Two executive directors of Doherty Advertising Ltd, which is in receivership and liquidation, agreed yesterday to be held personally liable for €2.2 million of the company's debts.
Mr Justice Kelly, sitting in the Commercial Court, directed Mr Mark Beggs, of Dunkeld, Drumnigh Road, Old Portmarnock, Co Dublin and Mr Anthony Martin, of "Thornberry", Granville Road, Blackrock, Co Dublin to pay the money over to Mr Tom Kavanagh, the receiver and manager appointed to the company.
The judge, by agreement between the parties, also made a declaration under section 297 of the 1963 Companies Act that Mr Beggs and Mr Martin were each knowingly a party to carrying on the company's business in a reckless manner.
Mr Justice Kelly also made declarations restricting the two individuals from acting as company directors for a period of five years.
Mr Kavanagh was appointed receiver by Ulster Bank Commercial Services Ltd on August 26th last year.
In an affidavit sworn in July this year, Mr Kavanagh said it appeared there was a serious shortfall in "collectability" of sums due under the company's debtor ledger, which was the subject of an invoice discounting agreement with Ulster Bank Commercial Services.
At the date of his appointment it was stated that €3,727,634 was due. By June this year only €802,289 had been collected.
A number of matters which led to the shortfall were due, Mr Kavanagh believed, to the directors carrying on business in a reckless manner. Those included raising invoices for €561,421 which gave no description as to the services provided.
He also queried invoices totalling €709,748 in respect of "annual creative fees".
Eight of the company's clients were invoiced twice or several times for the same service to the value of €139,749.
In all three instances, Ulster Bank Commercial Services paid the company 75 per cent of the value of the invoices.
A further 106 invoices totalling €99,479 remained on the debtors' ledger as outstanding debts after they had been paid by the debtor. Ulster Bank Commercial Services continued to make advances to the company.
