Ireland: Dunnes stores faces winding up petition

Ireland-based retailer Dunnes Stores is facing a wind up petition over sunnesnon-payment of about €21.6 million for a shopping centre development in county Kilkenny. The retail chain is facing uncertainty after it failed to pay the money to development company Holtglen Ltd, which is now insolvent with loans gone to the National Asset Management Agency (NAMA).

Dunnes chief Margaret Heffernan said the business is “robustly solvent” but is unwilling to pay the fees to Holtglen Ltd on several grounds, including concerns about the viability of the Ferrybank shopping centre. In letters to NAMA chief executive Brendan McDonagh, Heffernan described the shopping centre as “an unmitigated disaster” and the winding-up petition as “an abuse of process”. She added that a petition to wind up Dunnes Stores, which employs 18,000 people, on grounds of insolvency is unjustified and publicising it will damage both the business, and Ireland.

Considering the implications if the major employer were to cease trading, and the large sum involved, the petition has been fixed for hearing on 14 December in the Commercial Court.

Last March summary judgment for €20.4 million was granted to Holtglen against Dunnes after upholding an arbitrator’s award to the developer arising from an agreement in 2007 to build the Ferrybank centre for €37 million. To date, some €18 million has been paid out by Dunnes on the back of this agreement, and it has indicated in correspondence that it will pay another €7.5 million, along with the transfer of its rights in the shopping centre to NAMA, if it is agreed as the end of its obligations.

Source: www.esmmagazine.com