Creditors of Clerys department store have voiced frustration that the liquidators, KPMG, have not yet interviewed the former directors of the company.
According to minutes of the first meeting of the creditors' Committee of Inspection on 7 September, liquidators Kieran Wallace and Eamonn Richardson told creditors that they have issued a detailed questionnaire to the former directors, and hope to meet each director within the next four to six weeks.
However, Mr Richardson also warned that while former owners Gordon Brothers have complied with their obligations to deliver a statement of affairs, they are based outside the jurisdiction and "may be reluctant to engage further".
Mr Wallace warned that there is a "high evidential threshold" in trying to recover monies from more profitable group companies - and that while he understood the moral outrage arising from the liquidation, this on its own would not lead to a recovery of money.
Gordon Brothers sold the Clerys property and operating companies to the Natrium consortium headed by Dublin woman Deirdre Foley on 12 June for around €30 million.
However, within hours, following a complex series of transactions, the operating subsidiary OCS Operations was placed in liquidation which affected up to 460 workers, around 50 concession holders and other creditors including the Department of Social Protection, which faces a redundancy claim for €2.5m.
The committee meeting was attended by Mr Richardson and Mr Wallace, along with representatives of concession holders, SIPTU, and the Department of Social Protection.
The liquidators told the committee that they will apply to the High Court in October for directions as to the entitlement of concession holders to assert a "trust" claim against certain funds in the liquidation.
The concession holders say they are owed around €2m in cash takings, which they argue were held in trust for them by the operators of Clerys OCS.
The liquidators told the committee that without an express order from the court sanctioning payment to the concession holders, the liquidator could be challenged for making payments to one body of creditors to the detriment of preferential and unsecured creditors.
The minutes also state that the Department of Social Protection representative, Ann Riordan, expressed concern about the closure, and asked the liquidators to carry out a forensic analysis of all transactions in the period leading up to the liquidation.
She suggested that rather than bringing an application at this stage to pay out funds, the liquidator should instead exhaust all avenues of possible recovery and then determine how funds should be applied.
She also noted the relationship between the group companies and urged the liquidators to explore the possibility of seeking recovery from them.
She also queried the rent paid by the company to its parent.
However, Mr Wallace told the committee that the legal provisions entitling a liquidator to seek contributions from group companies contain high evidential thresholds.
He said in all his years of practice, he could count on one hand the number of successful cases, adding that significant expenditure could be incurred for no recovery.
He told committee members his preference was to identify a specific pressure point and if possible, to seek to exploit it.
Mr Richardson summarised the investigations currently ongoing including investigation of the conduct of the directors and a number of transactions and payments made by the company in the weeks leading up to the liquidation.
He said a detailed questionnaire had been circulated to directors and that the liquidators hoped to meet with each director within four to six - at which point they will "raise specific points of concern and seek a full explanation".
A number of concession holders expressed annoyance at the slow timeframe, stressing the pressures on their businesses.
They queried why the liquidators had not already spoken to the directors.
The liquidators have already calculated that €400,000 is potentially available to concession holders.
Committee members urged the liquidators to seek an explanation from the directors as to why sales proceeds had not been kept in a segregated bank account, and called for the directors to be taken to task.
The meeting agreed that the key points to be put to the former directors would include the application of the insurance proceeds from a flooding claim, and the basis on which the directors handled concession cash receipts.
It was also agreed that the agenda for the next committee meeting would include the liquidators' proposed fees, and an update on investigations and interaction with the directors.
ICTU critical of Minister Bruton over Clerys closure
The Irish Congress of Trade Unions has accused the Minister for Jobs, Enterprise and Innovation Richard Bruton of failing to address what it called a legal loophole facilitating the closure of the Clerys department store.
ICTU maintains the loophole in company law allows directors to engineer the closure of a firm and maximise profits, while denying workers their entitlements.
After the sudden closure of Clerys on 12 June, ICTU General Secretary Patricia King argued that the Clerys closure was not a normal commercial failure, and proposed reforms to the minister that would ensure that a 30-day notice period would apply in the case of all collective redundancies - including insolvencies.
She also demanded that company directors found to have breached the reformed law should be restricted for at least five years.
Ms King noted that the manner of the closure had resulted in the State carrying the full liability for redundancy payments estimated at €2.5m.
However, today Ms King strongly criticised the official Government response as failing to address the matters raised by ICTU.
In that response dated 17 September, the Department of Jobs, Enterprise and Innovation said that certain provisions of the Protection of Employment Act 1977 are expressly stated not to apply to a firm whose business is being terminated in winding-up proceedings.
It added that making staff serve out 30 days' notice in an insolvent company where wages cannot be paid would be a meaningless exercise, and could adversely affect their access to social welfare.
The response also noted that the liquidators had told the High Court they had identified a number of matters that they are investigating as part of the liquidation process.
It stated that it is only when all the facts and events leading up to the winding-up of a company are known - and any potential legal challenges raised - that an informed decision about amendments to existing law should be made.
The Department of Jobs, Enterprise and Innovation said in a statement: "As Minister Bruton has said throughout this process, when the proceedings have concluded he will examine with colleagues and CLRG as to whether there is a need to make legislative change to prevent a situation like that in Clerys form arising again."
It added: "Significant changes have been made to the law in this area through the Companies Act 2014, and many of these provisions have yet to be tested in the courts. The Minister for Social Protection has stated that she plans to use every available legal avenue to vindicate the State and taxpayers' rights.
"As such, the only prudent course of action is to await the outcome of these proceedings before assessing, along with the Company Law Review Group, what changes if any need to be made to company law."