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The High Court has appointed joint provisional liquidators to an Irish firm linked to the collapsed German Property Group, formerly Dolphin Capital. 
Mr Justice Senan Allen was told on Wednesday that the application to appoint provisional liquidators to Dolphin MUT 116 Ltd was being moved for reasons including the High Court having last month granted a woman’s petition to wind up another Irish company in the group, MUT 103. 
The German Property Group collapsed last year after taking more than €1 billion from investors in Ireland, Britain, Asia and elsewhere. 
Money was raised from more than 1,800 Irish investors by way of loan notes for the purpose of buying and renovating listed buildings in Germany with promises of annual returns of as much as 15 per cent. Some €150 million was invested by Irish investors between 2012 and 2019. 
An insolvency process is ongoing in Germany in relation to the group. 
Dolphin MUT 116, with registered offices in Naas, Co Kildare, was set up as a special purpose vehicle to generate investment from Irish investors, which funds were in turn loaned to several subsidiaries of the German Property Group. MUT 116’s sole shareholder is Tulipfield Ltd. 
On Thursday, Mr Justice Allen was told by Peggy O’Rourke SC, for MUT 116, that it has extensive liabilities and a significant number of creditors, many of whom, although represented by brokers, are retail investors. 
Its liabilities to loan note holders to date amount to some €36 million while another €63 million will fall due over the lifetime of loan note instruments to 2024. 
The company’s only asset is €10,500. While documents placed a face value of some €177 million on security held by the MUTs in German property assets, a “note of caution” has been sounded on the ability to recover under the security in light of ongoing fraud investigations and the applicable insolvency law in Germany, the petition stated. 
The insolvency administrator has indicated he considers the Irish loan claims to be subordinated, with the effect the security may he challenged. 
Ms O’Rourke said the directors of MUT 116 – Eanna McCloskey, of Millfarm, Dunboyne, Co Meath and Brian Flynn, Glenvar Park, Blackrock, Co Dublin – have formed the view it is appropriate provisional liquidators be appointed to continue engagement with creditors and with the insolvency administrator to get the best outcome possible for creditors. 
While the petition to wind up MUT 103 was resisted by the directors on grounds including existing plans being in place to deal with creditors and others, including for convening creditors meetings, their position had changed following the High Court’s appointment of a liquidator to MUT 103, counsel said. 
On foot of the evidence and submissions, the judge was satisfied to appoint Ian Barrett and Shane McCarthy of KPMG as joint provisional liquidators pending the hearing of the winding up petition next month. 
He noted that, up to March last, the directors took the view the best way of managing the company’s difficulties was for them and Wealth Options Trustees Ltd, as administrator since 2011 for German Property Group products in Ireland, to liaise with investors. 
However, since the High Court had wound up MUT 103, the directors changed their view and considered the best way of proceeding with this “difficult and challenging” task of managing the best return it can for the investors from the insolvency proceedings in Germany was via a liquidator, he said. 
Noting that Myles Kirby had been appointed liquidator to MUT 103, he said it was not obvious to the court there was a divergence of interests between MUT 103 and MUT 116 warranting separate liquidators. 
But the safer course for now was to appoint the provisional liquidators as sought and any issue in that regard could be dealt with when the petition is returned next month, he added. 
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