The High Court has appointed joint provisional liquidators to two companies behind the “Polo Stores” franchise which imports and retails central and eastern European food supplies.
The court heard that due to a serious conflict between the two 50 per cent shareholders and directors, Alexandr Vakiy and Max Bulgakov, the companies were sliding into insolvency and there was a concern that the situation could affect the goodwill of suppliers.
Maxela Ltd and EastDeli Ltd were set up by Ukrainian citizens, Mr Vakiy and Mr Bulgakov who came to Ireland in the late 1990s and opened a number of grocery stores.
There are now 15 Polo Stores operated by Maxela across the country. EastDeli operates a store in rented premises in Clondalkin, Dublin.
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On Tuesday, Cian McGoldrick BL, instructed by Darragh O’Donovan of Orpen Franks Solicitors, told Mr Justice Brian Cregan the winding up petition was brought on behalf of Mr Vakiy in order to safeguard the goodwill of the companies and because of material concern that the relationship with suppliers was being undermined,
In the petition, it is claimed the relationship between the two men previously broke down resulting in Mr Vakiy bringing shareholder oppression proceedings. Mr Bulgakov alleged Mr Vakiy was party to an extensive €18 million fraud, a claim strongly denied by Mr Vakiy who said no evidence emerged supporting any fraud on the companies in this amount.
The oppression proceedings were withdrawn earlier this month but the issues they had raised “continue to seriously affect the management of the companies”.
Mr McGoldrick told the court Mr Bulgakov had unilaterally blocked access to online banking facilities which meant staff and suppliers could not be paid.
The firms have between €700,000 and €900,000 in working capital but supplier costs alone are €450,000 a week which means they could “slide into insolvency” in a matter of two weeks, he said.
The petition states the companies are “effectively paralysed due to an irreconcilable breakdown in the relationship of trust and collaboration between the two shareholders and directors”.
It is also claimed there has been a recent credible offer of interest from a third party operating in the same industry in acquiring the whole the business as going concern, or its core assets.
Mr Justice Cregan said he was satisfied to appoint Brendan O’Reilly and Mark Degnan of Interpath Advisory (Ireland) as joint provisional liquidators.
He was satisfied the companies are insolvent and unable to pay debts as they fall due and that there is a good prima facie case that it is likely the winding up order will be obtained. This was on the basis that the relationship between the two shareholders is hopelessly deadlocked and there is a serious conflict between them, he said.
He granted orders giving certain powers to control the company to the provisional liquidators and said the petition to appoint full liquidators can be heard next month.
