Court hears legal row threatens 550 jobs at the Irish Examiner

Monday 08 April 2013 17.49
The Irish Examiner operates out of a building on Lapps Quay in Cork
The Irish Examiner operates out of a building on Lapps Quay in Cork

A legal row between the Irish Examiner Ltd and the landlords of the Cork building from which it operates poses a risk to more than 550 jobs, the Commercial Court has heard.

Kilquane Ltd is seeking court orders to prevent IEL continuing to use the building at Lapps Quay in Cork.

The offices are used under a lease agreement between Kilquane and Examiner Publications Ltd, which is in receivership.

The dispute began following the restructuring of the Thomas Crosbie Holdings (TCH) media group.

The case was admitted to the Commercial Court.

The court heard today Kilquane has "absolutely no interest" in dealing with IEL given its behaviour to date and "cynical" attitude concerning contractual and leasehold obligations.

The property is valued at €7.32m with an estimated €650,000 per year rental value.

Kilquane claims Examiner Publications Cork Ltd (EPC) entered into 20-year leases in 2008, dating from 2006, with Kilquane to occupy parts of the building over three floors and was not entitled to assign leases to IEL as part of the TCH restructuring.

That restructuring included EPC and various TCH companies being placed in receivership last month.

Kilquane also claims default for more than two years on rent payments, with €900,000 in outstanding arrears. Separate proceedings have been taken over the rent issues.

Senior Counsel for Kilquane, Michael Howard, told Mr Justice Peter Kelly his client was not interested in mediation, as IEL was trespassing on the premises and rent payments had been "unilaterally halved" for two years.

The lease was between Kilquane and TCH and could not and should not have been assigned without Kilquane's consent, he said.

Any risk to jobs was created entirely as a result of the restructuring and the ignoring of obligations to Kilquane, he said.

The court heard IEL's solicitors wrote to Kilquane last month stating it wished to agree a new tenancy and was willing to pay 50% of rent due under the leases as an interim measure.

Kilquane refused to meet and said it would not accept a cheque from IEL for €100,000 to cover rent from March to May 2013.

IEL was prepared to ignore the leases and sought to pressurise Kilquane into granting new leases at much reduced rent "by blithely entering into possession of the premises" and using them for its own commercial purposes "in blatant disregard" of Kilquane's property rights and commercial interests, Kilquane claimed.

Una Tighe, for IEL, said the dispute should go to mediation. She said 550 jobs are involved and a business continues to operate from the premises.

The new company operating the Irish Examiner is a highly regarded business achieving significant cost savings and it expects to be profitable by the end of this year, she said.

It was in both sides' interests that any transfer of the property should be affected in an orderly fashion, she added.

Mr Justice Kelly said, while restructurings are commonplace in this climate, none allow the laws of landlord and tenant and constitutional property rights to be set aside.

In the circumstances, he was not surprised Kilquane had said it was not interested in mediation and just wanted to recover possession.

Kilquane regarded IEL as a trespasser and, while some might see that as "a blinkered notion", restructuring did not give a licence to trespass.

While he personally was a strong supporter of mediation, both sides had to agree to enter that process, he said.

He made orders for the fast-tracking of the proceedings in the Commercial Court and listed the injunction application for hearing on 8 May.

Issues related to the rent arrears were also adjourned to that date.