The High Court has given troubled stockbrokers W & R Morrogh two weeks to pursue negotiations with potential investors. The court yesterday adjourned for two weeks a petition to wind up the Cork-based firm.

On April 27th last, on the application of the Central Bank, the court appointed an accountant, Mr Tom Grace, as receiver and manager over the firm's affairs.

In court yesterday, Ms Eileen Barrington, for Mr Alexander Morrogh, the senior partner in the firm, applied for an adjournment of the petition. She said Mr Morrogh was of the view, despite the firm's difficulties, that certain investors, having regard to its 9,000 client base and its goodwill, were interested. A Dublin solicitor, Mr Michael Hanahoe, representing Mr Stephen Pearson, the junior partner in the firm, told Mr Justice Lavan that his client was hospitalised at present. He had met Mr Pearson last week, who had instructed him that Mr Pearson would give full assistance to all parties.

The Central Bank had applied for the appointment of Mr Grace following a claim by Mr Morrogh that it appeared Mr Pearson had defrauded the firm and could not, at that time, be located. Bank officials had been told by Mr Morrogh and employees that Mr Pearson had sustained a loss of £3.2 million while trading futures on his personal trading account. It was also claimed that £1.9 million of those alleged losses remained unpaid.

It appeared that £1.3 million was unaccounted for in an account entitled "spare client a/c".

Yesterday, Mr Michael Collins SC, for the Central Bank, said the deficit was un-quantified at the moment but was potentially very serious and appeared to have arisen from the activities of Mr Stephen Pearson rather than Mr Morrogh.

The Bank had suspended the firm from carrying on business, until June 30th at least. It had also frozen all the firm's accounts.

Mr Grace had been appointed with all the powers of the partners. If there had to be negotiations (with potential investors), it would be Mr Grace who would conduct those negotiations. He might be assisted by Mr Morrogh.

The main concern of the Central Bank was to ensure clients got paid in full. That would require an investment of some sort - an injection of capital into the business - unless there were assets which could be realised.

Mr Justice Lavan asked if Mr Grace was receiving the co-operation he required from the firm's two partners. Mr Collins said Mr Morrogh was co-operating and appeared not to be at fault in this matter.

Mr Justice Lavan said it was patently very important that Mr Pearson realise his obligations and co-operate with Mr Grace. Mr Hanahoe said his client would give full assistance to all parties. Mr Pearson was not in a position to do that at the end of last week but was now in a position to deal with it.

The judge said he thought the Central Bank and Mr Grace had adopted a pragmatic and sensible view and he adjourned the hearing to May 21st.