The majority shareholder in a Dublin-based producer of mainly chocolate food products, employing 107 people, is to oppose what it claims is a “deeply hostile” petition for examinership, the High Court has heard.
The petition for examinership concerns Ina’s Kitchen Desserts Ltd, based in Whitestown, Tallaght, whose registered business names are Ina’s Kitchen Desserts, Broderick’s, Ina’s Handmade Foods and Broderick’s Handmade.
The petition is brought by Barry Broderick, a director and ten per cent shareholder, and is supported by his brother Bernard, and parents Ina and Michael Bernard Broderick, also shareholders.
The Broderick family, which established the company some 26 years ago, between them own 25 per cent of the shareholding and Starkane Ltd owns the remainder.
Enterprise Ireland, which has a long standing relationship with the company since 1998, had introduced the directors to a BDO development capital fund, which continues to provide funding. Starkane was incorporated by the fund as a special purchase vehicle to acquire shares and put money into the company and now owns 75 per cent of the shares.
Mr Justice Michael Quinn previously made directions for the bringing and advertising of the petition, which saw the matter return before him on Tuesday when he fixed the petition for hearing on November 23rd.
Clashing reports
John O’Donnell SC, for Barry Broderick, said Starkane had described the petition as “deeply hostile” when it was rather an attempt to protect the company and its employees.
Counsel said Starkane had just provided his side with a “shadow” independent expert’s report (IER) which referred to matters not previously discussed at board meetings. His side’s independent expert, whose report was previously put before the court, had sought information available to the shadow expert, including concerning future funding in order to have a full picture of the company’s situation, but had only got some information.
He hoped agreement could be reached about access to other information but, if not, he would bring an application as it was in the interests of all involved, including the court, that his side’s IER should be based on all the information available.
The court heard the two IER’s clash on a number of matters, including whether or not the company is solvent. Starkane’s IER maintains it is while the petitioner’s IER has concluded it is unable to pay its debts as they fall due but has a reasonable prospect of survival provided certain conditions are met.
'Disgruntled' shareholder
Bernard Dunleavy SC, for the company and Starkane, said his side regarded the petition as a “deeply hostile” one brought by a “disgruntled” minority shareholder and would be opposing it.
The petition was never discussed with Starkane or the board before being “deployed out of the blue”, he said.
It was bad for the company’s business and the petitioner, in seeking more information now, was trying “to mend its hand”. The petitioner’s IER had sought a range of information and was provided with some information he had specified, such as sales figures, but was also seeking unspecified information in what was a “classic fishing expedition”.
If a “more targeted” request for information was provided, his side may be able to meet that, counsel said.
Having heard the sides, the judge observed “some consideration” will have to be given to the right of access of a director/shareholder to source documents and that Starkane’s characterisation of how the petition was brought was not in itself a reason to withhold documents.
Because there was no application for production of documents before him, he would “say no more”. Having been told the petition will take some two days to hear, he fixed it for hearing from November 23rd.
