Examiner assigned to Lark as debts soar

An examiner has been appointed to try to rescue a Co Dublin building company with debts of nearly £23 million (€29.2 million)

Lucan-based Lark Developments, which owes £17 million to unsecured creditors, has attributed its troubles to a hotel development in Co Meath which has cost it £14 million but is not yet complete.

Lark successfully sought the High Court appointment of accountant Mr John McStay as interim examiner yesterday. The company is attempting to trade out of its difficulties.

Mr McStay now has to establish whether it is possible to put together a scheme of arrangement to satisfy creditors while trying to guarantee the company's survival.

Lark's creditors include Anglo Irish Bank, which is owed £3.6 million, and the Revenue Commissioners, which is owed £2.3 million. The unsecured creditors include a number of building firms.

Lark is currently involved in two housebuilding projects, one at Woodville Grange in Athlone and the other at Johnstownbridge, in Co Kildare. Around 18 houses are under construction at each of the sites and deposits have been received on a number of them.

It is understood that all deposits from would-be purchasers are held by solicitors. The houses will be completed in accordance with the agreed timescale, sources close to the company said.

Lark, which has been trading since 1979, had been mainly involved in housebuilding. It subsequently began developing industrial parks, including Rosemount Business Park and North West Business Park at Blanchardstown. However, the firm's troubles began with its investment in the Johnstown House Hotel and Spa in Enfield, Co Meath, which appears to have become a black hole for the company.

To date, it has cost Lark £14 million, and although open for business, is not yet complete.

The company had intended to partly cover these costs by selling development land next to the M50 in Dublin and selling 17 acres of land outside Maynooth. However, both sales were dependent on planning decisions that failed to come through as or when expected, causing Lark to run into its current cashflow problems.

The directors of the company, Mr Anthony Murray and Ms Fionna Murray, are hoping to trade out of its difficulties.

In their application to the High Court yesterday, they noted "the business of Lark is inherently sound, and it has been carrying out both its residential projects and its commercial and industrial projects successfully and profitably".

Accounts for the 10 months to March 31st, 2001, showed a profit of £3.7 million and the company remained profitable until May, they said.

Lark is now obliged to advertise the appointment of the interim examiner and serve notice on its top half dozen creditors.

On November 5th, the High Court will hear an application for the appointment of the examiner on a full basis.

Lark employs 48 people directly while around 300 people are employed by various sub-contractors who have worked on contracts for the company in recent years.

Further reports: page 2