DEVELOPER LIAM Carroll’s Zoe group could face liquidation next week, if one of its creditors succeeds in halting its appeal against a High Court refusal to appoint an examiner to six of its companies.
The liquidation of Zoe firms, Vantive Holdings, Morston Investments and four subsidiaries has been on hold since last month to allow the group appeal a High Court refusal to appoint an examiner to rescue the business.
ACC Bank, which is seeking the repayment of €136 million, yesterday argued that the Supreme Court should not hear the appeal. The court will decide the issue on Tuesday. If it rules in the bank’s favour, this will pave the way for the group’s winding up.
The companies’ first bid to be placed in examinership failed in July. However, they were allowed to petition the High Court a second time after revealing they had new evidence to support their claim that they had a reasonable chance of survival if an examiner were appointed to the companies.
Yesterday, ACC Bank’s senior counsel, Lyndon McCann, argued the Supreme Court should not hear the appeal, as the companies were effectively guilty of an abuse of process by withholding details of a business plan from the High Court in their first application.
Vantive’s barrister, Michael Cush SC, told the court that Mr Carroll, the group’s main shareholder and effective controller, decided to withhold the business plan, but said that move was not malevolent.
“The decision was made in circumstances where a short time afterwards he was hospitalised,” he said.
Mr Cush pointed out that Vantive’s director, John Pope, subsequently said that, at the time the decision was made, he had underestimated the impact of Mr Carroll’s health on his capacity to make such decisions.
Mr McCann agreed that while the decision to withhold the information was not malevolent, it was deliberate, strategic and contrary to legal advice. He added that once the group found that its decision had backfired, it decided to go back to court.
He argued that in these circumstances, it was undesirable to allow anyone “a second shot, a third shot or even a fourth shot”.
Mr McCann said that allowing Zoe a second chance prejudiced the rights of other parties, such as those of ACC, and added that there were no exceptional circumstances which justified doing so.
Mr Cush said the court should take into account the group’s explanation for withholding evidence, and to consider the broader purpose of examinership, which is to save businesses and jobs. He listed a 12 different suppliers and subcontractors whose businesses would suffer, or fail altogether, should Zoe be liquidated.
