The High Court has appointed a provisional liquidator to two subsidiary companies of a recently wound-up parent firm behind the production of and sale of wearable technology devices.
BMR Slendertone SARL, of Paris, France, and Slendertone Distribution Inc, New Jersey, USA, are subsidiaries of the Bio-Medical Research (BMR) company and of the parent firm Bio-Medical Research Group (BMRG) Ltd, both of Galway.
BMR/BMRG, which had some 60 employees, was wound up earlier this month following a failed examinership process.
The devices the group produced included muscle-strengthening electrical muscle stimulation machines marketed under the Slendertone and The Flex Belt brands in more than 20 countries. More than 10 million devices have been sold worldwide.
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As a result of the liquidation of BMR and BMRG, the French and US companies are now insolvent because these firms were dependent on BMR for product supply and back-office support. They cannot continue to trade and will shortly cease trading once existing stock has been sold.
While they are both registered in France and the US, the court heard Ireland was regarded as their “centre of main interest” for the purpose of the winding-up petitions.
In the petition, on behalf of the US firm, the court was told its principal lender, Beechbrook of Mahon Point, Cork, has issued a demand for repayment of some €8.3 million which the company was not in a position to repay. The demand stated that Beechbrook may take steps to enforce its security.
The US firm’s largest unsecured creditor is BMR, which accounts for the vast majority of its entire liabilities of some €16.7 million. It has one employee — Mike Nohilly — who is resident in New Jersey and is also a director. The other directors, Jason Keeley and Keith Gavin, live in Ireland.
The US firm made a loss of €324,704 in the first four months of 2022 and, on a balance sheet basis, its current liabilities exceed assets by some €15.6 million.
The French firm has been in profit for the last three years and for the first five months of this year it made a profit of about €160,000.
However, its liabilities were about €817,000 and it was therefore insolvent. There is no prospect of it being able to survive and trade independently of the BMR, the petition stated. It has four employees in France.
Mr Keeley, who is chief executive of both the US and French firms, said in affidavits that the US firm believes that a provisional liquidator should be appointed with a view to the orderly wind-down of the company.
He said creditors of the French company have been told it can no longer trade and a decision about its future is imminent. The company believes a provisional liquidator would be best placed to deal with creditors, he said.
On Wednesday, Mr Justice Brian O’Moore, following an application from Stephen Brady, on behalf of the petitioners, agreed to appoint Nicholas O’Dwyer, of Grant Thornton, as provisional liquidator to both firms. Mr O’Dwyer is also the liquidator of BMR/BMRG.
The judge was satisfied that Ireland is the centre of main interest of the firms.
He gave directions for the advertisement of the winding-up petition in the public press and said the case can come back before the court next month.
