Readers will, we trust, indulge the column if we return once more to a subject which continues to both intrigue and appall in equal measure.
The labyrinthine manoeuvering behind the abrupt closure of Clerys stores in Dublin – and what has been going on subsequently – merits another look. To recap – the venerable Clerys of O’Connell Street had been in the hands of the Guiney family for generations.
The owners lost control because of ill-advised investment in property speculation which led to unsustainable debt when the crash came. Clerys was bought from the Bank of Ireland out of receivership by Gordon Brothers, a Boston-based investment group, for a reported €15 million.
“We are acutely conscious and respectful towards the store’s heritage and tradition,” intoned Frank Morton, chief executive of Gordon Brothers, as the deal went through.
That was in 2011, and Gordons first step was to split the business in two – OCS Property, which was to own the building, and OCS Operations, which was to run the business. All went well until 2015 when, in a deal signed off at 2.30am on the morning of June 12, Gordons quietly sold off Clerys to an Irish based company, Natrium, for €29 million.
Natrium itself was a joint venture set up by D2 Private, owned by Sligo native, Deirdre Foley, and Cheyne Capital Management of the UK.
Within hours of the deal being done, OCS Operations was hived off to an insolvency practitioner which immediately petitioned the High Court the following day to have provisional liquidators appointed.
The petition was granted and, by closing time on Friday, the liquidators arrived at O’Connell Street in time to tell the 500 loyal staff and concession holders that the place was closing down there and then.
After 162 years in business, Clerys was closed down in less than 162 minutes. Meanwhile, however, Natrium were now the owners of OCS Properties, a hugely valuable flagship in the centre of Dublin, and without any pesky strings attached like staff, customers or a going concern.
The Clerys story provoked a huge public outcry. Natrium, however, was in the driving seat, legally entitled to do what it did, and proceeded to embark on a plan to replace the old building with a boutique hotel, office suites and retail outlets.
But Natrium is not totally out the gap just yet. A raft of enquiries into how the saga was handled is still winding its way through the Commercial Courts, and this week, another interesting nugget revealed itself in the High Court.
Two former directors of OCS Operations have come forward to claim that they were ‘actively misled’ into believing that the business would continue as a going concern after the sale went through. They find themselves in the firing line because the liquidator has applied for disqualification orders against them over the conduct of OCS Operations.
The pair – one Rafael Klotz and a Malcolm MacLennon MacAuley – are professional directors and, in resisting the disqualification order, now maintain that it was a pre-planned strategy on the part of Natrium to wind up Clerys as soon as it was acquired.
They are pleading that they had no prior knowledge of this and, in fact, that they had been given assurances by Natrium that Clerys would continue as a going concern after the purchase.
The Clerys story is not quite over yet.