What is in the papers?

13 September 2009

Round Up: Carroll In Last Gasp Attempt To Secure Two More Groups;
Banks Appoint Receiver To Ross Town Centre In Waterford; Wood
Preservative Company To Petition Court For An Examiner; Company Behind
O’Brien Sandwich Bars Rescue Asks Franchise Holders To Take Over
Leases; Parbind Sells Its Stock.

PROPERTY

Orthanc And Dunloe

The future of Liam Carroll’s business empire was in the balance at
the weekend as talks took place between the developer’s advisers and
his lenders over the fate of two further groups controlled by him.
Following the collapse of Carroll’s Zoe group last week, he is trying
to secure the future of Orthanc and Dunloe, which have combined
liabilities of €1.3 billion to €1.5 billion.

The Sunday Business Post reported “Carroll’s Advisers Attempt To
Secure Two Groups In Last-Gasp Bid For Survival”. Orthanc and Donloe
were not affected by the Zoe examinership applications but Carroll is
now trying to prevent his lenders from closing in on them as well. The
two groups, which control over half his property empire, owe money to
AIB, Bank Of Scotland (Ireland), Ulster Bank, Bank of Ireland and the
EBS Building Society.

Orthanc owes about €400 million and is insolvent. Dunloe has debts of
€1 billion but is managing to service most of them. However, the
groups have provided cross-guarantees to Zoe which means that the
banks could move on them.

It is expected that FGS accountant, Declan Taite, will be appointed
provisional liquidator to the two main companies in the Zoe group –
Morstan Investments and Vantive Holding – today (Monday).

Ross Abbey Town Centre

National Irish Bank has appointed a receiver to the Ross Abbey Town
Centre on the outskirts of Waterford city. It is one of the first
times that the Danish-owned bank has moved to take control of assets.
The bank has installed Tom Kavanagh, a partner with Dublin insolvency
specialists Kavanagh Fennell, as receiver over Jaytar, the company
behind the shopping centre.

Jaytar has liabilities of around €26 million, the Sunday Business
Post reported in an article headed “NIB Takes Control Of Shopping
Centre”. The company is operated by Noel Burke Developments, a Galway
firm that has built hotels, shopping centres and a number of housing
projects. It owns the Fitzwilton Hotel in Waterford and is behind
plans for a new hotel on the Connaught Laundry site in Galway.

The Ross Abbey Town Centre was completed last year but has not yet
opened. It includes shops, restaurants, a medical centre, gym and
other leisure amenities. It was to form part of a major residential
development of about 1,000 houses and apartments. National Irish Bank,
which is owned by Danske Bank, took possession of the site after
growing concern about millions of euro it had advanced to Jaytar.

Protim Abrasives

A firm that makes wood preservatives and employs 45 people is seeking
bankruptcy protection after amassing debts of €13 million. Protim
Abrasives is petitioning the High Court for the appointment of an
examiner after running into significant financial difficulties. The
company has informed the court that it intends to petition for an
examiner on Wednesday – Kieran Wallace, head of insolvency at KPMG
accountants, has been proposed.

In an article headed “Protim Abrasives Petitions For Examiner”, the
Sunday Business Post said the company had bank debts of €5 million,
most of it owed to National Irish Bank. Unsecured creditors are owed
in the region of €5 million, while a further €3 million is owing to
preferential creditors. In the event of liquidation the company would
have a deficit of €6 million, according to court documents.

Protim was acquired in 1999 by Osmose Inc, a US wood preservative
company based in New York. Some 73 per cent of its Irish business
comes from product sales, while it also has a sideline treating
timber. The firm has a showroom in Maynooth, Co Kildare.

RETAIL

O’Briens Sandwich Bars

The company behind the O’Briens Sandwich Bars rescue has told
franchise holders that it is willing to buy the business out of
liquidation – not just examinership – if they agree to take over the
leases on their premises. Under the current arrangement, the franchise
holders own their businesses but sublet their premises from the
company which, in turn, leases the outlets from a landlord.

AIL Ltd, owned by Graeme Beere and Denis Desmond, has written to the
franchisees claiming that this business model is unsustainable and it
has asked them to take over the leases and deal directly with their
landlords. AIL has said that if they accede to the proposal, they will
benefit from any rent reductions negotiated by O’Briens before it went
into examinership in July with debts of €4 million. The company ran
into trouble when it could no longer meet the costs of maintaining
expensive leases on non-trading premises.

In the letter, quoted in the Sunday Tribune under the
heading “O’Briens May Be Bought From Liquidation, Not Examinership”,
Beere says that AIL’s preferred option for the company is the
successful completion of the examinership process. “A liquidation of
the company may do reputational damage to the brand and to your
businesses and should be avoided. It would be our intention to pursue
a purchase of this business even if it was to go into liquidation but
we believe that every day of uncertainty has the potential to devalue
the brand and therefore the value of your investment.” Beere told the
Tribune that they had received a positive response from key
franchisees to their proposal.

Parbind

The liquidator to Parbind, the wine and champagne business founded
by telecoms and restaurant entrepreneur Emmet Memery, has put all its
stock on the block – 23,000 cases of it to be exact. Rebecca Wilson,
the head of corporate services at Wilsons Auctions, who is handling
the sale, was quoted in the Sunday Times as saying that they had been
besieged by wine merchants and wedding parties looking for cut-price
booze. The method of sale of the stock, mostly non-vintage champagne
and new world, French and Italian wines, will depend on demand.

The sale will provide little consolation for Memery who
has seen several of his businesses go bust this year. Parbind has
debts of €5.8 million. Total debts for five of his firms – including
the restaurant chain Lemongrass and Cellular Services, a mobile phone
company – stand at €18 million.

www.sbpost.ie

www.sundaytimes.ie

www.tribune.ie

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