said the primary object during all negotiations was job security for staff who could potentially be retained and the maximisation of settlements that could be made to creditors and suppliers "in whatever amount could be achieved".
Ms Justice Laffoy made an order winding up the company and appointed an accountant, Mr Kieran Wallace, as liquidator.
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