Clerys liquidator gave investor ‘advice’ before sale

Investor Deirdre Foley has rejected suggestions there was anything improper in dealings she had with one of the liquidators appointed to the Clerys business, Eamonn Richardson of KPMG, before the acquisition of the Clerys group.

Ms Foley was a key promoter in the purchase of the Clerys group in June 2015 in a transaction that included the building on O’Connell Street, Dublin, and department store business.

The company that ran the business, OCS Operations, was placed in liquidation straight after, and Mr Richardson and Kieran Wallace, also of KPMG, appointed as liquidators. More than 400 people lost their jobs.

Ms Foley, in an affidavit to the High Court, said the level of publicity she has got since the purchase of Clerys is “unmerited and distressing”.

The founder and owner of D2 Private said a company of which she is a director, Natrium Ltd, bought OCS Group on June 12th, 2015. OCS Operations was the “employer” of staff at Clerys.

Laptop seized

Ms Foley and D2 Private are, among other matters, seeking damages from the seizure of a laptop from D2 Private offices by inspectors from the Workplace Relations Commission who are looking at employment law aspects of the transaction. She and D2 claim inspectors James Kelly and Pat Phelan acted outside their powers.

Ms Foley said that as part of the Clerys transaction “suitably qualified individuals” were sought as new directors of OCS Operations. The new directors, Brendan Cooney and Jim Brydie, “carried out certain due diligence in advance, and then became the directors of OCS Operations following the completion of the purchase”.

“The decision to apply to place OCS Operations in liquidation was not my decision and was a matter for the then directors. The decision to make the employees redundant was a matter for the joint liquidators.”

It was clear before the purchase of the group that the Clerys retail operation was incurring significant losses, but the decision to wind up OCS Operations was “entirely the decision of the directors who were acting independently”.

It was normal for parties considering an acquisition to retain advice and in this case it involved KPMG and A&L Goodbody. “It is absolutely normal for such commercial parties engaged in a transaction to enter into” confidential discussions.

‘General advice’

She said the promoters of the transaction attended meetings with KPMG and received advice. “Naturally, those advices included an analysis of the various companies’ books and records, accounts and financial position. Mr Richardson . . . gave general advices on restructuring/insolvency procedures, and the duties owed by directors where a company is insolvent. He did not act as liquidator. Nor could he have, because he was only subsequently appointed with Mr Wallace to the office of joint liquidator by the High Court” on June 12th.

It was “wrong to suggest that this was improper or that we engaged the liquidators prior to the court appointment”.

Advice was received from KPMG before the transaction and “included advices regarding potential restructuring and other matters. There is nothing improper in that.”

She said all the advice received related to a “potential transaction”. The transaction remained a potential one up to the early hours of June 12th.

Mr Richardson, Mr Cooney, and Mr Brydie have rejected any suggestion of impropriety in relation to the transaction.