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Examinership success stories
27 March 2009
The value of the examiner’s role in the insolvency process has been questioned in recent months. We take a look at some recent cases where firms have survived having sought court protection.
ISTC
The International Securities Trading Corporation (ISTC) last week announced profits of almost €1 million for the nine-month period since it emerged from examinership.
ISTC, which lends capital to banks, went into examinership in November 2007 with losses of more than €800 million. Under the scheme of arrangement proposed by the examiner, creditors received 12 per cent of their debts and investment bank Collins Stewart invested €5 million to take ISTC out of examinership and allow it to continue trading.
AgCert
Irish carbon emissions trader AgCert International sought the protection of the High Court in February 2008 after it failed to generate enough carbon offsets to satisfy customer orders. It had accumulated debts of €90 million.
In June, however, examiner David Hughes of Ernst & Young arranged a deal with power giant AES Corporation, which was AgCert’s largest creditor. The US firm took full control of AgCert, writing off €20 million of its own debt and investing €7 million to pay other creditors.
The Golden Grill
The Golden Grill in Donegal, one of the country’s largest entertainment venues, is one of several pubs that have successfully used the examinership process.
The 30-year-old establishment ran into trouble after an over-budget renovation and a period when it couldn’t trade due to licence infringements. It went into examinership in July 2008 with debts of €8.2 million.
Examiner Michael McAteer of Grant Thornton arranged a survival package. The Golden Grill was taken over by Donegal oil and property company the Tinney Group, which invested nearly €3 million in loans and also secured more than €3 million in bank debts.
Katies Cakes
Cisti Gugan Barra – the Cork firm behind the Katies range of confectionary – went into examinership last year with accumulated losses of €550,000 and liabilities of €1.1 million.
KPMG’s Kieran Wallace was appointed examiner and Irish food firm Jacob Fruitfield agreed a deal to take over the company, investing around €700,000.
Drogheda United
League of Ireland Premier Division club Drogheda United emerged from examinership in January having successfully raised the investment it needed to survive. The club had debts of more than €700,000 but, after it raised over €300,000 from supporters, the High Court approved examiner Kieran McCarthy’s survival plan.
Fellow Premier Division side Cork City also came out of examinership in October last year following investment from new owner Tom Coughlan.
Ardmore Technologies
The Waterford-based broadband network firm went into examinership in September 2007 after major cost over-runs on a wireless contract. It had liabilities of €2 million.
Under the scheme of arrangement presented by Neil Hughes, Ardmore sold its non-core assets, including its broadband network, and restructured its business. Preferential creditors received 16 per cent of their debts, while unsecured creditors received 8 per cent.
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