Examiner appointed to waste disposal group
Updated: Thursday, 11 Apr 2013 17:05
The High Court has appointed an interim examiner to the largest collectors of domestic waste and recycling operator in the west of Ireland.
Mr Justice Brian McGovern granted the protection of the court to Bruscar Bhearna Teoranta and its subsidiary Joe McLoughlin Waste Disposal Ltd.
The Judge said he was satisfied to appoint chartered accountant Mr Neil Hughes as interim examiner after being informed that the firms have a reasonable prospect of survival if certain steps are taken.
Barna Waste, based in Carrowbrown in Galway and Joe McLoughlin Waste Disposal, based in Co Leitrim, have 30,000 wheelie bin customers in Galway, Roscommon, Mayo, Leitrim and Sligo and employ 270 people.
The group handles industrial, commercial and domestic waste and operate waste transfer stations, a composting facility as well as a recycling site. Its creditors include Bank of Scotland, which it owes more than €9m.
The firms, which the court heard are insolvent and unable to pay their debts, petitioned the court to appoint Mr Hughes of Hughes Blake as interim examiner in a bid to secure fresh investment in the firm.
The group's directors fear that attempts by Bank of Scotland to sell their assets could result in job losses and creditors not being paid.
The company's difficulties are caused by factors including the economic downturn, increased competition, increase in costs and levies.
The company's directors are Sean and Annette Curran of Derryloughane East Spiddal Co Galway. They set up Barna Waste in 1989, and acquired JMWD in 2009.
The court heard that on a going concern basis the group has a deficit of €7.3m, compared to a deficit of more than €11m if it was liquidated.
Yesterday Ross Gorman said his client's main difficulty was that it owed more than €9m to Bank of Scotland. The group had an annual turnover of €26m and was profitable, but was unable to service the bank debt, counsel added.
The directors wanted to enter the examinership process in a bid to secure new investment, and put together a scheme of arrangement that deals with all of the liabilities due to creditors.
The directors believe that if it is possible to restructure the firm's bank debt in the examinership process the group's prospects of survival are very good.
Counsel said that earlier this year the bank installed an interim managing director/operations manager to take over the day to day running of the companies.
The bank then hired the firm Grant Thornton to find a buyer for the firm's assets, and five parties have shown an interest.
Counsel said bank told the Currans that as part of the sale process the group's assets would have to be transferred to a new company and the firms would have to be liquidated.
The Currans were not involved in the sale process, and potential buyers were told not to contact them, counsel added.
Counsel said that the Currans are concerned at the plans to sell just the assets and not the companies themselves. Trade creditors were not informed told about the Bank's plan to sell the groups assets.
The Currans fear that under the bank's plans creditors, including suppliers, might not get paid. Employees were not being informed about the nature of the sale process, which could jeopardise a number of jobs, the directors said.
Already there were several interested parties.
Counsel said that in an examinership process the directors are confident that a consortium can be put together to fund a scheme of arrangement.
Counsel said that if appointed Mr Hughes could deal with any deadlock between the bank and the directors over the day to day running of the firms. He would also be able to give comfort and clarity to the firms employees and creditors.
Counsel said that the directors feared that the firm's operations could be jeopardised unless an interim examiner was appointed.
Key suppliers needed to be reassured so that the companies could continue to trade, counsel said.
These suppliers include the parties that service and supply fuel to Barna Waste's bin lorries. Any loss of its services could have an environmental impact, counsel continued.
Mr Justice McGovern said that in the circumstances he was satisfied to appoint Mr Hughes as interim examiner to the firms. The Judge made the matter returnable to a date next week.