House building firms - involved in construction of houses in Tipp - placed into examinership

Two building firms involved in the construction of rural housing have been given the protection of the courts from their creditors.

Trinity Homes Ltd (THL), and a related company, Yeronga Ltd, are involved the construction of new housing units mainly in rural Ireland, including Wexford, Tipperary, Kerry and Meath.  

Many of the units have been built for local authorities. The business has also constructed units for the housing charity Cluid.

However, the two firms, which were established in 2014, are currently insolvent and unable to pay their debts as they fall due.

The firms claim their difficulties have been caused by factors including the delay caused by the shutdown of building sites due to the Covid19 pandemic, an increase in the cost of building materials, and an inability to meet scheduled repayments on loans advanced to them. 

Another cause of difficulties arises out of an arrangement to buy the shares of a former director of THL for €3m.

It is accepted that as part of that arrangement over €900,000 of THL's money was paid to the former director.

The court heard that THL accepts that this payment, which was made because THL did not have sufficient distributable reserves, breached company law and will have to be investigated. 

The court heard that the companies' main source of funding is through the Immigrant Investment Programme, where non -EEA citizens committing sums of over €1m for three years that are invested in Ireland.

Persons who invest in this programme can obtain residency in Ireland and ultimately Irish citizenship.

The companies, which had been profitable between 2015 and 2019, had borrowed over €11m through this programme.
THL's directors are Stephen Mahon, who is also a 75% shareholder, and Ecaterina Olaru both of Quarrylands Dunboyne Co Meath and Ben Reid of Navan Road Dublin.

Mr Mahon and Ms Olaru are directors of Yeronga.

Applications to have the companies placed in examinership, on the basis that the companies have a reasonable prospect of survival if certain steps are taken, came before the both the High and Circuit Courts last week.

The companies, represented by John O'Donnell SC, Ross Gorman Bl instructed by solicitor Graham Kenny successful petitioned the Circuit Court for the appointment of experienced insolvency practioner Mr John Walsh as interim examiner.

Separately, two firms which represent the companies' foreign investors asked the High Court to appoint another insolvency practioner as interim examiner to THL.

The two entities, Project Trinity Homes Ltd and Project Trinity Homes 2 Ltd, which are represented by John Kennedy SC, are owed a total of €9m by the company.

They claim that they have concerns about the running of the building firms and want an investigation to carried out.

That application came before Mr Justice John Quinn last week who declined to appoint an interim examiner on an ex-parte basis.  
However, the judge made certain directions in the case, and adjourned the matter.

When the case returned before Mr Justice Quinn on Wednesday lawyers for the companies and the creditors the argued which court should the examinership should be before.

However, following what were at times robust exchanges between counsel for the parties, the sides entered into out of court discussions.

Arising out of those talks it was agreed that the matter should go back before the Circuit Court later this week.

It was further anticipated that the examinership application before the High Court would ultimately be struck out.