The immediate future of 105 jobs at one of the west's largest oil distribution companies has been secured after the High Court approved survival proposals put forward by an examiner.
Under the plans, Fate Park Ltd trading as Sweeney Oil and a related company Castlebar Oil Company Ltd, will be completely taken over by fuel company Tedcastles in return for a €12m investment.
Fate Park went into examinership in April as a result the company running into financial difficulties over cashflow constraints arising from the funding of subsidiaries within the group. Fate Park, which is involved in oil distribution, employs 105 people - 50 of which are drivers. It also has 16 depots, 65 trucks, two petrol stations and 15% of the market share in Connacht.
Under the Scheme of Arrangement put forward by examiner Billy O'Riordan of PWC, secured creditor AIB, which is owed €20m, will receive €6.6m. Another secured creditor, Nire Oil, will get €250,000 of a debt of €5m.
Unsecured creditors, including Esso which is owed €12.5m and Topaz which is owed €4.2m, will get a fund of €935,000 to divide between them, representing 5% of the total debt owed.
Investor designated creditors, will get a cash fund of €300,000, representing 47% of their debts, to divide between them.
Preferred creditors, including the Revenue Commissioners, will divide €200,000 between them, which is 100% of their liability.
The court heard that under the scheme, the directors of the company, including well-known businessman John Sweeney, will resign and be replaced by representatives of the new owners.
The scheme has also been approved by the Competition Authority, due to the fact Tedcastles is taking over the company.
Counsel for the examiner, Rossa Fanning, said the scheme contained proof that creditors would do better from the continuation of the business than they would if it were wound up.
However, senior counsel for Topaz, Andrew Walker, said his client was objecting to the scheme for a number of reasons, but particularly because it envisaged the writing-off of the 'astounding amount' of €27m of debt, owed to Fate Park by some of its subsidiary companies.
He said his client had supplied product to Fate Park, which had subsequently been sold.
However the proceeds of these sales had been used by Fate Park's subsidiary companies to fund investments in property, which had now 'come home to roost', he said.
As a result, there is no money to pay his client but the debt was being written-off without any attempt being made to recoup it, he claimed.
Mr Walker proposed that if the companies were liquidated, in time the property investments may yield some return which could benefit his client.
Confirming the scheme of arrangement, Mr Justice Hedigan said the grounds raised by Mr Walker were not sufficient to reject the proposals.
In all Schemes of Arrangement, he said, there will be some element of unfair treatment.
He said: 'that is life' and 'to an extent people have to get over it as the alternative if not very palatable either'.
