Laragan - Judge rejects Scheme of Arrangement

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RonanC

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Another update in this case http://www.independent.ie/breaking-...cts-scheme-to-save-property-firm-1825597.html

The High Court has refused to approve the scheme put together by an examiner to save property company Laragon Developments and it will be put into liquidation.


This means there will be a winding up of the company and its assets, if any, will be redistributed.
Mr Justice Frank Clarke, in handing down his decision, said the way in which depositors and creditors were dealt with by Laragon was unfair.


The court heard that 157 parties are owed money by Laragon in respect of its developments at Kilronan Castle Hotel and holiday homes in Roscommon, Carrickmines Green in Co Dublin and Milner Square in Santry.


Ninety-five homebuyers paid €15,000 or €20,000 in deposits for apartments at either Milner Square or Carrickmines Green and the examiner scheme was offering them 1% of that back due to the company's collapse.


Trade creditors who carried out work on the developments were being offered around 6% of what they were owed and described this as a joke.


The owner of a block-laying company who is owed a significant sum said he would prefer to see the company go into liquidation so it could be investigated.


Today, Mr Justice Frank Clarke said Laragon was not a company the examinership process was designed to protect.
He said its collapse happened in circumstances where the market changed dramatically and he felt the depositors and creditors were not dealt with fairly.


He said that, in all the circumstances, he could not approve the scheme and the company would be put into liquidation, which may mean that depositors and creditors will be left with nothing.


He will officially make the orders tomorrow.
 
Re: Laragan customers lose their deposits

This statement in particular stands out for me - I feel that this can be seen as strong criticism from Mr. Justice Clarke - What will happen now that liquidation is the next step? Is an investigation carried out now?

"Today, Mr Justice Frank Clarke said Laragon was not a company the examinership process was designed to protect!"
 
Re: Laragan customers lose their deposits

Delighted to hear this news as it ties in with my earlier posts!

The next step is for the liquidator to dispose of the assets of the company and to carry out an investigation of the directors and report to the Office of the Director of Corporate Enforcement within 6 months.

The problem is that many Examinserships are often pre planned and the Examiner who should be an officer of the court is providing a service to the company in Examinership. If Laragan is one of these schemes, I would not hold my breath as to any significant outcome of an investigation seeing as the examiner will be the liquidator.
 
Re: Laragan customers lose their deposits

jack2009 said:
Delighted to hear this news as it ties in with my earlier posts!

The next step is for the liquidator to dispose of the assets of the company and to carry out an investigation of the directors and report to the Office of the Director of Corporate Enforcement within 6 months.

The problem is that many Examinserships are often pre planned and the Examiner who should be an officer of the court is providing a service to the company in Examinership. If Laragan is one of these schemes, I would not hold my breath as to any significant outcome of an investigation seeing as the examiner will be the liquidator.
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Would the Liquidator not be someone different altogether?
 
Re: Laragan customers lose their deposits

Hi Jack -

Can you explain - "If Laragan is one of these schemes"?

Would the High Court appoint Mr. Paul McCann as the Liquidator who was also the Examiner for Laragan Developments Ltd?

Do I have the following correct -

  • The role of the Examiner is to assist a company through a difficult trading period
  • The role of a Liquidator is focused on the Creditors?
 
Re: Laragan customers lose their deposits

andycole said:
Hi Jack -

Can you explain - "If Laragan is one of these schemes"?

Would the High Court appoint Mr. Paul McCann as the Liquidator who was also the Examiner for Laragan Developments Ltd?

Do I have the following correct -

  • The role of the Examiner is to assist a company through a difficult trading period
  • The role of a Liquidator is focused on the Creditors?
How would one person be able to do both jobs? Surely it would be a different person.
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I do not know if Laragan is one of these "schemes" and have no way of finding the answer to this question.

The same person will be appointed as liquidator. Yes the roles are different but the examiner would usually also be an experianced liquidator!

The role of the examiner is essentially to decide on the whether the company can continue trading.

The role of the liquidator is essentially to sell the assets of the company and if possible make a distribution to the creditors. However, on the basis that the examiner hoped to make a 6% distribution to unsecured creditors I think you can assume that that distribution is now 0%.
 
Re: Laragan customers lose their deposits

Jack this result will go back to the section 17 protection offered by the holding company. With luck the liquidator hat will ensure that the digging is done deeply and a far better result will come to the benefit of the deposit holders and trade creditors a like.

It will be great to see the ODCE get involved as they had no interest in complaints made prior to the examinership regarding the behaviour of the company directors.

The possibility of proof of reckless trading and trading while insolvent will also come to light over the next couple of months.
 
Re: Laragan customers lose their deposits

What are the implications for buyers with contracts now that Laragan Developments LTD will be liquidated? Will the liquidator enforce contracts for all Blocks A - D?
 
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Re: Laragan customers lose their deposits

Sconhome said:
Jack this result will go back to the section 17 protection offered by the holding company. With luck the liquidator hat will ensure that the digging is done deeply and a far better result will come to the benefit of the deposit holders and trade creditors a like.

It will be great to see the ODCE get involved as they had no interest in complaints made prior to the examinership regarding the behaviour of the company directors.

The possibility of proof of reckless trading and trading while insolvent will also come to light over the next couple of months.
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The section 17 guarantee only referres to December 2007 and not past that as yet!

I would not hold your breath for any findings or reckless trading or trading while insolvent. The ODCE only make their decision based on the information put forward by the liquidator. However, any creditor that has any information regarding the transactions should write a letter to the ODCE. You may never hear back from the ODCE but they usually raise these points with the liquidator.
 
Re: Laragan customers lose their deposits

andycole said:
What are the implications for buyers with contracts now that Laragan Developments LTD will be liquidated? Will the liquidator enforce contracts for all Blocks A - D?

Or the fact that Mr. Justice Clarke said that Deposit Holders and Creditors have been treated unfairly by Laragan Developments LTD - are contracts void now?
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How could the liquidator enforce contracts for A: apartments that were not built and b : would have been way over their completion time
 
Re: Laragan customers lose their deposits

foxylady said:
How could the liquidator enforce contracts for A: apartments that were not built and b : would have been way over their completion time
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I do not know if the liquidator can sell the contracts to a third party but it is possible that the liquidator could determine that it is in the best interest of the creditors and arrange to have the houses completed knowing that there are about 100 contracts that if completed will give a higher profit than current prices.
 
Re: Laragan customers lose their deposits

jack2009 said:
I do not know if the liquidator can sell the contracts to a third party but it is possible that the liquidator could determine that it is in the best interest of the creditors and arrange to have the houses completed knowing that there are about 100 contracts that if completed will give a higher profit than current prices.
Click to expand...


Even if they decided to complete the development, it would take at least another year possibly more and people scontracts would then be 2 years over the completion date and no court in the land would force people to complete these .
 
I would imagine that a provisional liquidator has been appointed for now pending a winding up order.

Have a look at the Supreme Court judgment in Coolfadda.

http://www.courts.ie/Judgments.nsf/...c0b23c567df5052a802575f3002d3341?OpenDocument

Note the part of the judgment where the court says as follows:

"or whether it is appropriate instead for the Court to make a winding up order, which would inter alia permit employers on building contracts being carried out by the Company to terminate such contracts"

It can be deduced from this that on a winding up an employer (purchaser of apartment/house) is entitled to terminate the contract (Condition 5 of standard building agreement). I think that once a winding up is ordered the contracts can be terminated by the employers and will not be enforceable by the liquidator.
 
Milner's Square buyers

If you're a Milner's Square buyer, sign the petition

[broken link removed]
 
"The standard practice when buying a new property from a developer was/is to purchase by way of a contract and a building agreement. Effectively a contract for the site and a buidling agreement for the property to be built. In the building agreement the builder is called the contractor and the purchaser is called the employer.

The contract and building agreement are the standard documents and clause 5 of the building agreement states:
 
andycole said:
I read this posting on another website - I think this is accurate because the Condition 5 mentioned below is in the contracts. This means that all the buyers in Milners Square and Carrickmines will not be held to their contracts. I think the fact that most of the Blocks in Milners Square are also not started - means that the Liquidator will not be able to get any monetary value from the contracts etc..

So for people in Block's A - D the Milners Square situation has come to an end - the only issue outstanding is how the Liquidation process will go and the possibility of achieving some proportion of a refund of our Deposits. But this is probably very unlikely now with the size of the Debts of Laragan Developments Ltd to the different Trade Creditors etc.

And it now seems that this Liquidation process could take more than a year!


"The standard practice when buying a new property from a developer was/is to purchase by way of a contract and a building agreement. Effectively a contract for the site and a buidling agreement for the property to be built. In the building agreement the builder is called the contractor and the purchaser is called the employer.

The contract and building agreement are the standard documents and clause 5 of the building agreement states:

If the Contractor should be adjudged bankrupt or, being a company enter into liquidation (other than for the purpose of reconstruction or amalgamation) or if a receiver shall be appointed or if the Contractor shall enter into an arrangement with or for the benefit of his creditors or become unable or refuse or neglect to carry out and complete the Works, the Employer may determine this Agreement by notice in writing to the Contractor or his assignee or liquidator or receiver.......

So pretty much any purchasers who don't wish to complete should hope that the developer goes into liquidation."
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Andy

I would say there is more chance of us winning the lotto than getting our money back from this whole fiasco. think we will have to wrtie it off as a very expensive lesson learned .
 
I know that alot of people have lost alot of money and will be fraught and anxious but i was hoping someone might be able to shed some light on how the news of Laragan's liquidation could affect Kilronan and Lough Rynn.

I am due to get married there nest year and on hearing what the judge has said it sounds like he wants Laragan's developments to be investigated as it was a company acting as a "vehicle of convenience" for the Hanley group. I am worried what the results of this investigation will mean from properties owned by the Hanley Group including the hotels and the impact this could have on people who are due to use these hotels for their weddings.

Any thoughts?
 
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