Court of Appeal refuses to lift former director’s restriction

A FORMER director of a company that had a €300 million deficit prior to its liquidation in 2014 has lost his appeal aimed at overturning an injunction restricting his ability to serve as director or secretary of the company for a period of five years to function in the company.

Ork solicitor Fergus Appelbe was one of three directors of Alvonway Investments Limited, whose loans were acquired by the National Asset Management Agency (Nama) in 2011.

Alvonway, formed in January 2005, was among a number of companies owned and operated by Celtic Tiger property baron Joe O’Donovan who had agreed to a 2020 restriction order in lieu of a disqualification.

The company’s main asset was the Wilton Shopping Center in Cork.

In a judgment yesterday by Ms Judge Mary Faherty, the three-person Court of Appeal (CoA) upheld the High Court’s October 2020 injunction against Mr Appelbe, barring him for a period of five years from serving as a director or secretary of a company unless , the company complies with the specific requirements set out in the Companies Act 2014.

High Court Justice Michael Quinn said in July 2020 that payments to Mr O’Donovan and his accountants in August 2013 without Nama’s prior consent were made by Mr O’Donovan without the knowledge of the other two directors.

The payments, totaling €450,000 made from the company’s checking accounts, appeared to be the main driver behind the orders sought by insolvency practitioner Ken Fennell, Judge Faherty noted.

Mr Appelbe, who has been a director of the firm since its inception, had argued in the High Court that he had “little knowledge” of what was going on
in the company during
August 2013 for being disfellowshipped when Nama interfered.

Mr Justice Quinn said Mr Appelbe appeared to have misunderstood the serious duties of a director and to believe he could avoid a restraining order simply by showing that he was unaware of the specific transactions.

Mr Justice Quinn pointed out that the Company kept proper books and records at all times and compiled with its filing obligations and the discharge of obligations to the Revenue Commissioners.

Ms Justice Faherty said the fact that Nama was in control as of 2011 and was only associated with Mr O’Donovan did not relieve Mr Appelbe of his director’s duty to keep abreast of the company’s affairs.

She said he couldn’t now claim “with any credibility” that he hadn’t known or suspected the company was in serious financial trouble since at least 2011 and that this should have prompted him to be more conscientious about his duties.

In essence, there was a “complete failure” on his part to provide information from which the High Court judge could conclude that he had made himself fully aware of the matters in order to carry out his duties as director, continued Ms Justice Faherty.

In those circumstances, the High Court judge had no choice but to make the limitation order as there was no evidence to enable him to determine that Mr Appelbe had acted responsibly at any point, she said.

She noted that Mr. Appelbe’s honesty was not questioned in the restriction request.

https://www.independent.ie/business/irish/appeal-court-refuses-to-overturn-restriction-on-former-director-41836156.html Court of Appeal refuses to lift former director’s restriction

Fry Electronics Team

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