Company building hundreds of social homes insolvent

A CONSTRUCTION company involved in building hundreds of social and affordable housing units and apartments has been placed into examinership by the High Court.

Co Kildare-based MDY Construction Ltd sought the protection of the courts as it is currently insolvent and unable to pay its debts as they fall due.

The company is currently involved in six projects, including the construction of housing in Hollywoodrath, Dublin 15, social housing units at CHI Orchard Lawns, Cherry Orchard, Dublin, Bray in Co Wicklow, Kildare town, a primary care centre in Rialto, Dublin, and apartments at Dolphins Barn, Dublin.

The company estimates the cost to complete all these projects, which are due to be handed over at various dates ranging from next month to June 2019, to be €38m.

The court also heard that works on some of the projects, which in some cases is being done on behalf of various state entities, have ceased.

At the High Court yesterday, barrister Ross Gorman for MDY’s board of directors, which petitioned the court for the appointment of an examiner, said the firm had got into trading difficulties for a number of reasons, including low gross profit margins in recent years.

Counsel said that further problems were due to a dispute it has with a client over the delay in the commencement of the construction of a 200 housing unit project in Baldoyle, Co Dublin, in 2015, and due to historic debts caused by its decision in 2006 to acquire certain development sites.

Its debtors include various subcontractors and Revenue, counsel said.

Mr Gorman said that, despite this, his clients were confident that the appointment of an examiner can ensure the firm has a good prospect of survival as a going concern.

Following counsel’s submissions, Mr Justice Tony O’Connor said he was satisfied to appoint insolvency practitioner Neil Hughes as interim examiner to the Naas, Co Kildare, registered company, which has 39 employees.

The judge made the appointment after Mr Gorman said that an independent expert’s report had stated that the company had a reasonable prospect of survival if certain steps are taken, including Mr Hughes putting together a scheme of arrangement with the company’s creditors.