Cantillon: Clerys staff deserve answers about payment

Money paid to Gordon Brothers would have covered statutory redundancy for workers

“What services did Gordon Brothers provide to earn the €3.65 million?” Photograph: Dara Mac Dónaill/The Irish Times

“What services did Gordon Brothers provide to earn the €3.65 million?” Photograph: Dara Mac Dónaill/The Irish Times

 

Clerys workers are right to raise questions following the news that Gordon Brothers, the former owner of the department store, took a payment of €3.65 million from Clerys in the run-up to its sale and closure. But who will answer them?

The payment was made to the US firm by the holding company for Clerys at some stage during the six months immediately prior to the deal. Gordon Brothers, at that stage, presumably already knew it would sell Clerys. Corporate financiers were already assessing the options.

The holding company, however, is not the entity placed into liquidation; it is the operating company that is being wound up. So the KPMG insolvency team currently picking their way through the remains have no remit to investigate it.

Will the Office of the Director of Corporate Enforcement get involved? It appears to have shown little appetite to peek beneath the bonnet of Clerys so far.

Whenever The Irish Times calls Gordon Brothers, it appears there is nobody home. So don’t expect answers from Boston any time soon.

The payment taken from Clerys in the run-up to the insolvency of the operating business would have easily covered the statutory redundancy payments for staff. Instead, the State paid that bill.

What services did Gordon Brothers provide to earn this €3.65 million? Why was it six times larger than the corresponding payment the prior year?

Why was €1 million of insurance money diverted from the operating business into another entity – the property business – the day before Clerys was closed down? How did the operating business end up with most of the Clerys creditors, but none of the value in the business?

Most depressingly of all, why won’t anybody answer any of these questions about a transaction that, 16 months on, deserves its reputation as one of the most breathtakingly cynical deals in Ireland in recent memory?

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