Updated: 05/10/16 : 05:54:15
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Sligo owner of Clerys to receive extra €600k fee

The Sligo woman the centre of the controversy around the closure of iconic store Clerys is in line to be paid €600,000, it has emerged.

Deirdre Foley's Natrium emerged as the consortium behind the purchase of Clerys building, as part of a chain of events that led to the store's closure and loss of 460 jobs.

The Irish Independent reports that the store was sold by US private equity firm Gordon Brothers to Ms Foley's and Cheyne Capital's Natrium consortium for €29m.

Natrium kept the property arm and flipped the operating business to Jim Brydie, an insolvency practitioner who promptly put the business into liquidation.

Riverstown native Foley has a 20pc interest in Natrium and new accounts show Natrium is due to pay a fee of €600,000 to another firm owned by Foley, called FAM Assets Ltd.

The fee is repayable in June 2017 or on the disposal of the shares or assets of the Natrium firm that is looking to redevelop Clerys, OCS Properties, or on any early repayment of the shareholder's loans.

Sunk

A former Clerys worker said news of the payment would generate a lot of interest among former employees.

"It must be nice to get such a big sum of money," said former bedroom furniture department salesman Gerry Markey (54).

"With the sudden closure, we were sunk without warning. Clerys workers are still hurting. We should have got more than statutory redundancy payments.

"A lot of former loyal staff are aged in their 60s and their social welfare payments are being cut.

"So the news of someone getting €600,000 sort of sticks in the throat.

"We're still trying to get a meeting with her and Natrium. We deserve some answers about what happened."

The Natrium accounts disclose that FAM Assets has provided a loan of €1.9m to Natrium and the balance due had a net present value of €1.7m at the end of December last.

Pocketed

In addition, the Natrium accounts show that another firm owned by Foley, FAM Acquisitions Ltd, pocketed just over €200,000 for services provided to Natrium last year.

A note attached to the accounts show FAM Acquisitions Ltd provides services to the value of €259,450 to Natrium and €56,825 was outstanding at the end of December last.

The accounts also show the Natrium subsidiary behind the €150m redevelopment of Clerys last year, OCS Properties, recorded profits of €10.66m.

However, this is largely as a result of a €13.5m increase in the valuation of the Clerys property that had a book value of €31m at the end of December last. Cancelling out the paper gains made by OCS Properties Ltd, sister firm OCS Investment Holdings Ltd last year recorded a loss of €11.33m.

The Natrium accounts also show it is in line to receive management fees of more than €715,000 from the two OCS firms.

OCS Properties Ltd incurred management fees of €533,630 to Natrium and this amount was due to Natrium at the end of December last. Another subsidiary of Natrium, OCS Investment Holdings Ltd incurred management fees of €181,864 to Natrium and the entire balance was due to the firm at year end.

Foley and her firm, D2 Private Ltd, are currently challenging in the High Court an investigation by the Workplace Relations Commission (WRC) into the circumstances around the redundancy of the Clerys workers at the offices of D2 Private Ltd.

A note attached to the Natrium accounts states that it was not the employer of the workers made redundant and that OCS Operations Ltd was the employer and the redundancies were directed by the then provisional liquidators.

A ruling on the case has yet to be made.

Unexplained Payment

Meanwhile it has emerged this morning that Gordon Brothers, the Boston private equity firm that sold Clerys hours before it was liquidated last summer, were paid €3.65 million from the department store’s coffers in the run-up to the sale.

The largely unexplained payment, which is referred to only as “interest and fees” in Clerys company documents covering the period of the €29 million sale, was almost six times larger than a corresponding payment in the previous year.

Gordon Brothers and Malcom MacAulay, the chief operating officer of the firm in Europe and a former Clerys director, did not respond to questions posed by The Irish Times yesterday about the circumstances surrounding the fee.

The queries related to the services Gordon Brothers carried out for Clerys to earn such a large fee, why it was so much higher than previous years, and whether some of the money could have been left on Clerys’ balance sheet to help pay staff and creditors. The State was left to pick up the tab for redundancy payments to Clerys’ staff.

Natrium, the joint venture between developer Deirdre Foley and London hedge fund Cheyne Capital that now owns Clerys, sealed the deal on June 12th, 2015 by buying all of the shares of OCS Investment Holdings for €29 million.

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