The High Court has appointed provisional liquidators to a Dublin recruitment agency that specialises in the tech sector.
Mr Justice Mark Sanfey appointed Declan Clancy of Status Corporate Advisory and Barry Forrest of Forrest & Company as provisional liquidators to Allen Recruitment Consulting Ltd, with registered offices at Pembroke Street Upper.
It followed an application by barrister Ross Gorman on behalf of the company, whose directors are Brian Cunningham and Louise Allen.
The company, which was set up in 2000, said it provides temporary and contract staff for multinational firms, particularly in the tech industry.
It grew slowly up to 2019, breaking even or making a modest profit. In January 2020, it had 16 administrative staff who placed its agency staff with client companies. At that point it placed 111 agency staff with clients.
It grew very rapidly during the pandemic, placing more than 600 people in temporary employment and had 70 people directly employed in its Dublin office.
By March 2022, it had a peak agency staff of 355 but demand began to decline. The firm had warehoused a lot of debt to Revenue, which the court heard stands at some €5 million.
An expansion into seven European countries in recent years, along with finance for office space and local employees, ultimately proved unsuccessful, the petition said. The money loaned for that expansion was not recoverable.
A survival plan, in which overheads were trimmed and staff numbers cut by 50 per cent as the decline in demand for agency staff continued, failed to turn the business around. It had also entered into an instalment arrangement in 2024 to pay off the €5 million warehoused Revenue debt.
The company was clearly insolvent and, given its current financial position, it said, it would not be in a position to pay staff for work they undertake in November.
Agency staff get paid by Allen Recruitment the first week of the month after they have worked but it can be up to two months before the company is paid that money by its clients. The company is due to be paid around €1.2 million by its clients for work done in September and October this year.
If it does not pay staff their wages, clients will terminate their contracts and will not in turn pay invoices. As a result the directors made the decision to apply to have provisional liquidators appointed. The directors have informed clients of the insolvency and are working to ensure agency staff are engaged by other agencies so that they can continue to work for clients, the petition said.
The directors believe if there is a fairly seamless transition, the €1.2 million it is due from clients will be paid even if it goes into liquidation.
Mr Justice Sanfey was satisfied that a controlled wind down of the company was appropriate and the appointment of the provisional liquidators with a view to conducting the affairs of the firm is the only way the assets can be protected in a proper manner. He said the case could come back to court later this month.
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