Subbies furious as Pierse put into liquidation

Grant Prior 13 years ago

Ireland’s Pierse Construction was put into liquidation yesterday 18 months after its UK operation folded leaving a string of angry creditors.

The High Court has appointed a liquidator to Pierse which directly employs more than 100 head office staff.

RTE reported that Mr Justice Peter Kelly also said the trading activities of the company in the past 18 months should be investigated amid allegations of insolvent trading.

The judge said debts of €200m did not accumulate overnight and many subcontractors are unhappy with their treatment by the firm.

The liquidator will now examine Pierse’s trading. The court heard there were substantial intra company debts among the ‘spider’s web’ structure of the group, which the judge said was ‘extraordinarily complicated’.

Earlier lawyers for Pierse said its position had ‘materially disimproved” since an interim examiner was appointed last month to protect the company from its creditors and they no longer wished to proceed with the examinership process.

Pierse Contracting in the UK was put into liquidation in June 2009 following a string of claims by trade contractors that it was not paying bills.

A number of the smaller unsecured creditors in Ireland said they face going out of business.

One man, who did not want to be named, told the Irish Times his company was owed more than €250,000 on several jobs that it had either completed or was working on for Pierse Contracting.

He added that the company had told him earlier this year that he would be paid by next January, but he became increasingly sceptical as time wore on.

The subcontractor pointed out that he was depending on payments from Pierse to pay some of his own creditors, which he cannot now do, and said that it looked like he had little choice but to shut down his own operation. “It looks like I’m finished myself,” he said.

Robert Dore, a solicitor representing a group of smaller creditors owed €1.7m, wrote to John McStay, the interim examiner appointed to Pierse last month, saying his clients were “deeply suspicious” of its directors.

The creditors claimed they had been asked to work overtime to meet deadlines on building projects where Pierse was the main contractor, in circumstances where its directors must have known that the company was insolvent.

Kilsaran Concrete, which is owed €2.7m, argued that the company decided to continue trading in the hope that it would get €16m from Gannon Homes and €1.8m from a schools-building project, even though it owed €50m to unsecured creditors.

A number of unsecured creditors, led by the largest of the group, scaffolding and platform specialist CF Structures, which is owed €5.7m, nominated their own liquidator, Simon Coyle of Mazars.

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