A judge in the Odessa Club case has asked a company director for provide the court with a sworn statement of his background and business experience and said that if the newly financed company wished the proposed rescue plan to be accepted by the court he should consider personally attending the next sitting.

The judge went on to say that company directors could not be allowed to go from one company to another while leaving a trail of debt behind them before setting up a new enterprise, a judge warned on Wednesday.

Judge Jacqueline Linnane also pointed out in the Circuit Civil Court that companies should not seek court protection from their creditors under examinerships just to avoid paying their taxes.

The judge made her remarks after having been told by barrister Arthur Cunningham, counsel for the Revenue Commissioners, that the insolvent Odessa Club and Restaurant in Dublin’s Dame Court owed €78,000 in VAT and another €88,000 in unpaid PRSI and PAYE.

Mr Cunningham had raised concerns on behalf of Revenue with regard to the appointment by a proposed new investor to Odessa of a director/manager, Victor Temple Garner, who, Judge Linnane was told, had been involved in two companies which had previously financially collapsed.

He said the Revenue had suffered losses in the region of €600,000 regarding companies which had been in the control of Mr Temple Garner and which had gone into liquidation.

Mr Cunningham said the position of the Revenue Commissioners was that those losses were a material matter for the court to consider when being asked to accept a rescue package under a scheme or arrangement being put forward by examiner Joseph Walsh of Hughes Blake Accountants.

Mr Walsh was appointed examiner to Odessa Club and Restaurant Ltd in February after the company became unable to pay debts of more than €1million and on Wednesday he submitted his report to Judge Linnane on a proposed rescue plan for the company.

Barrister Eithne Corry, counsel for Mr Walsh, said there had been a creditors meeting on Tuesday at which every single class of creditor had accepted the examiner’s proposals.

She said Quanta Investments Ltd had undertaken to invest €250,000 in the club to fund the examiner’s scheme of arrangement and if the scheme was approved the directors of Odessa, Eoin Foyle and Peter O’Kennedy, would resign their positions.

Ms Corry said restaurateurs Victor Temple Garner and Donal O’Donoghue would be appointed directors to manage the business but would not be directors of the company. She said that while two companies in which Mr Temple Garner had been involved had gone into liquidation he had not been restricted from acting as a director and no orders had been made against him.

“How has the examiner come to the conclusion that this company will suddenly, miraculously work out with Mr Temple Garner running it,” Judge Linnane asked.

Ms Corry said the investor, Quanta , “a specific investment company which invests mainly in businesses on behalf of high wealth individuals,” had put significant faith in Odessa after choosing Mr Temple Garner and Mr O’Donoghue to run the business.

Judge Linnane said the reason Odessa had sought examinership in the first place was because Mr Foyle had acquired a company, Sherland Entertainment, of which he was a director at the time, without knowing the extent of its debts and for which no books of account had been kept.

Under the proposed scheme some 87 unsecured creditors will receive 10 per cent of what they are owed. The biggest creditor (€91,000) is wine wholesaler Radichio Consultants Ltd., trading as Woods Wines. Vernon Catering is owed just under €75,000 while Mullingar Farm Meats is owed €27,000.

Other food and drink suppliers among the unsecured creditors include East Coast Suppliers, La Rousse Foods, Condrens, Gleneely Foods, Heineken Ireland and Ready Chef Limited. Odessa’s landlords, Mel Sutcliffe and Joe Christle, have agreed to waive a sum of €135,000 owed to them.

Under the proposed scheme monthly loan repayments would be made to the secured creditor, Ulster Bank, which is owed €252,000.

Judge Linnane directed the provision of further evidence on behalf of Revenue and Mr Temple Garner before considering acceptance of the examiner’s scheme.