Cork firm faces court over debts

A Co Cork company, specialists in the development of retirement villages that include nursing homes and medical centres, is unable to meet its debts, the High Court was told yesterday.

Mr Bernard Dunleavy, counsel for HC Developments Ltd, Convent Road, Clonakilty, told Mr Justice Eamon de Valera that until recently it was a profitable company which from a standing start in 2001 had developed successful retirement villages at Clonakilty and Dungarvan, Co Waterford.

He said it had run into financial difficulties in a €41 million development at Longwood Road, Trim, Co Meath, where it was in the process of constructing 48 two-bed houses and apartments, a medical/surgical centre and a 120-bed nursing home.

The company was in debt to the tune of €9.8 million and unable to meet its bills.

Mr Dunleavy, who appeared with Mr Hugh Kane, of Lennon Heather Solicitors, said the company through its directors, Dan and Kathleen Lordan, of Convent Road, Clonakilty, sought the protection of the High Court from its creditors through the appointment of an interim examiner in a bid to salvage the company as a going concern.

He said the main secured creditor was Bank of Ireland. Monies were also owed to Torque Group Ltd, which owned adjoining lands required to complete the development, and PJ Hegarty and Sons, builders, which had already carried out €5.5 million worth of works and had been paid only €330,000.

Mr Dunleavy said LHM Casey McGrath, an independent company of accountants, had reported that through examinership there was a reasonable prospect for survival of the company as a going concern, and potential investors had already flown in from the United States and would be viewing the Trim development today. Judge de Valera appointed Mr Michael McAteer, of Foster McAteer, accountants, as interim examiner and adjourned the consideration of his appointment as full-time examiner until September 6th.

Dan Lordan told the court the Bank of Ireland had suggested purchase of the Trim site and had sanctioned a loan of just under €4.5 million. The development land was bought for €4.4 million. The bank later declined to extend finance unless the company could secure an investor willing to put up €4 million. The company found itself committed to the project and overexposed to the bank before the limitations of the bank's commitment had become apparent.