Rescue for Pub Chain Approved

Posted: Tue, 05 May 2009 14:30:28 +0100

Group owes €26m but has reasonable chance of survival, court told

By Tim Healy

Friday December 05 2008

A HIGH Court judge yesterday approved a rescue process for 21 of Dublin's best known bars and restaurants operated by the Thomas Read group.

The group of companies employs more than 400 people, has combined debts of €26m and is said to have a reasonable prospect of survival provided certain conditions are met.

Ms Justice Mary Finlay Geogegan yesterday confirmed Kieran McCarthy of accountants Hughes Blake as examiner to Sharmane Ltd, the parent company of the Thomas Read group, and as examiner to 13 of the 14 companies operating the bars.

She adjourned the application for examinership for one company.

Under the examinership law, people owed money by a company in difficulty cannot close it down until the examiner has looked for ways of keeping it in business.

The judge said she was satisfied, from a report of an independent accountant and a tentative view in a short interim report by Mr McCarthy, that the companies are insolvent but have a reasonable prospect of survival in whole or in part if a number of conditions are met.

Gary McCarthy, counsel for the group, said the conditions include securing additional investment, restructuring debts and resolving "the situation" with the group's former managing director Mark Leavey, who initiated court proceedings over being made redundant.

All but three of the companies are trading profitably and the directors believe they can survive as going concerns, the court heard.

Lyndon MacCann, counsel for the examiner, said the companies would not need external finance to keep going during the protection period and the examiner had also received nine unsolicited queries expressing interest in either the group itself or assets within it.

The judge adjourned the application to confirm examinership for the 14th company - Floridita Ireland Ltd, which operates a bar and restaurant in the Irish Life Centre, Abbey Street - after hearing the agreed transfer of 60pc of the shareholding of that company to Sharmane Ltd is not complete and therefore, does not yet fall within the legal definition of a related company.

Rossa Fanning, counsel for the largest secured creditor, ACC Bank - which is owed €15.2m - said the bank was neutral on the examinership and was "heartened" the examiner had received nine queries.

Among the group's other creditors are the Revenue, which is owed €2m; Ulster Bank, owed €5.6m; Allied Irish Bank €4.6m; Diageo Ireland €1.1m and Lombard Ireland €1m.

The Thomas Read companies operate 22 bars and restaurants in Dublin city, Dublin Airport and Dun Laoghaire.

The court has heard the companies had been affected by the economic downturn but their core business was strong and most are trading profitably.

- Tim Healy