An application to wind up Irish Asphalt Ltd has opened before the High Court.
James Elliott Construction has petitioned for appointment of a liquidator to the firm, part of the Lagan Group of companies, over an alleged unpaid debt of some €2.4 million.
The petition is opposed by Irish Asphalt Ltd (IAL), directors of the firm and a related entity, Lagan Holdings Ltd, IAL’s largest creditor.
They claim JEC has an ulterior motive in seeking to have the company liquidated in that liquidation will give JEC a tactical advantage in separate 'deceit' proceedings by JEC against IAL, its directors Kevin and Terry Lagan and John Gallagher, and another related entity, Lagan Cement Group Ltd.
JEC denies it has an ulterior motive.
The debt at the centre of the winding up petition relates to a High Court judgment JEC obtained against IAL in 2011. That judgment arose from IAL's supply to JEC of stone infill with excessive amounts of pyrite used in the Ballymun Central Youth Facility building in Dublin, which later had to undergo major repair work.
That ruling was appealed to the Supreme Court, which in turn referred issues of law arising out of it to the Court of Justice of the EU (CJEU). The appeal was later dismissed by the Supreme Court and the CJEU findings did not benefit IAL's position.
The petition hearing opened on Tuesday before Mr Justice Tony O’Connor and is expected to run for some days.
Moving the petition, Patrick Leonard SC, for JEC, argued it was “just and equitable” that IAL, which was accepted to be insolvent, was wound up. His client wanted an official liquidator to investigate the company’s affairs going back over a decade when litigation concerning pyrite first emerged.
At an overall level, the net assets of IAL fell from a high of €43m in 2009 to a net liability position of €9.9m in 2015, he said.
Counsel said JEC had discovered IAL had in 2010 paid out a dividend of over €3.7m while it had in 2012 transferred its business plus its employees to a related firm Lagan McAdam Ltd. Those and other matters could be investigated by a liquidator.
Counsel said IAL denies that those moves and other measures merit any investigation.
John Gleeson SC, for IAL, said it and others in the group underwent re-organisation following the economic recession.
The company, directors and Lagan Holdings want JEC’s application dismissed or in the alternative stayed until the deceit proceedings have been concluded, the court heard.
In the deceit action, JEC is seeking damages from the defendants, plus an indemnity in relation to other proceedings taken against it over pyrite. JEC alleges it was supplied by the defendants with products which they knew contained pyrite.
Those claims are denied. That case is due to commence in November and to last for 20 weeks.