A dispute over the distribution of part of the proceeds of the €40 million sale of a Dublin property between the receiver and liquidator of the wound-up Pierse Contracting firm has been entered into the fast-track Commercial Court.
The dispute, between Ken Tyrell, as receiver of the firm, and Tom O’Brien, as liquidator, centres on how the net proceeds of the sale of the property at Moss Street, City Quay and Gloucester Street, on Dublin’s south quays, should be distributed.
Under mortgages entered by Pierse Contracting Unlimited Company, which was wound up with debts of €212 million in 2010, the properties were charged as security for all Pierse liabilities owing to the fund Dengrove DAC.
The property was formerly owned by two partnerships. The partnerships comprised Pierse, as well as developers Pat Ryan, Phil Monahan, Paddy Kelly and brothers John, Alan, Brian and Niall McCormack.
The loan agreements provided recourse to the individual members of the partnerships should there be default.
Mr Tyrell, as receiver, has sold the property and he says part of the proceeds have already been used to discharge partnership loans. This followed a High Court dispute in which two members of the partnership, Mr Ryan and Mr Monahan, brought proceedings against Mr Tyrell and Dengrove seeking an injunction preventing the sale of the property.
Mr Tyrell says in an affidavit that after the injunction was refused, he sold the property in August 2021 for €40.5 million to Ventaway Ltd.
After the discharge of partnership loans and other deductions, Mr Tyrell believes the net proceeds will be attributable to the interest of the company pursuant to its interest in the partnerships and the respective members of the partnership.
He says a dispute has arisen with the liquidator about the application of the company’s share of the proceeds of sale and in particular the extent to which those proceeds can be applied in the discharge of certain non-partnership liabilities owed by Pierse to Dengrove.
He says the liquidator appears to be taking the position that the company’s share of the proceeds can only be applied to discharge its liabilities under the loans used to acquire the property.
Mr Tyrell says that, given the difference of views, he has no alternative but to apply to the court to seek certainty before the balance remaining from the sales can be distributed.
Admitting the case to the Commercial Court on Monday, Mr Justice Denis McDonald said it was a “quintessentially commercial case”. He said it could come back to court in May.
