The High Court has appointed a provisional liquidator to two subsidiary companies of a recently wound up parent firm behind the production of and sale of wearable technology devices.
BMR Slendertone SARL of Paris, France, and Slendertone Distribution Inc, New Jersey, USA, are subsidiaries of Bio-Medical Research (BMR) company and of the parent firm Bio-Medical Research Group (BMRG) Ltd, both of Galway.
BMR/BMRG, which had around 60 employees, were wound up earlier this month following a failed examinership process.
The devices which the group produced included muscle strengthening EMS (Electrical Muscle Stimulation) machines marketed under the Slendertone and The Flex Belt brands in over 20 countries. Over 10 million devices have been sold worldwide.
As a result of the liquidation of BMR and BMRG, the French and US companies are now insolvent because these firms were dependent on BMR for product supply and back office support. They cannot continue to trade and will shortly cease trading once existing stock has been sold.
While they are both registered in France and the US, the court heard Ireland was regarded as their "centre of main interest" for the purpose of the winding up petitions.
Repayment demand
In the petition on behalf of the US firm, the court was told their principal lender, Beechbrook of Mahon Point, Cork, has issued a demand for repayment of some €8.3 million, which the company was not in a position to repay. The demand stated Beechbrook may take steps to enforce its security.
The US firm's largest unsecured creditor is BMR which accounts for the vast majority of its entire liabilities of some €16.7 million. It has one employee, Mike Nohilly who is resident in New Jersey and is also a director. The other directors, Jason Keeley and Keith Gavin, live in Ireland.
The US firm made a loss of €324,704 in the first four months of 2022 and, on a balance sheet basis, its current liabilities exceed assets by some €15.6 million.
The French firm has been in profit for the last three years and for the first five months of this year it made a profit of around €160,000.
However, its liabilities were around €817,000, and it was therefore insolvent. There is no prospect of it being able to survive and trade independently of the BMR, the petition stated. It has four employees in France.
Mr Keeley, who is chief executive of both US and French firms, said in affidavits that the US firm believes that a provisional liquidator should be appointed with a view to the orderly wind down of the company.
He said creditors of the French company have been told it can no longer trade and a decision about its future is imminent. The company believes appointing a provisional liquidator would be best placed to deal with creditors, he said.
On Wednesday, Mr Justice Brian O'Moore, following an application from Stephen Brady BL, on behalf of the petitioners, agreed to appoint Nicholas O'Dwyer, of Grant Thornton, as provisional liquidator to both firms. Mr O'Dwyer is also the liquidator of BMR/BMRG.
The judge was satisfied that Ireland is the centre of main interest of the firms.
He gave directions for the advertisement of the winding up petition in the public press and said the case can come back before the court next month.
