After weeks of twists and turns, “fluid is certainly one way to describe” the situation at Altada Technology Solutions, as Mr Justice Brian Cregan quipped in the High Court on Monday. While a stand-off between the company’s liquidator and its receiver may have been parked for the moment, seemingly paving a path for the company to be sold to Integrity360 founder Eoin Goulding this week, there could be more drama on the way.
On Friday, the High Court will hear a challenge from Revenue, a preferential creditor of Altada, which is owed in excess of €2 million by the company, to the loan security underlying Nicholas O’Dwyer’s appointment as receiver to the embattled business last year. He was appointed by four secured creditors, Grattan Boylan, Lynn Bruce, Alan Bruce and Noreen Gallagher – who, just weeks earlier, had provided a loan of €500,000 to the company 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.
‘Heavily insolvent’
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. But barrister Arthur Cunningham, acting on behalf of the Revenue, 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. Cunningham said that while there are “many, many moving parts” to this matter, the Revenue’s position is simple: that the debenture is invalid because the assets that Altada was using as security for the loan were worth far less than thought at the time.
[ Path cleared for Altada sale to original bidder at lower priceOpens in new window ]
If successful, Cunningham’s challenge may throw into question the receiver’s authority to sell the assets. However, as the court heard, the sale of the business may still be carried out by the liquidator. But what is really at stake is whether Altada can be considered on or off the hook for the €500,000 secured debt with, as Mr Justice Cregan described, an effective interest rate of 100 per cent over eight months, a “most unusual” arrangement. Many, many moving parts indeed.
