A provisional liquidator has been appointed by the High Court to insolvent tech firm Altada Technology Solutions Ltd.
Last week, a creditor of the firm, Datech Ltd, sought the appointment amid concerns its assets were about to be sold by a recently appointed receiver. Datech is owed €100,000 after it took over unsecured loans advanced to Altada but which went into default last March.
Datech feared that recent investors, who put €500,000 into the Cork tech firm before then appointing the receiver, would have an unfair preference compared to other older creditors when it came to distributing the company's assets in a winding up.
The High Court last week directed that the application to appoint the provisional liquidator should be made on notice to the company and other creditors and the matter came back before the court on Tuesday.
Mr Justice Brian Cregan heard there were appearances on behalf of other creditors, including Revenue which is owed €1.9 million, by the receiver, and by the company itself.
A number of its employees and two directors also attended court and supported the sale by the receiver but opposed the appointment of the provisional liquidator.
Insolvent
The judge was told the company accepted it was insolvent but favoured a voluntary creditors winding up. The receiver, Nicholas O'Dwyer of Grant Thornton, was neutral on the winding up petition but wanted the sale, for which bids are due to close this Friday, to go ahead as planned.
Revenue said it was neither supporting or objecting to the winding up but was concerned the the debt due to it went back over a long time. One of the other creditors, Nicholas investments, said it was not objecting to the winding up.
Following submissions on behalf of the petitioner, the creditors and the receiver, Mr Justice Cregan said he was satisfied the legal tests to warrant the appointment of a provisional liquidator had been met.
These included that there must be a good prima facie case for the winding up and whether there was a serious risk that the assets may not be available to the company in the event of that winding up.
The position here is that a receiver has been appointed, the business is for sale and the sale is due to close on December 30th and that in these circumstances the assets may not be available, the judge said.
Assets
It was clear to the court the assets may not be available, he said.
The receiver was appointed in relation to a loan of €500,000 and while Datech was concerned this gave those creditors an unfair preference, this was not for the court to decide at this stage, he said.
He noted however that the €100,000 loan owned by Datech was called in last March and that the €1.9m owed to Revenue appeared to date back to 2020, long before the receiver was appointed in September last.
It may well be that the sale by the receiver will continue even after the provisional liquidator is appointed, but that is something that will have to be agreed, he said. If not, the receiver can come back to court looking for an injunction, he said.
He urged the parties to find a "sensible resolution" to the issue.
He approved the appointment of John Healy of Kirby Healy Chartered Accountants as provisional liquidator.
