Interim examiner appointed to rescue KC Capital Property
Debt of more than €53 million has led to KC Capital Property Group being unable pay its creditors, the High Court heard today, when Mr Justice Micheal P O'Higgins appointed an interim examiner to the role of attempting to rescue the company and two of its associated companies.
Barrister Ross Gorman told Judge O’Higgins that while receivers had been appointed to the three companies last Friday the court was empowered to appoint an interim examiner within three working days.
He said KC Capital Property was engaged in building a nine-storey office block in Cuffee Street, Dublin, the site of which it had bought in 2020 when it had obtained a loan to fund the development.
Mr Gorman, who appeared with Beauchamps Solicitors, said the associated companies were KC Capital Property 182 and KC Capital Property 185, both of which continued to be profitable but were ensnared on the basis they had gone guarantee for the main lender.
He said work on the development started with a €14 million deal with a main contractor and continued until 2022 when it was discovered that the concrete that had been supplied and used in the basement and ground floor was defective, delaying work by two years.
Mr Gorman said the company had instituted commercial court proceedings in excess of €15 million against the the firm that had supplied the concrete, a claim that was being disputed.
The main contractor had not been in a position to remove the allegedly defective concrete and in 2023 a new contractor had been appointed to complete the project.
A contract of €19 million had been agreed with the new building contractor.
"The project has not been completed as of yet and the estimated cost to achieve practical completion is about €2.5 million," Mr Gorman said.
"As the company has essentially run out of money no construction work was currently being carried out on the site."
He said that while the company had only four employees, including directors, numerous other parties would have worked on the site for the new contractor and sub-contractors who, if a rescue plan could be put into operation under examinership, would be re-engaged.
Mr Gorman told Judge O’Higgins that as the property had yet to be constructed the company had not had any turnover and had liabilities of approximately €51.6 million. A lender which had taken over the original loan had run out of patience and had now called in a total debt of €53.3 million.
The three companies, which acknowledged they were insolvent, were not in a position to repay this debt, and on Friday last, John Boland and Colm Dolan of Grant Thornton had been appointed receivers.
He said the key issues faced by the company were that the allegedly defective concrete had delayed the project and cost the company millions.
Mr Gorman said the company had identified a new lender that was willing to lend it sufficient money to complete the development and fund the litigation proceedings.
An independent expert, Myles Kirby, was of the opinion that the companies have a reasonable expectation of survival and had nominated Damien Harper of PUC Consultants to act as Examiner.
Judge O’Higgins appointed Mr Harper as interim examiner and remitted the proceedings to the Circuit Civil Court in January.
