The liquidator of insolvent artificial intelligence firm Altada Technology Solutions has consented to the sale of the company’s assets by its receiver to an entity controlled by tech entrepreneur Eoin Goulding at a lower price than originally stipulated after a rival bid failed to materialise at the last minute.
However, the Revenue – which the company owes more than €2 million – is to seek leave in the High Court to challenge the validity of a €500,000 loan to the company on foot of which the receiver was appointed to Altada last year.
Revenue asked for a hearing on the validity of the loan security before January 27th, the date after which the receiver is allowed to disburse the proceeds of the sale.
The matter is due back in the High Court on Friday.
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Meanwhile, Mr Goulding’s purchase of Altada’s remaining assets – including its source code and other intellectual property – is expected to close before 10am on Tuesday.
The High Court heard from liquidator John Healy that there had been “a significant number of developments” in the matter since it was before the court last Wednesday.
Mr Goulding, founder of cybersecurity company Integrity360, had made a bid for the company’s assets in recent weeks through his company Cometgaze. Receiver Nicholas O’Dwyer of Grant Thornton had accepted that bid, signing a contract with Mr Goulding for Altada’s assets.
Late last week, however, it emerged that the liquidator, Mr Healy, had accepted a higher bid from a consortium led by Datech, a business controlled by US businessman Jeffrey Leo.
The Irish Times reported on Saturday that Altada employees said the company was “imploding” after a number of workers, many of whom have not been paid for five months, said they would walk away from the business if Mr Leo’s bid for the company’s assets was successful.
Workers are owed close to €637,000 by the company, according to the liquidator’s preliminary report, a figure that includes sums owed to Altada co-founders and directors Allan Beechinor and Niamh Parker.
But on Monday, the court heard from barristers representing Mr Healy that it was not possible to conclude the sale to Datech by a deadline last Friday evening.
David Whelan, on behalf of Mr Healy, told Mr Justice Brian Cregan: “The position as of this morning is that it appears that Cometgaze’s contract is the only one capable of being accepted.”
In those circumstances, he said the liquidator was now prepared to give his consent to the conclusion of the sale to allow money flow into the insolvent company and enable it to discharge some of its debts.
Barrister Declan Murphy, for the receiver, told the court that his client, Mr O’Dwyer, also consented to the sale to Cometgaze.
However, he said Cometgaze would go through with the purchase only on the basis that the offer for Altada’s assets – understood to be between €3 million and €5 million – be reduced.
Mr Murphy said: “It gives me no pleasure to say that [Mr O’Dwyer] has been vindicated in his view that the Datech offer would not fully materialise.”
He said that Datech’s offer had only delayed the process, given that it knew that Mr O’Dwyer had accepted an offer and signed a contract with Cometgaze, having assessed the two bids.
“Datech came to this game knowing that there was a signed contract and they continued with this knowing that there was a signed contract,” he said.
Separately, counsel for the Revenue Commissioners said they would be filing an application later this week for a hearing to determine whether the security for the loan, on foot of which Mr O’Dwyer was appointed as receiver to Altada last year, was lawful.
The receiver was appointed by four creditors who had provided a loan of €500,000 over a period of eight months, the court heard last week, with an additional “premium” of €500,000 to be paid on top of the principal. The judge, Mr Justice Cregan, described this arrangement as “most unusual”.
The loan was secured by way of a charge against all of the company’s assets, then judged to be valued at more than €3 million.
Counsel acting on behalf of liquidator Mr Healy queried the lawfulness of the receiver’s appointment on the basis that, among other things, Altada was, in fact, “heavily insolvent” at the time the debenture was registered, according to the liquidator’s preliminary report on the company.
Barrister Arthur Cunningham, for the Revenue, said that while there were “many moving parts” to this matter, his client’s position was simple: “That the debenture was unlawful.”
