Trouble looming for Irish department store Dunnes Stores due to “significant losses”
Company's chief Margaret Heffernan clashing with NAMA
Dunnes Stores chief Margaret Heffernan has clashed with the National Asset Management Agency (NAMA) over a bid to wind up her company.
She has told the agency it will be held responsible for the “very significant losses” her company will “inevitably” experience if a petition to wind up her retail giant is pursued.
The non-payment of some €21.6 million for a shopping center development in Co. Kilkenny, where Dunnes agreed to be the anchor store, is at the center of the dispute.
A full hearing of a winding-up petition at the Commercial Court has been fixed for hearing on December 14.
Dunnes employs 18,000 people and has about 130 retail stores throughout Ireland.
At an initial hearing on Monday, the court was told that Dunnes is “robustly solvent” but unwilling to pay the money to construction company Holtglen Ltd, which is insolvent with loans gone into NAMA, the agency established by the government in 2009 to address the serious crisis in the Irish banking sector as a result of loans given to developers.
The Commercial Court was told that Dunnes was unwilling to pay €21.6 million owed to Holtglen on several grounds, including concerns about the viability of the shopping center at Ferrybank, just inside Co. Kilkenny and near Waterford city.
In strongly worded letters to NAMA chief executive Brendan McDonagh, Heffernan described the center as “an unmitigated disaster.” She said the winding-up petition was “an abuse of process.”
She wrote that it cannot be NAMA’s belief that Dunnes was insolvent and that any petition to wind up the company on grounds of insolvency was not justified.
She insisted that the “mere presentation” of the petition would damage Dunnes and Ireland. Advertising the petition would simply exacerbate that harm.
The court heard that NAMA wrote to Dunnes on October 30 warning that, unless the company paid €21.6 million to Holtglen within seven days, there would be a petition to wind the group up on grounds that it was unable to pay its debts.
Brian O’Moore, counsel for Dunnes, said the group wanted talks with NAMA. He said the interests of NAMA and Dunnes were similar, and it made no sense and was a waste of time and money seeking to wind up Dunnes.
Last March, summary judgment was granted for €20.4 million to Holtglen against Dunnes. That was after a court upheld an arbitrator’s award to Holtglen arising from a 2007 agreement to build the center for €37 million.