Examiner appointed to owners of Dublin pub Flannery'sTuesday 05 November 2013 22.22
The High Court has appointed an interim examiner to a group of companies that own and operate the well-known Dublin city centre pub Flannery's, which employs 39 people.
The application for the appointment of an examiner was made just hours after the High Court, in separate a judgment, cleared the way for receivers to be appointed over the pub.
Ms Justice Mary Finlay Geoghegan said she was satisfied to appoint Mr Neil Hughes as interim examiner to Camden Taverns Ltd and related companies Camden Street Properties Ltd and Camden Street Investments Ltd, which own and operate the pub.
An independent accountant's report said the business had a reasonable prospect of survival if certain steps were taken.
The court heard the companies, whose directors petitioned the court for Mr Hughes's appointment, are insolvent and unable to pay their debts as they fall due.
The court heard the companies got into financial difficulties due to an unsustainable level of debt. They owe about €11 million to Dublin based venture capital fund Vanguard Property Finance Ltd.
The companies' directors, Mr Ian Redmond, Mr Michael Ormonde and Mr Colin Dolan also blame the decline in the pub trade for their current difficulties.
Ross Gorman said the business had made a profit every year since 2008 when the firms acquired the pub.
The examiner would be able to put together a scheme of arrangement, which if supported by the creditors and approved by the court, would allow the firms to continue to trade.
The directors were also confident that during the period of protection of securing fresh investment, which would allow them to service the debt owned to Vanguard, who they were in talks with.
Counsel that it was in the best interests of the employees that an examiner be appointed. If a receiver was appointed and the pub was sold the new owners would be entitled to vacant possession of the premises and the employees could lose their jobs, counsel said.
Ms Justice Finlay Geoghegan, who made the matter returnable to 14 November, appointed Mr Hughes as interim examiner, on an ex-parte basis. The judge said she had some reservations and did not want to prejudice Vanguard's position as secured creditor.
She said she was only appointing Mr Hughes as interim examiner on the condition that in the event he is not confirmed as examiner any costs he incurred would not come out of the company's assets.
Last September, the companies secured a temporary injunction preventing Vanguard from appointing a receiver over the premises at 6, 7, 8 and 8 A Camden Street, where Flannery's pub is located.
In his judgment, Mr Justice Kevin Cross ruled the companies were not entitled to have the injunction left in place pending the final outcome of their action against Vanguard.
The judge vacated the injunction because he was satisfied damages would be an adequate remedy if the companies were successful in their action and due to their "culpable lack of disclosure" by the companies when they applied to the High Court for the injunction.
Last February, Vanguard acquired a €13 million loan advanced to Camden Street investments by Bank of Scotland after BOS decided to exit the Irish market. The loan was used to purchase the pub and adjoining premises in 2008.
Vanguard claimed the pub owners defaulted on the loan agreement. It called in the loan and last September informed the owners of its intention to appoint a receiver over the premises unless the full amount due was paid.
Seeking the injunction, the companies argued no default on the loan has occurred and Vanguard was not entitled to put the bar into receivership. Vangaurd disputed the claims and asked the court to vacate the injunction.
In his ruling, Mr Justice Cross accepted the companies had made out an arguable case, and that the balance of convenience favoured the granting of an injunction.
However, the judge agreed with submissions by Vanguard that damages would be an adequate remedy for the companies should they be successful in this matter.
The judge also found that "a number of significant facts" plainly within their knowledge" were not disclosed to the court by the companies when they applied for the injunction.