DISPUTED VALUATION
FULTONS LOSE COURT BATTLE OVER £1.75M FLAGSHIP STORE SALE
BOSSES at one of Northern Ireland’s best-known furniture retailers have lost a High Court battle over the sale of their former flagship store.
Cyril and Ernest Fulton claimed the £1.75m price for Fultons Fine Furnishings’ premises on Boucher Road, Belfast had been a gross undervalue.
The store was sold in August 2013 after the firm went into administration at the owners’ request the previous July.
Since then the interiors company has made a comeback and continues to trade from its show- room in Lurgan, Co Armagh.
The Fultons were challenging claims by banking group AIB that more than £900,000 in loan facilities was owed, the court heard.
They argued that the statutory demands should be set aside on a number of grounds, including an allegation that the Balmoral Plaza premises in Belfast was deliberately sold at a gross undervalue and without being put on the open market.
A report from a valuer instructed by Cyril and Ernest Fulton estimated it could potentially have been worth between £4.5m-£5m.
According to their case, selling the premises at open market value would have extinguished liabilities to the bank. On that basis, they contended, the statutory demands should be set aside.
But a bank official gave evidence about why it had not objected to the administrative receivers’ recommendation for the sale price.
He stated it was justified due to lack of interest in the asset and a genuine risk that a further open market process might not achieve the £1.75m figure.
Ruling on the dispute, Madam Justice McBride said neither Cyril nor Ernest Fulton has a claim against the bank for any alleged sale at an undervalue by the receiver.
“The sale was conducted by administrative receivers,” she pointed out.
“The receivers act as agents of the company and not the bank who is the creditor in this case.
“Therefore, any claim regarding a sale at an undervalue would be against the administrative receivers and not against the bank.”
Madam Justice McBride also held that money would still be owed if the store had been sold at a higher price.
“I am not satisfied that there is an arguable case that any claim by Cyril Fulton and Ernest Fulton in respect of a sale at an undervalue would exceed or equal the debt they each owe to the bank,” she said.
Rejecting allegations the sale process was conducted improperly, the judge added: “There is no evidence before the court of criminality save bald assertions.”