The Charities Regulator has secured a High Court order appointing a provisional liquidator to the operating company of the Dublin-based homeless charity Inner City Helping Homeless.
The regulator’s application on Thursday was made as a “last resort” in the public interest, James Doherty SC said.
There is “urgent need” for court intervention and the legal test for appointment of a provisional liquidator to North Inner City Homeless Company Ltd in advance of hearing a winding up petition has been met “in spades”, he said.
The application by the Charities Regulatory Authority (CRA) was made on just and equitable grounds in the public interest and the interests of vulnerable service users and stakeholders, particularly in light of the “grave” situation in which the charity has found itself, he said.
ICCH was plunged into controversy in recent months following sexual assault allegations made against its CEO and founder Anthony Flynn, who was suspended by the company and died by suicide last August. He had been under investigation by gardaí in relation to two alleged sexual assaults. In recent weeks, another two men claimed they had also been sexually assaulted by him.
Mr Doherty said the immediate cause of the CRA application was a well-intentioned application, initiated last week by Ann Birney, a director of the company, for a court-appointed inspector to investigate and report on its affairs and future but the regulator had been examining its options prior to that.
Ms Birney, in light of the regulator’s intervention, withdrew her inspection application earlier on Thursday and there was no opposition to the regulator’s application.
In an affidavit, Helen Martin, CEO of the CRA, said she had on July 28th last received a concern related to alleged sexual assaults by a member of the company on vulnerable service users of the company. She forwarded that complaint to gardaí on July 29th and also sought certain information from the company.
In addition to the grave concerns in relation to the alleged criminal misconduct, which was strictly a matter for the gardaí to investigate, Ms Martin said there was regular contact with the company about concerns in relation to its ongoing governance and the board’s ability, for reasons including the resignations of its chair and trustees, to oversee the company’s operations.
Reputation 'in tatters'
She considered an inspection not the best option for reasons including the criminal allegations properly fall within the remit of the gardaí and because an inspector’s appointment would not remedy the immediate and ongoing operational and governance difficulties.
It was difficult to see how an inspector’s report could have produced recommendations that would have salvaged the company’s reputation, which Ms Birney had described as being “in tatters”, Ms Martin added.
The appointment of a provisional liquidator will give the company’s three employees and 100 active volunteers certainty about their position, she said.
The liquidator would also give vulnerable service users support as to other options available to them and take measures to preserve the company’s assets, including €700,000 in its bank account.
Her primary concern was to ensure the company’s cash resources, originating from charitable donations, are secured and transferred to the greatest extent possible to another charity with similar purposes.
Granting the application, Ms Justice Irvine was “absolutely satisfied” the regulator had met the legal threshold for appointment of a provisional liquidator and there were “compelling” reasons and an abundance of evidence for that appointment.
It was “highly likely”, when the winding up petition is heard next month, the company will be wound up, particularly in circumstances where the company was not objecting and had itself considered the winding up option in September, she said.
The judge appointed Kieran Wallace as provisional liquidator and returned the hearing of the winding up petition to next month.