The High Court has appointed provisional liquidators to 13 construction companies with a number of sites, including for approved housing bodies.
Twenty individual companies in the Torca Homes group, which have faced a number of difficulties in recent years, are insolvent, the court heard. Thirteen of them applied to the court for the appointment of provisional liquidators while it is proposed that the other seven will go into voluntary liquidation.
On Monday, barrister Ross Gorman, instructed by Graham Kenny Solicitors, on behalf of the 13 companies, applied to Judge Marguerite Bolger for the appointment of Nicholas O’Dwyer and John Boland of Grant Thornton as provisional liquidators.
The judge approved the appointment for each of the companies and said the matter could come back in June.
READ MORE
The petitions state that the group companies, of which brothers Phelim and Oisín O’Connor are mostly the directors while Helen Scully is a third director of some, was founded in 2012 as the property market began to show signs of recovery.
The initial strategy was to focus on being developers and to engage main contractors and other professionals as required.
The companies successfully completed a number of developments. Between 2019 and 2021, they acquired various sites with finance, though special-purpose vehicles (SPV), from a number of credit institutions and also entered agreements with the social housing body Respond.
Kerry Group CEO on the impact of Middle East conflict, AI and drive to keep bread fresher for longer
The structure was designed to ensure that the relevant SPV had sufficient working capital to complete a development.
However, whenever a company entered a development agreement, it had to put up a 10 per cent of construction value performance bond which, as the group grew, meant it had to obtain larger bonding facilities from a number of lenders and the figure for this eventually grew to €15 million.
The pandemic impacted on the group in a number of ways including having to sell houses at break-even value in order to provide funds to meet debts. One of its main contractors, Blacklough Construction, went into liquidation in 2023 while two other contractors also went in liquidation at about the same time.
Despite negotiating certain price uplifts with Respond, there was virtually no contingency for the completion works and once defects were uncovered in ongoing projects, this made it clear that nearly all projects would be loss-making.
A particularly challenging issue arose when it was discovered the contractor had built a construction in Carrickmines in the wrong location, the petition stated. The architect involved was sued and a settlement agreed but it did not fully compensate the company concerned due to legal costs and retention fees.
In efforts to deal with the issues it faced, the group entered into a phased payment agreement with Revenue and reduced costs, including making a number of employees redundant.
On advice from Grant Thornton, it was ultimately decided the only way value could be preserved for creditors was by placing the companies in liquidation. There was also a need to secure valuable assets on various sites which the liquidators could do.
The 13 companies involved are: Cavernbell Ltd, Bloom Capital Ltd, Torca Developments Ltd, Torca Construction Ltd, Torbuild Ltd, Hallglen Ltd, Craterside Ltd, Coastdawn Ltd, Hailview Ltd, Kentdale Ltd, Rothmount Ltd, Teabrook Ltd and Wildeborn Ltd.
