Cavan Crystal petition close to conclusion
The hearing of a petition for the appointment of an examiner to the Cavan Crystal Glass company, which employs 80 people and is presently in receivership, is expected to conclude in the High Court today.
A decision on the application may be given by Mr Justice Kelly at the close of today's hearing, but may also be reserved.
The court was told yesterday that the company owes debts of some ú350,000 to the Revenue Commissioners. Ulster Bank is owed more than ú700,000 while Bord Fβilte has invested more than ú350,000 in the company, subject to several conditions.
The petition for an examiner was moved by Mr Neil McKay, managing director of the company and Mr John Maher, a director, after Ulster Bank appointed a receiver to the company earlier this month. The receiver has ceased to act since the petition was moved.
The petition came for hearing before Mr Justice Kelly last week and the hearing resumed yesterday.
Concluding his submissions in support of the appointment of an examiner, Mr Bill Shipsey SC, for the petitioners, said his clients did not concede the company was in a catastrophic financial position.
There was an identifiable possibility of survival for the company, counsel submitted. This was based on its trading history which showed a profit of some ú250,000 in its first year, on the fact that losses sustained in the second year were exceptional and on evidence showed the company was breaking even or making a modest profit since August 1997.
With its investment in a new visitors' centre in Cavan town and the development of its Paul Costello glassware range, the company was on the threshold of earning profits, counsel said.
Mr Shipsey also submitted that Ulster Bank's interests would not be significantly damaged by the appointment of an examiner who would report back to the court within 21 days. He also noted the Revenue Commissioners were not opposing the petition while Bord Fβilte was supporting it.
Mr John Gleeson, for the receiver, said the petition was defensive and was presented only in response to the appointment of a receiver.
He said warning bells about the company's position had been sounded in January and February last and the petition did not have the unqualified support of the board of the company.
It was the receiver's view that the promises of funding were not adequate to bring the company through a full examinership. Counsel also noted that much emphasis had been placed on the visitors' centre but he said the success of that project was a matter of some speculation.
Mr Gleeson said the company was presently working a three-day week and its cheques were being dishonoured. It was difficult to see how certain projections about future profitability had been made.
The receiver was of the view that the evidence before the court was insufficient to give the court confidence there was a reasonable or viable prospect of survival.
Opposing the petition, Mr Michael Collins SC, for Ulster Bank, submitted the petition itself was not properly constituted and there was no provision by which it could be amended and properly put before the court.
Counsel said the bank believed there was no long-term plan for the company and claimed the statement of affairs submitted by the directors showed a more optimistic picture than the audited accounts of the company of August 1997. He said projections for the visitors' centre were low and that sort of contribution to profits would not turn the company around.
There was nothing before the court to outline how the company might be saved, Mr Collins said. There was no reference to any financial institutions being willing to put up money.
Ms Grainne Clohessy, for the Revenue Commissioners, said her clients were owed ú350,000, of which ú150,000 was a preferential debt. There was no tax clearance certificate in place and there would not be one unless an agreement regarding arrears, current tax and interest was reached.
Counsel for Bord Fβilte, Mr John O'Donnell, said his client was supporting the petition. It had invested ú350,000 in the company and was anxious to support the jobs and enterprise represented by the company. Bord Fβilte was also anxious to support it because of the tourism potential of the visitors' centre.
Mr O'Donnell said the board was a contingent creditor. The monies it had advanced to the company were subject to certain conditions including possession of a tax clearance certificate. No demand had been made to date, he said.