The High Court has appointed joint provisional liquidators to a mechanical engineering company that designed and built heating and environmental services for the construction sector.
The winding up order was made in respect of LMC MEP Ltd which the High Court heard got into difficulties caused by the Covid-19 pandemic and the extraordinary price inflation in construction materials.
The company says that some of its suppliers have engaged in "excessive profit taking."
The court heard that the company has a negative net asset position of over €6.66m. It owes over €3.5m to its trade suppliers.
Other creditors include Revenue, and it owes debts to other entities within the group of companies it belongs to which it cannot pay.
The court heard that it had entered into a €10m contract with BAM to provide services as part of the construction of a hotel and 412 apartments in Newmarket Square, Dublin 8 but says inflation pressures have added €1m to its costs and now the contract is now "disastrously loss making."
The company also claims two significant construction projects in Cork, valued at over €7.1m to the firm planned for 2022 have been delayed due to legal actions.
The delays to the proposed construction of hundreds of apartments have delayed the commencement of the projects to well into 2023 at the earliest, the firm claims.
The delays, it is claimed have seriously eroded the company's capacity to trade through the current cashflow problems.
The company had sought to bring in fresh investment in exchange for equity within the group, however last month the proposed investor withdrew from a deal.
The firm, which was part of a group of linked entities, employed over 40 people and had traded profitably for many years.
The group's customers included An Post, the HSE and the Irish Prison Service, as well as acting as subcontractors to major building firms.
At the High Court Mr Justice Brian O'Moore said he was satisfied to make orders appointing provisional liquidators to the company, with a registered address at the Courtyard, Kilcarbery Park, Nangor Road, Dublin 22, after being satisfied that the firm is insolvent and unable to pay its debts as they fall due.
The judge appointed chartered accountants and insolvency experts Colin Gaynor and Michael Leydon as joint provisional liquidators to the company.
The firm's directors, Martin Lydon and Stephen McConnell, petitioned the court for the appointment of the liquidators who claimed that their appointment was in the best interests of the company's creditors, and employees.
Represented by John Fitzgerald Bl the company asked the court to appoint the liquidators to ensure an orderly wind up of the company.
There were concerns expressed that some creditors may take matters into their own hands and seize company assets.
In light of those specific pieces of evidence about the threats to the assets of the company which emerge from disappointed creditors, the judge said that joint provisional liquidators should be appointed.
