A RECEIVER/Manager appointed by Ulster Bank to a company operating Barry’s Hotel in Dublin has initiated High Court proceedings alleging he is being refused access to the hotel.
Mr Justice Brian McGovern yesterday granted an application by Kelly Smith, for receiver Declan Taite, for leave to serve short notice of the proceedings on Ravenshaw Ltd (in receivership), the company operating the hotel at Great Denmark Street close to Dublin city centre.
Mr Taite is seeking orders restraining any interference with the work of himself and his staff in operating the hotel as a going concern.
The judge made the matter returnable to early next week.
Ms Smith said the directors of the defendant are challenging the validity of Ulster Bank’s security under which the receiver was appointed.
Ulster Bank had appointed Mr Taite receiver on November 23rd last but the following day, when a member of his staff sought to enter the hotel premises, he was refused entry, counsel said.
There followed correspondence between solicitors for the sides in which it was claimed the receiver’s appointment was invalid and in breach of Section 60 of the Companies Act (which prohibits a company giving financial assistance for the purchase of its own shares or shares in a holding company).
The receiver denied any breach of Section 60 and Ms Smith said her client is entitled to access the premises, which is a going concern, and was anxious the matter be determined.
In his proceedings, the receiver said the directors dispute the validity of the security over the hotel property created in May 2001 in favour of First Active when it was providing a IR£2.8 million loan to the company to renovate the hotel.
Ravenshaw was also liable for borrowings of its whollyowned subsidiary company, White Lace Ltd, the receiver said.
The receiver said there was a consistent failure to meet repayment obligations and the defendant had paid nothing since March 2010.
Ulster Bank – which had taken over First Active – claimed an event of default had occurred and Mr Taite was later appointed receiver.
A director of the company had claimed the bank’s security was voided on grounds of claims it related to borrowings advanced to White Lace.
The receiver said there was no breach of Section 60 because, in this case, the company did not give financial assistance to purchase its own shares or shares in a holding company. Funds were borrowed to restructure group company borrowings and the bank’s security was not affected, he said.
