THE COMMERCIAL Court has been told that Dunnes Stores is adopting a ‘can pay, won’t pay’ attitude to a judgement order for over €21 million
The retail giant is the subject of a winding up petition – over its alleged failure to honour the debt owed to insolvent construction company Holtglen Ltd for work on a Kilkenny shopping centre. Dunnes was lined up to be the anchor tenant – but the court heard it has concerns about planning issues and the viability of the Ferrybank shopping centre.
The court heard that Dunnes, which employs 18,000 people, is “robustly solvent” but unwilling to pay the money to Holtglen Ltd (which is insolvent with loans gone into Nama) on several grounds including its concerns about the viability of the centre at Ferrybank.
Listing the case for an early hearing on December 14, Mr Justice Peter Kelly noted Dunnes Stores is no different from any other litigant – and must pay its debts.
Derry McPhilips, whose Holtglen development company built the still empty Ferrybank shopping centre filed the petition against Ireland’s biggest retailer. On October 28, Holtglen obtained a judgement mortgage against Dunnes who was to have been Ferrybank’s anchor tenant, for non-payment of a €20 million arbitration award upheld by the High Court in March.
It is understood that Nama, which took over McPhilip’s Bank of Ireland bank loans in 2010, has given its approval to pursue the case. Holtglen signed an anchor tenant agreement with Dunnes in 2007, just before the market turned. Ferrybank was finished in 2009. After McPhilip’s loans went to Nama in 2010, Dunnes claimed the developer had breached the agreement. The dispute went before an arbitrator, Eoin McCullough SC.
Holtglen counter-claimed payment for work done. The arbitrator awarded just over €20 million against Dunnes that October. Dunnes claimed, unsuccessfully, that the developer’s insolvency meant it was not entitled to the money and then sought through the High Court to get the award set aside, In February, a subsidiary of Nama filed a “notice of substitution”, taking over the power to fund the development. Judge Peter Kelly previously stated that this made Holtglen’s insolvency irrelevant and rejected Dunnes’ claim.