An agreement has been reached in relation to a High Court case brought by the liquidator of a meat-processing company, looking to hold the directors personally accountable for outstanding debts totalling €2.7 million. Following private out-of-court negotiations, the settlement details remain undisclosed, but it was announced that the company’s debtors included more than 100 businesses and farmers from the northwest.
John Healy, acting as the official liquidator for Edenmore Meats Limited, applied for orders against the company’s directors Donal Gallagher and Richard Burke. Robert Daly, who stepped down as director in 2017 but retained the role of company secretary, was also implicated. The representation for the liquidator, John Kennedy SC, argued before the court that all three individuals should be banned from holding director or officer positions in any company for a minimum of five years.
In addition, Kennedy argued that the three should be accountable for the company’s debts and liabilities, totalling approximately €2.7 million. Out of this debt, an amount of €1.5 million is owed to farmers who were left unpaid for their livestock supplied to the business.
The directors denied all accusations and contested the applications. The case was presided over by Mr Justice Oisín Quinn in January, where the dispute was heard over a period of four weeks. Kennedy recently informed the judge that the case was concluded under “confidential terms” and could be dismissed with the agreement of all involved parties.
Mr Justice Quinn expressed relief over the end of the complex and challenging case. Healy had argued during the case that the directors had mismanaged Edenmore Meats, allowing it to trade despite clear signs of insolvency.
Investment from a company associated with UK-based Gallagher led to the appointment of the three directors to Edenmore in 2014/15, which was left devastated following its collapse, reportedly causing significant difficulties for many farmers.
Healy, appointed as liquidator by the High Court in 2020, reportedly faced considerable resistance from the directors. However, upon accessing the company’s books and records, it was alleged that email exchanges showed the directors were aware that they continued to operate the company despite its insolvency.
The company directors, represented by Gary McCarthy SC, professed that the corporation was amid difficulties before their tenure began. They maintain that they operated with constant integrity, responsibility and honesty, deeply regretting their inability to improve the company’s circumstances. Their attempt to salvage Edenmore was frustrated, they say, when an unlawful occupation of the company’s Lifford facility occurred in October 2016. Mr Gallagher, who is the largest creditor of the company, asserts his involvement was an outright catastrophe. He reluctantly invested money into the firm, related to his affiliations with Donegal and its previous largest shareholder, his cousin Liam McGavigan. The company’s loss could have been more severe had it not been infused with capital by Mr Gallagher’s company in 2014, the directors argue. They state they extracted nothing from the company, instead implementing strategies to remedy the company’s issues and rebuild trust with the agricultural community. In an unfortunate twist, the leased facility was illegally taken over and occupied by Mr McGavigan and alleged associates of the paramilitary group, the INLA, and the building was eventually put into receivership and sold. During the alleged occupation, Mr McGavigan, who was the proprietor of the premises, vehemently refuted all accusations levelled at him. Post the occupation, the directors say the facility was inaccessible, company records could not be obtained, regulatory filings were not made, and trading was discontinued. They assert that the cessation of trading led to demonstrations against them, debt recoveries, and personal threats and intimidations.