Collapsed clothing group 'real controller' allegedly used €1m to buy two Thai villas

High Court Reporters

A clothing group, which is in liquidation, was allegedly stripped by a shadow director of more than €1 million to buy two luxury holiday villas in Thailand while it was in a precarious financial position, the High Court has heard.

The Born Clothing group of companies, which had 15 shops around the country, went into liquidation with debts of €7.82 million, including €2.2 million owed to Revenue. 

John Curley, who the court heard was previously the life partner of Born's sole director, Joan Lynch, claimed the company entered into a voluntary co-investment arrangement with him to buy the Thai properties, and it was "not a passive victim" of this.  

The properties were put in his sole name, and he claimed he invested €220,000 and was entitled to a 30 per cent share in them.  

His claims are strongly disputed by joint liquidators David O'Connor and Ian Barrett, who were appointed by the court in May.  

On Friday, Judge Brian Cregan granted Lyndon MacCann, for the liquidators, short service of proceedings seeking injunctions restraining Mr Curley from disposing of the properties and orders that he holds them on trust for the company.  

The application was made on a one-side-only-represented basis and comes back to a vacation sitting of the court on August 12th.

In an affidavit, O'Connor, on behalf of the joint liquidators, said the properties in question were Villa 3 Ban Shaba and Villa A5, the Breeze Villas, one of which is believed to have been let out for €3,505 per month on his behalf by the Kamala Falls Residential Resort. 

Between April 2022 and November 2024, various sums totalling nearly €1 million were transferred from the company for the purchase of the properties for his personal gain, O'Connor said. 

Curley has told the liquidators he was just an employee of Born's associated company Elland Distributors Ltd and an underpaid one.

The liquidators say that although he had been a Born director for two years and resigned in 2011, he was the de facto managing director and controller of the group. 

He exerted significant control over day-to-day operations, including dealing with employees, negotiating with landlords and giving personal guarantees in relation to finance. 

While the liquidators have been in contact with him through his lawyers and he is believed to still be living in Ireland, he has refused to provide an undertaking not to dispose of the properties and failed to engage constructively with the liquidation process, O'Connor said.

Until recently, Lynch's daughter Alice was a director of the company along with her mother. By the time of liquidation, Joan Lynch was the sole "de jure" director, but she was not involved in the day-to-day running of the business, he said. 

Curley claimed at all times he acted under the instruction of "those who controlled the company" and that he was an employee of Elland on a salary of €24,000. But O'Connor said the liquidators disputed this on a number of grounds, as he was the "controlling mind" within the company.  

Joan Lynch has told the liquidators she had no knowledge of the alleged co-investment arrangement.

Curley also had a €110,000 BMW 7 company car, which was four times his alleged salary and which he is believed to still be in possession of. 

O'Connor said there is "no credible justification" why any of the relevant Born companies' funds would be used to buy these properties, particularly given their liabilities to third parties, including to Revenue, at the time. The transactions made "zero commercial sense" and were demonstrably improvident. 

Foreigners, and foreign entities, are prohibited from owning land in Thailand but may acquire a 30-year lease on the property, O'Connor said. This means these are wasting assets, which meant there was an urgency to realising their value, he said.