A unit of Marlet Property Group has asked the High Court to have a liquidator appointed to carry out a "full independent investigation" into matters at a company linked to developer Johnny Ronan, called Chambury, which is the focus of a row centred around land in the Dublin docklands.
The nominee would replace an existing liquidator appointed under the voluntary wind-up of Chambury, which was initiated earlier this month by the company’s directors.
Balark Investments, part of Marlet, claims in an affidavit opened in the High Court on Thursday that it is owed €1.15 million in legal costs by Chambury, whose directors include Mr Ronan's daughter, Jodie Ronan.
Marlet, led by chief executive Pat Crean, won a High Court case in March against Chambury over a "ransom strip" that Marlet claimed was holding up its planned €100 million development of a 1.7-acre site on the south bank of the Liffey.
Marlet bought two 250-year leases over sites on Sir John Rogerson’s Quay and Lime Street in December 2015. However, Mr Ronan acquired the freehold interest over three slices, or “lots”, of the site in 2015, which were later transferred to Chambury.
Freehold on strips
A dispute arose when Marlet sought to buy the freehold on the strips from Chambury for a small sum based on ground rent laws, while the Johnny Ronan-linked company sought €20 million. Mr Justice Robert Haughton ruled in March that Marlet could buy two of the lots for €45,000.
Chambury was allowed to retain ownership of the third land slice, or lot 7, which was not part of the case and which sources had previously said had no impact on the planned development.
The directors of Chambury decided to put the company into wind-up at the start of this month. It emerged during a creditors’ hearing on July 8th that lot 7 had been sold on to another group company in December for €70,000, according to the Balark affidavit.
Balark wants the High Court to appoint its nominee as a liquidator to Chambury to investigate various matters.
These include whether Chambury’s “directors engaged in reckless trading” in pursuing litigation against Marlet/Barlark when the former was “prime facie already insolvent” at the end of 2016, the last date for which accounts are publicly available. Still, the affidavit noted that Chambury’s 2016 accounts stated that “group companies and directors have provided financial support to the company in the past” and that they had “indicated” they were willing to extend that into 2017.
Carrying value
Barlark also wants its nominee to investigate Chambury’s sale of lot 7 for €70,000 at a time when the directors were telling the courts and stating in accounts that the asset – and two other lots subject to the legal dispute – were worth “significantly” more than their €51,000 carrying value on company accounts.
It wants to establish whether the sale price of lot 7 was at an “undervalue such as to perpetrate a fraud on the creditors”. Still, the court ruling in March set the value of two of the three lots at €45,000.
"It is categorically rejected that any of the directors engaged in any unlawful activity with regard to the conduct of affairs of the company at any time," a representative for the directors of Chambury said in response to questions from The Irish Times. "The company was perfectly entitled to defend litigation which was initiated by Balark against it."
The application was made on an ex-parte (one side only represented) basis. The matter is due back before the court on July 2nd.
