This story was first published in the Irish Mail on Sunday on 10/07/2011.
By: Michael O’Farrell
Investigations Editor
AS MANY as a thousand vulnerable pensioners face frightening uncertainty as Ireland’s biggest nursing home group risks being dragged into a legal morass.
The group, which operates 16 homes nationwide, is co-owned by property developers who have run up €50m debts and face legal action by creditors.
An Irish Mail on Sunday investigation has revealed that the developers behind Mowlam Healthcare Ltd have been transferring ownership of the firm into their wives’ names – along with other assets.
And even as the group faces massive exposure to its owners’ personal bank guarantees, the almost 1,000 residents face further worry from another quarter. Reports by HIQA over the past two years show significant lapses in standards of care.
Mowlam was set up and owned by Limerick developers John Shee and Joe Hanrahan, and their property group Cracken Holdings. A third owner is Patrick Shanahan, former chairman of Shannon Airport.
The pair have transferred most of the shares they and their company held in the nursing-home business to their wives and Mr Shanahan.
Both developers are facing financial ruin and are already fighting legal actions over debt. AIB obtained a judgment against them for €23.5m each in March after a court case over an incomplete retirement village in Killarney.
And that may just be the beginning. Both gave personal guarantees for the debts of their network of building firms to Anglo Irish Bank, AIB and Bank of Scotland, That means the banks can, in the event that the pair fail to repay the millions they owe, move against their personal assets.
And until May 16, their best asset appeared to be their stake in Mowlam. The families controlled 66% of the firm.
On that date they transferred all their shares to their wives, Vivienne Hanrahan and Mary Shee, and to Mr Shanahan and his wife, Annette.
But the banks may see the recent share transfer as an attempt to put the assets beyond the banks’ reach.
One of Mr Shee and Mr Hanrahan’s companies, Wadlow, is carrying €24m in loans advanced by Anglo while the pair have given letters of guarantee to AIB for €18m in loans advanced to another company, Megcourt Ltd.
Another firm, Paland Developments Ltd, posted losses of €1.7m in 2009 and was carrying €16.1m debt.
That much alone comes to around €58m in loans and debts to creditors. Several of their companies’ accounts carry a telling note to the effect that the firm is ‘unable to meet commitments to its banker as sanctioned and is operating outside of its credit terms’.
Mr Shee and Mr Hanrahan have also moved to transfer assets such as their family homes and several apartments into their wives’ names.
Mr Shee transferred the family home – Lishee, South Circular Road, Limerick – and a Ballsbridge apartment to Mary in 2009.
Last week, Mr Hanrahan transferred the family home Cedar Cottage, Castletroy, Limerick, to his wife. The mortgage on the property was paid off weeks before the transfer .
The developers have also each transferred three Limerick apartments that they jointly owned to their wives. It also appears that they have moved to separate the nursing home business from the debt crisis at their other companies.
Although Mowlam was profitable to the tune of €1.6m last year, it was linked to the pair’s main holding company, Cracken Holdings.
In recent months, hundreds of thousands of preference shares in Mowlam Healthcare Ltd that had been held by the pair’s main property development company, Cracken Properties (Holdings) Ltd, have been returned to the nursing home company.
In addition, teacher Mrs Shee and interior designer Mrs Hanrahan have been installed as directors of Mowlam and have set up a new company, Complete Healthcare Services Ltd, which has begun running one of the Mowlam homes.
The women don’t appear to have previously been closely involved with any of the nursing homes. They first became shareholders in 2008.
Last night, a spokesman for Mowlam declined to answer questions about whether these changes were an attempt to move assets out of the reach of creditors but reassured residents and relatives that the financial pressure on the owners would not impact on patient care.
‘Mowlam Healthcare operates successfully as a stand-alone entity and is separate to and in no way influenced by any issues faced by John Shee and Joe Hanrahan,’ he said.
‘Mowlam Healthcare is committed to enhancing the quality of life of all our residents by providing high quality, resident-focused nursing care, delivered by highly skilled and experienced professionals in modern purpose built nursing facilities.’
Celtic Tiger pair built huge property empire.
By: Michael O’Farrell
THEY were the duo who represented the West in the league of Celtic Tiger developers of the boom.
John Shee was a one-time partner with accountancy firm Grant Thornton, and Joe Hanrahan a successful catering and hotel entrepreneur. Their main property holding group, Cracken Properties (Holdings) Ltd, used more than half-a-dozen related and subsidiary companies to build swathes of apartment blocks and other commercial developments in and around Limerick.
Now Mr Hanrahan, 49, and Mr Shee, 60, are offloading their interests in their best performing asset, their ownership stake in the Mowlam nursing home chain.
Fortunes on the wane, their most recent property deals bear a resemblance to other ailing developers who have transferred assets without mortgages or outstanding borrowings into their wives’ names – so far nine properties in total.
Watchdog’s scathing inspection reports
By: Michael O’Farrell
REPORTS of inspections by HIQA reveal that while many of Mowlam Healthcare’s 16 retirement villages receive praise, a quarter come in for damning criticism.
In February of this year Mowlams was successfully prosecuted following the death of a patient who swallowed a latex glove in its Waterford home.
In October 2009 inspectors give a scathing assessment of Mowlam’s Sligo home, saying it did not meet the required standards of care. Inspectors expressed ‘significant concerns for the safety and care of the residents, fire and evacuation procedures, complaints and medication management practices.’ HIQA also stated that improvements were required to cleanliness, infection control and staffing levels at the Sligo facility and noted a smell of urine on the ground floor of the centre, as well as soiled cleaning cloths and dried pieces of debris in sluice sinks. Some of the contents of two basic first aid boxes were found to be out of date since 2008.
It also raised the prospect of patients having to watch their roommates die because they could not be moved to other rooms.
The report said staff were unable to satisfactorily describe how they would maintain respect and dignity if a resident died at night, given that beds in shared rooms could not be moved without being disassembled.
Mowlam’s home in Moate, Co Westmeath was inspected in October 2009 after concerns received by HIQA ‘following the discharge of a resident from the centre with an “ulcerated wound” and “sacral pressure areas”‘.
Inspectors were particularly concerned about the care of one resident with a grade four sacral pressure sore which was Methicillin-Resistant Staphylococcus Aureus (MRSA) positive and had been ‘in existence for over one year.’ A grade four has been defined as ‘extensive destruction, tissue necrosis or damage to muscle, bone or supporting structures with or without full thickness skin loss’.
Yet despite concerns being first expressed in 2009, similar problems were found to exist at the home in February this year.
Mowlam’s Swords home was also criticised following a January 2010 inspection.
‘Overall, the centre did not meet all the requirements of the legislation and the Authority’s standards. While there was some evidence of good practice, there were significant issues around safety and care of residents, use of day space, food safety practices, quality and choice of meals, recruitment and retention of staff, infection control and recording and responding to complaints.’
