Court hears realisable assets at liquidated company "vanished without plausible explanation"
A couple who owned a substantial Roscommon truck firm which went into voluntary liquidation have been disqualified by the High Court from acting as company directors for seven-and-a-half years.
Ms Justice Deirdre Murphy also ordered that James and Anne Kelly, who were sole directors of Kelly Trucks Ltd, Drummond, Strokestown, be made personally liable for the debts of the now liquidated company which was involved in trucks sales, servicing repairs and testing.
Liquidator Gerard Murphy said the realisable assets of the company, estimated at €838,000, have "vanished without plausible explanation".
He said simultaneous to the liquidation, two companies operating from Strokestown and Ballaghaderreen rose "from the ashes".
The directors of those two companies, Kelly Trucks Strokestown Ltd and Kelly Trucks Ballaghaderreen, are the Kellys' children James Junior and Patricia and the new entities carry on the same business as the liquidated firm.
Ms Justice Murphy said the case stemmed from a dispute over a judgment against Kelly Trucks for €32,000 in November 2012 when another transport company sued the Kelly firm over a defective lorry. The Kelly firm also faced a legal bill for that dispute of some €55,000.
When the judgment was not paid, the other transport company brought a petition to have Kelly Trucks wound up for being unable to pay its debts.
Following legal proceedings, including an unsuccessful attempt by the Kelly parents' firm to appeal the judgment to the Supreme Court, the company still faced the €32, 000 judgement and a legal costs claim which had reached €120,000 by June 2013.
The winding up petition came before the High Court a month later and in November, the petition was struck out on the undertaking the Kelly firm would pay the €32,000 judgment, a further €5,000 towards legal costs and €500 a week towards the rest of those costs, pending taxation. While the judgment was paid, most of the legal costs were not.
A month later, the Kelly firm was voluntarily wound up.
The other transport company then successfully applied to court for the removal of the liquidator which had been appointed by the company and his replacement with Gerard Murphy.
Following investigations, Mr Murphy said it was plain substantial assets had been disposed of, the effect of which had been to perpetrate a fraud on the company's creditors who include the Kellys' former solicitors and lawyers for the other transport company.
He said Anne Kelly was "the conductor of an orchestrated scheme" to transfer the business of Kelly Trucks to the two new companies.
He sought orders from the court under company law including the disqualification of the Kelly couple.
Mrs Kelly, who represented herself in court, claimed, among other things, the case was not properly before the court and there were "glaringly obvious breaches of law" due to the failure of the court to follow standard procedural requirements.
Ms Justice Murphy, in a judgment published last week, was satisfied the transfer of the business of Kelly Trucks to the new Strokestown and Ballaghaderreen firms, and the frustration of the liquidation, had been brought about by "the deliberate actions of Mrs Kelly".
She had "sought to represent herself as an injured party in these proceedings, a fact which is difficult to reconcile with the objective evidence before the court," the judge said.
She was satisfied the couple "acted fraudulently and recklessly" with a view to defrauding creditors of their business.
She also ordered the return of the €838,000 assets owned by Kelly Trucks.
