The big players
Who they are
Ernst & Young
Big construction and property failures loom large on the list of cases which David Hughes, head of Ernst Young’s insolvency and corporate restructuring division has dealt with.
Hughes has 25 years’ experience of working in this field, both at Ernst Young and its predecessor firm, which means that the recession is the second of his career.
He is has charge of part of Liam Carroll’s Zoe Developments-Danninger empire, which includes property occupied by multinational Google on Barrow Street, a range of office buildings whose tenants include the State and a large number of apartments.
Hughes says the apartments are largely rented out and 92 per cent occupied. Bank of Scotland appointed him over the assets against which it has secured loans. The bank is owed around €320 million against the properties.
More recently, Bank of Scotland appointed him and his colleague at Ernst Young, Luke Charleton, as receiver to Pierse Santry Cross, part of the Pierse building group that the High Court placed in liquidation last November. The company owns the former Prem Group Hotel in Santry, Dublin. He is also one of a number of receivers appointed to Pierse Contracting. That company is in liquidation, but the banks appointed receivers to protect their interests.
He is liquidator of Hugh O’Regan’s unfinished hotel development in Kilternan, Co Dublin and for the Diamond Coast Hotel in also Enniscrone, Co Sligo which continues to trade.
Another of his cases is Nortel in Galway, part of a global insolvency process. Its US parent filed for bankruptcy in the US in January last year. Hughes is responsible for the Irish arm, which includes four businesses. He says 300 jobs have been kept there.
Bill O’Riordan has been working on what has turned out to be a particularly drawn-out examinership, McInerney Homes, the Irish arm of the McInerney housebuilding group, to which he was originally appointed last September.
Last week, the High Court ruled against the rescue plan that he proposed and the court is due to make final orders relating to it today, although there is a possibility of appeal.
A longer-term task was the Taggart building business, whose businesses he took over in the Republic towards the end of 2008. The Co Derry-based group, owned by brothers Micheal and John Taggart, owed banks around €200 million. O’Riordan handled their operations in the Republic, while his Belfast-based colleague, Garth Callow, was appointed administrator in the North. The brothers are considering suing Ulster Bank, which has taken a claim against them.
Callow and O’Riordan were recently appointed to another developer, McWilliams, which is based in Dungiven and has a range of housing projects. It has debts of around €30 million. O’Riordan is also the receiver over many of the Liam Carroll developments on the northside of Dublin’s docks, including the half-finished building once destined to be the headquarters of Anglo Irish Bank.
He also has control over parts of the empire of John Fleming, and is receiver over the Fota Island Hotel and resort in Cork.
Tom Kavanagh & Ken Fennell
Tom Kavanagh and Ken Fennell, principals of Dublin firm, Kavanagh Fennell, are specialists in insolvency practice. They have a varied portfolio, including the high-profile receiverships of the development businesses once controlled by builders Liam Carroll and John Fleming. Fennell is receiver over Carroll’s Tallaght West in Dublin, made up of apartments, offices, retail and a hotel. He also has charge of parts of the ill-fated development that Fleming undertook in Sandyford. He is also responsible for Johnstown House Hotel in Enfield, which is owned by John Sweeney who is also a partner in the Shelbourne Hotel, and Niall Mellon’s Tramco in Rathmines, Dublin.
The firm was examiner to software development and technology services group, Calyx last year. Fennell’s partner, Kavanagh, sold the business and it is now trading as Unity. They also managed the examinership and sale of Buy Sell. Last year, Fennell was appointed receiver to Abbeyrock Technologies.
While Fennell believes the number of construction and property-related insolvencies is unlikely to keep increasing at the rate it did between 2008 and 2010, he says Nama is likely to start appointing receivers to properties owned by developers whose business plans fail to satisfy its advisers. Kavanagh Fennell is one of a number of firms on a panel put together by the State agency to handle its receiverships, although this does not guarantee work.
Nama, recently appointed David Carson as a super receiver to properties used to secure loans worth around €650 million that were owed by Liam Carroll’s Zoe Developments- Danninger group to the five Irish banks that are taking part in the rescue scheme.
Carson had already been acting as receiver over Bank of Ireland’s securities. Nama decided to try and simplify the process of untangling the web of loans, guarantees and cross guarantees that characterised Carroll’s business.
It tendered from amongst a group of practices that were already working on the case. Deloitte’s insolvency and corporate re-organisation arm, which Carson heads up, emerged as the winner. The others will remain in place, but the intention is to ultimately release them from their duties.
Carson found himself at the centre of a storm two years ago, when he was appointed receiver over Waterford Wedgwood, which included Waterford Crystal.
During his tenure, workers staged a sit-in at the Waterford plant in an effort to save crystal manufacturing in the city. The group was ultimately sold to private equity player, KPS, and while there is limited manufacturing at another site in the city centre, the plant itself has been closed.
Carson was also receiver of services group Newcourt, in which around 2,000 jobs were saved. He was also examiner to bookstore, Hughes Hughes, which was able to re-open most of its branches.
Carson is receiver to a number of companies in which developer Bernard McNamara was involved. He is also Bank of Ireland’s receiver over Pierse Contracting, the main Pierse company that the High Court placed in liquidation last year. The group owes Bank of Ireland more than €30 million. He is not the only receiver working on that group.
He prepared the independent report used in the initial hearing on the McInerney examinership, which is back in court today.
Horwath Bastow Charleton
Given that he’s Fine Gael’s director of elections in Limerick, Brian McEnery of Horwath Bastow Charleton’s national insolvency unit is likely to have other things on his mind today.
His firm’s unit is based in Dublin, but McEnery operates out of its offices in Limerick.
Creditors appointed him liquidator to Tom Hayes Ltd, one of the oldest building companies in the midwest. The firm had a reputation for the work it did on schools, colleges, churches and religious buildings, including Knock Shrine in Co Mayo.
A few weeks earlier, he took on a group of pubs, clubs and an off-licence in Galway, owned by well-known businessman, John Grealish, which he is hopeful can be sold.
One of McEnery’s higher profile cases was Murray Ó Laoire Architects. It had branches in Moscow, Tripoli and Barbados. The fact that it ran across jurisdictions made the task challenging, but it also smoothed the process, as the partners and staff in some of the overseas offices bought those operations.
McEnery says retailing and pharmacy, which will suffer from a fall in sales of consumers goods, will be particularly vulnerable this year.
Farrell Grant Sparks
Declan Taite landed one of the biggest and probably toughest assignments last November when Nama appointed him as receiver to Michael McNamara Co, the building contractor owned by Bernard McNamara.
McNamara himself was an active developer and has shares in the Shelbourne Hotel and the glass bottle site in Ringsend Dublin, but had stepped back from the business to protect it from the problems that surrounded his personal undertakings. However, the company’s business plan failed to convince Nama, and it appointed Taite.
This will bring challenges as it was a trading company that had building contracts in various stages of completion, a number of them for State or public bodies. These included a new building at NUI Galway, a hospital block at Letterkenny General Hospital and on the Institute of Technology, Tallaght, in Dublin.
Taite is a principal of Farrell Grant Sparks, which specialises in insolvency work. Among his other cases is the receivership of the Skylab building on Dublin’s Exchange Street, owned by publican and restaurant owner Jay Bourke and businessman Eoin Foyle.
Kieran Wallace, head of KPMG’s restructuring and forensic advisory unit, is one of the busiest insolvency practitioners. Wallace brought the Linen Supply of Ireland examinership to a successful conclusion last year, a case that set a precedent in that it allowed businesses a way out of cash-draining leases agreed at the height of the property boom. The company has been back in business for the last 12 months.
He is receiver over Ellen Construction’s Island Key apartment development on Dublin’s northside. The process of winding-up Wexford-based Ellen began this month.
Ulster Bank last year appointed him as receiver to the Conway Partnership, a large Cork property developer, which owed it an estimated €100 million. The assets include developments at Dennehy’s Cross and Douglas, with 140 apartments and 1,400sq m of retail space. He is also receiver of a number of Howard Holdings companies.
One of his more complex projects is Ipos Securities, over which he is liquidator. The firm has shares in 145 pharmacies. He acted in as receiver to IT company Cognotec, which was sold to First Derivatives. His other cases included Protim Abrasives, an industrial business; Cologne Reinsurance; and part of the Hughes Hughes bookshop chain.
Ferris & Associates
Last year, Martin Ferris was appointed receiver to HSS, the holding company for assets belonging to developer and businessman Jim Mansfield.
This included Citywest Hotel, in Saggart, Co Dublin, whose conference centre was a flashpoint that sparked a series of planning rows between Mansfield and South Dublin County Council. Bank of Scotland appointed Ferris to the company, which owns the hotel, conference centre, two golf courses and apartment blocks, on foot of a €140 million debt. Late last year, the directors, Mr Mansfield and his sons, placed the company in liquidation. The developer built up the complex from the early 1990s, when he bought part of the old Tassagard Stud for £1 million.
Ferris is the principal of a medium-sized specialist firm that handles cases involving everything from small business to high-profile insolvencies such as HSS.
AIB appointed him receiver to a number of Ellen Construction projects in the southeast. Ulster Bank appointed Kieran Wallace to the company’s Dublin assets. Ellen owed more than €77 million to its secured creditors.
Ferris also acts in a wide range of cases involving smaller businesses and properties.
Michael McAteer & Paul McCann
Paul McCann and Michael McAteer are principals of accountancy firm Grant Thornton’s expanding insolvency and corporate recovery arm.
Both men were part of the more specialised practice, Foster McAteer, which Grant Thornton bought out a number of years ago.
They were the administrators that the High Court appointed to Quinn Insurance last year at the request of the financial regulator, Matthew Elderfield, who discovered that the underwriter was in breach of solvency requirements.
Administrators are common in insolvency systems used in other jurisdictions, but it is limited to insurance in the Republic. .
McCann and McAteer are responsible for managing the business, but do not own it.
In 2009, the High Court appointed McCann as examiner to O’Brien’s Irish Sandwich Bars, the restaurant chain controlled by Brody Sweeney. McAteer, is receiver to part of the Pierse Contracting group, specifically part of a hotel and apartment complex in Santry and Carrickmines Manor, which was a joint venture between the building company and developer Paddy Kelly.
Jim Luby had to deliver some bad news this week when he told staff at the Sunday Tribune newspaper that they were being made redundant.
Luby was appointed receiver to the newspaper a number of weeks ago, but was forced to close the title this week with the loss of 43 jobs after a buyer failed to materialise.
One of his bigger cases is Black Shore Holdings, which was one of the main companies behind businessman and property player, John Sweeney’s operations.
Sweeney is the biggest investor in the Shelbourne Hotel. His interests were mainly in the Galway area and included the Courtyard Marriott, services stations and convenience stores. Kieran Wallace is receiver over part of these businesses.
Luby recently brought an action to the High Court seeking to restrict brothers Christian and Simon Stokes, who ran the Bang Café and Residence members’ club in Dublin, from acting as company directors. He was liquidator of one of their companies, Auldcarn Ltd. The brothers are facing a similar action from the liquidator of another of their businesses.
Luby is administrator to a International Financial Services Centre firm, ESG Reinsurance, and an associated business, Accent. The courts appointed him at the request of the financial regulator in 2009. The company, ultimately based in Bermuda, reinsured accident, health and general policies.
Are lenders too keen to go for the nuclear option when a business gets into trouble?
Have your say at irishtimes.com/business