The High Court has appointed an interim examiner to a Co Waterford based chicken processing company that employs more than 130 people.
Mr Justice George Birmingham appointed Michael McAteer of Grant Thornton as interim examiner to both Cappoquin Poultry Ltd (CPL) and to a related company Cappoquin Poultry Holdings.
This happened after it was informed the business has debts of €6m.
Cappoquin Poultry's largest unsecured creditor Henry Good, which is owed €3.9m for supplying chicken feed to Cappoquin Poultry, petitioned the court for Mr McAteer's appointment on the grounds including that CPL is insolvent and to prevent the chicken processor's assets from being stripped.
CPL's directors are Perwaiz Latif with an address in Derby, England and Zahid Hussain of Port Na Habhann, Cappoquin Co Waterford.
CPL supplies local farmers or growers with one day old chickens, who house and feed them, until such a time that they are delivered to CPL who process the chickens.
CPL has been in operation since 2008 after it acquired the assets of Michael D O'Connor Ltd t/a Cappoquin Chickens, which had gone into liquidation.
If appointed Mr McAteer will have up to 100 days to come up with a scheme, which if approved by the firms creditors and the High Court, will allow the company to continue to trade. During the examinership period the business is protected from its creditors.
The application was made ex-parte, with only one side represented in court.
Moving the petition Ross Gorman Bl for Henry Good Ltd said his client believes CPL is insolvent, but is also of the opinion that CPL's business is viable and has a reasonable prospect of survival. Counsel said an independent accountant's report into the business was being prepared.
Counsel said that Kinsale based Henry Good Ltd has been supplying feed for both CPL and its predecessor for many years. Counsel said that the level of CPL's debt grew from €346,000 in December 2010 to €3.98m as of last week.
Henry Good Ltd sought payment for its services but CPL has been unwilling or unable to do so, counsel said.
Counsel said that CPL has got into difficulty for a number of reasons including the lack of a managing director resulting in the lapse of business practices.
CPL had also failed to collect a €2.69m debt owing to it by a company in Derby which it understands is owned by Mr Latif's brother.
Counsel added that one of the main reasons Henry Good wanted an examiner appointed was due to its concerns that CPL's directors have attempted to move essential machinery and equipment from Cappoquin.
Last week a number of CPL's chicken suppliers blocked the entrance to CPL's premises in order to prevent machinery being removed.
This action arose after three items of machinery were discovered in a truck, counsel said. The business could not operate without this machinery, and the livelihoods of the chicken suppliers would be seriously damaged, counsel added.
Henry Good wanted an examiner appointed to protect these assets, counsel added.
Counsel said his client had been in negotiations with CPL to buy the business, however withdrew after CPL's director's sought to alter terms that had already been agreed.
The adjustments counsel added made it no longer viable from his client's perspective to go ahead with the deal.
Counsel said his client's application for the appointment of an examiner was being supported by the majority of Cappoquin Poultry's suppliers.
Mr Justice Bermingham made the matter returnable to a date later this month.