Hitachi Capital joins lessors chasing €11.4 million from Euro UK
Hire. Nancy Smallwood reports.
Hitachi Capital heads a list of English lessors looking to
recover an estimated €11.4 million locked up in plant rental
company Euro UK Hire. This forms the opening stages of litigation
set to run into next year at least.
Go deeper with GlobalData
Euro UK Hire is accused of raising finance
from Irish lenders on machinery already owned by UK finance houses,
while the Irish lenders themselves are to be sued by a number of
the UK lessors based on a charge of wrongful interference.
The machinery in question includes wheeled
excavators, impact and tracked jaw crushers, dump trucks and
rubbish compactors, ranging in value from £33,000 to £232,000
(€38,500 to €271,000).
Hitachi is to present a winding-up petition,
drawn up by law firm Salans, to Euro UK Hire’s London offices at
100 Crawford Street.
Although Hitachi does not have judgment
against Euro UK Hire, the debt to Hitachi on which the winding up
petition has been based has not been disputed, making a judgement
unnecessary.
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By GlobalDataHitachi will serve an informal demand for
repayment of its debts immediately, with a short time frame for
compliance, before presenting the formal winding up petition
against Euro.
This will take between two and three months to
be heard, with the result to be expected in September or
October.
Alongside Hitachi, Liberty Leasing and the
Hermes Group are also working with Salans to seek compensation from
finance houses Irish Life & Permanent (Permanent Tsb); Allied
Irish Banks (AIB Finance and Leasing); Bank of Ireland (Bank of
Ireland Finance); and National Irish Bank.
Dave Standish, head of KPMG’s leasing creditor
practice, was reported last month to be mediating a compromise
between the English and Irish lessors and indicated he would be
prepared to act as liquidator for Euro.
Court proceedings have already begun, with a
case underway for each of the English lenders against each of the
Irish lenders.
Close Asset Finance is also understood to be
engaged in a separate court action.
The English firms will seek compensation for
wrongful interference by the Irish lessors, based upon the market
value of the assets at the time of their second financing.
Test case
Despite the multiple court cases underway
in respect of each individual multiple financing dispute, the most
likely course of events once the Irish lenders have served their
defences will be for a lead or test case to be identified by the
English court.
After this test case has determined the
questions of law that arise from the claims, the outcome of all
other cases will be bound by its outcome.
This will avoid the high costs involved of
each English lessor proving its case against each Irish lessor.
In the meantime, it is understood that
Standish, in his current capacity as mediator, will continue to
broker an out-of-court settlement between Irish and English finance
houses.
“At present,” said Salans partner Kevin Heath,
“the Irish lessors dispute liability on the basis that they bought
the assets in good faith and without notice of the English lenders’
interests. This is not a defence to a claim for wrongful
interference.”
Many of the assets were acquired from
Kingswood Plant Hire Limited – a plant hire and sales company based
in County Kildare, Ireland.
The director of Euro, an Irish businessman
called Simon Mangan, is understood to be still on the run from
South Yorkshire Police, with units from the City of London Police
also said to be involved in investigations.
Aside from the four lessors taking action
reported above, another 16 are known to have signed agreements with
Euro between 2006 and 2007, including Lombard, Siemens Financial
Services and Barclays Asset & Sales Finance.
Salans hopes that more companies will join the
action against Euro.
“My firm is offering to act for all of the
English lessors to make this litigation as cost effective as
possible,” said Heath. “I am confident of recovering compensation
from the Irish lessors.”
Heath and Standish were known for encouraging
a “group mentality” among lessors mired in the fiasco surrounding
the administration of plastics manufacturer Global EPP (see The
stuff of nightmares), and are keen to foster a sense of
cooperation and trust in the Euro case also.
Standish, a well-known insolvency practitioner
in leasing circles, will hopefully facilitate smoother
communication between the UK asset finance houses as they are
arrayed against their Irish counterparts.
