Delta crash followed managerial bust-up over accounts
Date: 11-09-2006
Source: The Sunday Times
PATRICK O?CALLAGHAN, the founder of Delta Off-Site Solutions, a Cork-based construction company that collapsed last week with the loss of 180 jobs, was ousted from his position as chief executive of the company during the summer by its majority shareholder in a row over the company?s accounts. Conor Phelan, Delta?s majority shareholder, who made ?22m when he sold a chain of 10 pharmacies three years ago, removed O?Callaghan, who won the 2004 Ernst & Young Emerging Entrepreneur of the Year award, from his managerial role eight weeks ago after the bust-up. Phelan will incur personal losses of up to ?5m with the collapse of Delta, which made prefabricated bathrooms and was only established four years ago. O?Callaghan and Eric Lisson, another director, still hold about 35% of the company?s shares. Peter Hanan, the former chief operating officer of Superquinn, also held a minority stake in the company. The company, which was put into receivership by Bank of Scotland (Ireland) last week, owes its unsecured trade creditors up to ?5m. There is little chance of the company suppliers being paid. In recent weeks, Delta had spoken to a number of construction firms seeking emergency funding, including Sean Mulryan?s Ballymore Properties and timber-frame home-builder Kingspan Century, headed up by Gerry McCaughey. Delta had a turnover of ?17m last year, and had been projecting sales of up to ?40m this year. O?Callaghan told The Sunday Times that the company had run into difficulties because it was expanding too fast. ?It was undercapitalised to achieve the growth that we had been planning. There were discussions to bring in a strategic investor, but it was too little, too late,? said O?Callaghan. Paul McCann of the accountancy firm Grant Thornton, who was appointed as the liquidator by Bank of Scotland, is currently seeking a buyer for the company. He is believed to be planning to look for an offer by reappproaching the firms with which Delta had previously been in negotiations. Limited production will continue at the company?s Macroom factory for the next few weeks to fulfil outstanding orders. Phelan said: ?I very much regret the problems the company has gotten into. I?m very sad for all those who will lose their jobs as a result.?
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