THE HIGH COURT has appointed an interim examiner to the operator of a Dublin city centre hotel and bar that employs more than 50 people.
Justice Caroline Costello today said she was satisfied to appoint insolvency practitioner Tom Murray as interim examiner to JJ Red Holdings, the company that operates the Dublin Citi Hotel and the Trinity Bar & Venue on Dame Street.
The judge said she was satisfied the company was insolvent and unable to pay its debts but that an independent expert report presented to the court said that if certain steps were taken it had a reasonable prospect of survival as a going concern.
The company, which has been operating a 27-bedroom hotel since 2006, has 40 full-time and 14 part-time employees and sought the protection of the court arising out of a dispute with its landlord Henciti, over claims for arrears of rent allegedly due.
The most recent accounts for the firm, to the end of 2014, show it made a profit of around €3,500 for the year, however it still had accumulated losses of more than €1.2 million at the end of the period.
Seeking Murray’s appointment, Stephen Brady Bl for JJ Red Holdings said proceedings arising out of the dispute over the rent arrears had been settled in July. As part of the terms of settlement, it had been agreed that JJ Red Holdings would make a number of six-figure payments to the landlord between July and the end of the year.
If the agreement was defaulted on the landlord was entitled to reliefs including to take possession of the premises again.
Missed payment
While the first payment was made, JJ Red Holdings was unable to make the second payment. This, counsel said, was because his client believed it would be provided with the monies from its bank allowing it to pay the sums agreed.
However for some reason only known to that bank the money was not available.
Counsel said his client had entered into the settlement talks with the landlord in good faith and believed funds would be available allowing them keep their side of the settlement agreement.
As a result counsel said that, in order to protect the business, which has been in existence since 2006, and maintain jobs, the company was seeking the appointment of an examiner.
It was in all parties’ interests that an examiner be appointed to see if a scheme of arrangement can be agreed with the company’s creditors, counsel said. If the scheme is approved by the court it would allow the firm continue to trade into the future, counsel said.
Counsel said the business is successful and had returned to profitability in recent years following the crash in 2007. There were also plans to expand the hotel, which would increase its profit levels, counsel added.
The judge, noting the settlement agreement in relation to the dispute over rent arrears, had expressed some initial concern about the application. However after considering factors including the employees at the business she said she was satisfied to appoint Murray as examiner on an interim basis.
The matter was adjourned to September.
Additional reporting Peter Bodkin
Written by Aodhan O’Faolain and posted on Fora.ie
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