IN THE MATTER OF AEROSPACE INDUSTRIES INTERNATIONAL LIMITED AND IN THE MATTER OF AEROSPACE INDUSTRIES TRADING LIMITED
(BOTH IN LIQUIDATION)
Background
I was appointed Official Liquidator to Aerospace Industries International Limited ("International") by Order of the High Court on 23 June 2003, on foot of a winding up petition issued by Fairchild Controls Corporation. I therefore replaced the previous liquidator who had been appointed on 3 June 2003.
The companies’ bankers had previously appointed a Receiver to International on 24 December 2002 and to Trading on 10 January 2003.
My investigations showed that another company, Aerospace Industries Trading Limited ("Trading"), had acted as an undisclosed agent of International. Another liquidator had been appointed to Trading on 3 June 2003. The existence of the undisclosed agency agreement led to considerable confusion as to what assets each company had and what creditors each company had.
I carefully considered the matter with my lawyers, and after due consideration, I made an application to the High Court seeking that International and Trading be wound up together, as if they were one company.
My application was heard by the High Court on 8 December 2003, and after hearing all available evidence, the High Court ordered that I be appointed Official Liquidator to Aerospace Industries Trading Limited (thereby replacing the existing Liquidator of Trading), and that International and Trading be wound up together.
The former Director’s submitted a sworn statement of Affairs to the High Court showing their estimated realisable values of the combined companies’ assets and liabilities as at 23 June 2003. I would mention that as at 23 June 2003 the Receiver had already been appointed six months, and had made significant asset realisations. I set out below a summary of the Statement of Affairs (The Statement was presented in US$. I have converted the amounts to Euro using the exchange rate at 23 June 2003 of 1.1539):
ASSETS OF THE COMPANIES | € |
Investment in APU | 1,142,818 |
Balance at Bank | 656,904 |
Bills Receivable | 74,830 |
Trade Debtors | 359,847 |
Stock in Trade | 18,806 |
Inter-Company Receivables | 333,109 |
TOTAL ASSETS | 2,586,314 |
CREDITORS | |
Bank Creditor | 286,715 |
Employee Claims | 185,687 |
Fingal County Council | 31,177 |
Revenue Commissioners | 131,443 |
Unsecured Creditors | 4,031,806 |
TOTAL CREDITORS | 4,666,828 |
DEFICIENCY | €2,080,514 |
Progress of Receivership
The Receiver sold the company's assets, and paid the admitted preferential creditors for the Receivership and the secured creditors.
I set out below a summary of the Receiver’s Receipts and Payments Account for the period 24 December 2002 to 23 June 2005. (The amounts are shown net of VAT)
Receipts | € |
| | |
Bank Balances on Appointment | 132,240.69 |
Sale of shares in Aerospace Industries Incorporated | 766,187.13 |
Sale of shares in Aerospace Industries Supply Limited | 4,673.00 |
Sale of shares in Aerospace Industries Auxiliary Power Limited | 680,725.63 |
Department of Enterprise, Trade & Employment | 59,264.56 |
Sale of Fixed Assets | 17,667.81 |
VAT Repayments | 118,387.00 |
Capital Gains Tax Repayments | 88,910.65 |
Recharge of Overhead Costs | 17,783.50 |
Interest on Deposit Account | 5,659.84 |
Debtors Receipts | 882,771.67 |
Inventory Sales | 310,468.15 |
| | €3,084,739.63 |
| | |
Payments | |
| | |
Receivers Fees | 657,540.33 |
Receivers Expenses | 12,376.19 |
Legal Fees | 178,146.68 |
Professional Fees | 48,458.12 |
Accountants / Valuations Fees | 12,874.00 |
Auctioneers Fees | 18,870.00 |
Insurance Costs | 46,522.65 |
ESB / Telephone / Heat | 49,412.97 |
Wages and Salaries & Pension | 61,550.22 |
Duress Payments | 30,521.66 |
Rent and Rates | 56,968.96 |
IT Support | 6,000.00 |
Fixed Charge Holders Payments | 872,643.42 |
Floating Charge Holder Payments | 225,436.71 |
Employee Claims | 59,264.55 |
VAT paid on expenses | 182,478.46 |
Bank Charges | 11,744.83 |
Sundry Expenses | 3,653.44 |
Capital Gains Tax | 89,042.40 |
Preferential Creditors | 245,250.91 |
Distribution to Official Liquidator | 21,500.00 |
| | €2,890,256.50 |
| | |
Cash Balance as at 23 June 2005 | €194,483.13 |
Section 56 Report to the Office of the Director of Corporate Enforcement ("ODCE")
For more background information on Liquidators' Reports to ODCE, please refer to Official Liquidations Update Background.
I submitted my completed Section 56 Reports on International and Trading on 21 May 2004.
By letter dated 22 September 2004, I was advised by ODCE that I was relieved from the obligation to proceed with a Section 150 Application in respect of International and Trading.
Dividend Prospects for Unsecured Creditors
The Receiver paid over to me a surplus of €196,500.
I have commenced proceedings against the purchaser of the shares in Aerospace Industries Incorporated in respect of an amount of $225,000 due under the original share acquisition agreement. The purchaser disputes that the amount is due.
Given the substantial expenses of the liquidation, there will be no prospect of a dividend to unsecured creditors.
For further information please contact Jim Stafford or Tom Murray on 01 661 4066 or jim.stafford@frielstafford.ie or tom.murray@frielstafford.ie