Developer faces jail for failing to comply with receiver

A PROPERTY developer faces jail for failing to co-operate with the receiver appointed to his companies.

Mr Justice Peter Kelly yesterday warned Mervyn Walsh, a director of three building development companies, who breached court orders to give full details of the companies accounts to a receiver, that he would definitely go to jail for contempt unless he complied with orders within weeks.

Mr Justice Peter Kelly also indicated that Mr Walsh, with addresses at Lansdowne Village, Ballsbridge, Dublin, and in Monaco, may face future proceedings by the Director of Corporate Enforcement given the “poor state” of the accounts of his companies, two of which are in receivership with debts of some €30 million.

The judge made the remarks when dealing with proceedings by Declan Taite, the receiver of Largreen Ltd and Sherside Ltd, alleging contempt by Mr Walsh of court orders aimed at procuring full information on the companies accounts and facilitating the sale of houses on estates in Wexford and Portlaoise built by another of Mr Walsh’s companies, Event Horizon Ltd.

Mr Taite was in December last appointed receiver over Largreen and Sherside by Bank of Ireland and later that month took court proceedings against Mr Walsh, his sister Dorcas Walsh and Event Horizon Ltd, which is involved in the building developments in Portlaoise and Wexford and of which Mr Walsh is also a director, in which a settlement was agreed.

Mr Taite later alleged breach of that settlement.

The matter was transferred to the Commercial Court and various orders were made by Mr Justice Kelly on January 23rd last requiring specified steps to be taken before the full hearing in June next, including providing the receiver with full details of the companies accounts.

In light of alleged contempt of those orders, Rossa Fanning, for Mr Taite, yesterday brought a motion for attachment and committal to prison of Mr Walsh for contempt. Mr Fanning said the breaches were frustrating the receiver’s efforts to sell houses this year.

Bernard Dunleavy, for Mr Walsh, said his client conceded failures on his part and regretted those.

Mr Walsh did not have answers to many of the queries raised by the receiver over the accounts, including about large numbers of cheques drawn, but was prepared to give various undertakings to the court, including to meet the receiver to answer queries and to try and get microfiche copies of cheques.

In an affidavit, Mr Walsh said he had given the receiver all the information he had relating to the accounts and had made efforts to get information from others no longer involved with the companies.

Mr Walsh said he was under considerable pressures as he was being sued by Bank of Ireland for some €4 million on foot of personal guarantees and had to contend with a multiplicity of actions and threats of actions against Event Horizon and himself.

He also said the receiver’s actions were frustrating house sales.

Mr Walsh acknowledged he was “delinquent” in complying with the terms of the court orders but said this was not due to any wilfulness.

Certain aspects of the orders were now complied with and other aspects were being dealt with to the extent it was practicably possible. He was at a distinct disadvantage as he believed the bank would use its superior resources to ensure he “capitulates” and is met with personal liability for several millions.

Mr Justice Kelly said there was scant observance by Mr Walsh of his obligations and such compliance as there was came late in the day and under pressure from the receiver. This was a serious matter where jail was probable and while there was an apology, if contrition was to be genuine it had to have a purpose of amendment.

There was now a late proposal to do many of the things Mr Walsh was in any event obliged to do.

The judge warned Mr Walsh that if there was any failure to comply by May 19th with various orders and undertakings now being specified, he should be “under no illusion” but he would go to jail.

The orders include that Mr Walsh meet the receiver on May 14th to answer questions and co- operate with efforts to sell houses.

Earlier, Mr Fanning said his side were not seeking committal orders against Dorcas Walsh as she had no major role in the companies. A medical certificate was also provided on her behalf.

The judge said all company directors had obligations and he was not impressed by the “thoroughly unsatisfactory” certificate which referred only to Ms Walsh having extreme back pain and diabetes, which should not prevent attendance at court.

As the plaintiffs were not pressing for any order, he would make no order against her.