Clerys sale still leaves unanswered questions

It's almost two years since the iconic property was sold...

A number of people on both sides of the controversial sales of Clerys Department Store in June 2015 are facing criminal charges brought against them by the Minister for Jobs, Enterprise and Innovation and the Workplace Relations Commission.

The series of transactions which led to the iconic store shut its doors took place two years ago and resulted in job losses for 130 staff who were directly employed by Clerys, while a further 330 positions with concessions who operated in the department store vanished overnight.

As the new owners prepare to turn the building into a pristine office, retail, and leisure location, a number of matters remain unresolved.

Who knew what when?

The most high profile person being charged is Deirdre Foley, the businesswoman whose firm is a minority shareholder in Natrium -  the joint venture which acquired the former Clerys business.

She’s facing three charges of breaking the protection of employment law when the store's workers lost their jobs, as well as one of impeding a Workplace Relations Commission Inspector.

Two other individuals, Mark Redmond from D2 and OCS Operations director, Brendan Cooney also face charges.

The former owners of Clerys, US retail firm Gordon Brothers, had restructured it into two separate firms.

OCS Properties, which owned the Clerys building – the only valuable asset – was the first.

The other was OCS Operations which employed 130 Clerys staff directly and controlled contracts with franchise retailers who employed some 330 more workers.

In 2015 OCS Operations was placed in liquidation within hours of the purchase by Natrium and the liquidators then proceeded to immediately issue redundancy notices to the employees concerned.

Ms Foley has said on the record that the decision to place OCS Operations in liquidation was not hers, or that of D2 or Natrium. It was decided independently by directors of OCS Operations Ltd, according to her statement.

This was said during a High Cort hearing concerned with allegations that the sale of the store happened after a series of secret meetings and that the decision to liquidate the company was not an independent one.

Should taxpayers fund Clerys redundancies? 

The State has already paid €2.5m in redundancy payments to former Clerys workers - but it is exploring ways to get some of this money back.

The Department of Social Protection told Newstalk last month that it is "actively pursuing recovery of this debt in line with its employer debt management policy and is a preferential creditor in the ongoing liquidation of OCS Operations Limited."

The Department also said it is "considering how the provisions of the Companies Act, including Section 599, may be used to recover the expenditure from the Social Insurance Fund."

This relates to whether the new buyers should be required to pay debts relating to the wound-up firm (the full details of this action are posted here).

Planning

The property business is now owned by Natrium and it has submitted ambitious plans to develop the building.

 

Last month a deal was reached between Clerys workers and the owners of the former department store.

Former Clerys workers will receive a 'significant' good will payment as part of the agreement. The service of ex-Clerys workers will be considered during the employment phase of the new development.

While the full terms of the deal are being kept confidential, it resulted in SIPTU withdrawing its objection to planning permission at the site.

It is set to feature a 176-bedroom hotel, retail units and office space. Some €150m will be invested in the project.