Liquidation of CountyGlen proposed

Countyglen directors are to propose to shareholders that the company be voluntarily wound up in an insolvent liquidation.

Chief executive Mr Niall Duggan has written to all shareholders calling an extraordinary general meeting (egm) to ask that the company be voluntarily wound up.

The egm, to be held on December 18th at the Davenport Hotel in Dublin, is to be asked to appoint Mr James Stafford of Friel Stafford Chartered Accountants as liquidator.

In the letter, Mr Duggan points out that the value of the delisted publicly quoted company fell by £2 million between April 1993 and April 1996.

On top of that, the company has a potential tax liability and negotiations are ongoing with the Revenue Commissioners to reach a settlement. According to Mr Duggan, this is the reason for the delay in publishing figures for the year to end April 1997.

The company's last published net worth on April 30th 1996 was just £87,000. And according to Mr Duggan, this makes a good quality acquisition very difficult.

"Understandably, the prospect of being owned by a company whose last published net worth was only £87,000 was not at all attractive to any quality business," he said.

However, in 1997, the company invested in UK-based Image Advertising. This company is now expected to reach break-even in February 1999.

CountyGlen distributed the majority of its shareholding in Image to shareholders on a one-to-one basis last December.

As a result, there are net assets of around £300,000 still with CountyGlen as well as the disputed tax charge and a number of other trade claims.

But Mr Duggan states in the letter that the board has taken the "prudent view" that assets may not realise £300,000 in a liquidation and therefore this will be an insolvent liquidation, requiring the approval of more than 50 per cent of the shares cast.

If the motion is passed at the egm on December 18th, Mr James Stafford of Friel Stafford Chartered Accountants will be appointed liquidator, according to the motion.

The Stock Exchange cancelled CountyGlen's listing in October 1996. At that time the exchange said the company had failed to show it had a suitable business for quotation. Its listing had been suspended for the previous four years.

CountyGlen's shares were suspended at 70p a share but even if the company had been relisted the shares would have been unlikely to trade at anything remotely approaching that price.

At the time of its listing cancellation, Mr Duggan himself is understood to have had 500,000 shares in the company. A company called Kilberry had 500,000 shares. Kilberry and CountyGlen owned the former Glen Abbey site in Blackrock, Co Dublin. CountyGlen itself emerged from the former Glen Abbey clothing company.

The company has a chequered history. In 1994, a report by Mr Frank Clarke SC, identified Mr John Carway as having been the central figure in a fraud which cost the company £1 million. The conclusion was rejected by Mr Carway.