A Co Monaghan-based marine biotech company has applied to the High Court seeking protection from its creditors while it attempts to finalise a rescue plan that would ensure its survival.
The application has been brought on behalf of Bio Marine Ingredients Ireland Ltd, which employs eight staff.
The company, based at Lough Eglish, Castleblaney, makes ingredients from fish for human and animal foods. It is hoped the company can survive if certain proposals can be agreed with its creditors.
The firm got into difficulty due to factors including higher than expected research and development costs, potential customers taking longer than expected to accept its products, and the underperformance of a contract with a Korean supplier due to the impact of Covid-19.
Arising out of its insolvency, the firm entered the Small Company Administrative Rescue Process (SCARP), which is designed to help insolvent smaller businesses to reorganise in a cost-effective way.
For the SCARP to succeed, the company has asked the court to put a temporary halt on all legal actions brought against it by its creditors.
On Wednesday, Arthur Cunningham, instructed by solicitor Graham Kenny of Eversheds Sutherland, for the company, told Mr Justice Mark Sanfey that six creditors have threatened the firm with either legal or enforcement proceedings.
The creditors, who between them claim they are owed more than €400,000 by the firm, include its landlord Americold Ltd, Bord Gáis Energy and various service providers.
Unlike the examinership process, counsel said, companies that enter the SCARP do not automatically obtain protection from their creditors while it is underway.
To get such protection, counsel said, firms must make a court application, under the Companies Act, for orders preventing creditors from bringing proceedings over the debts during the rescue period.
Counsel said insolvency practitioner Declan de Lacy has been appointed as the company’s process adviser. Mr de Lacy has found that the company has a good prospect of survival, counsel said.
The company expects to increase its sales volume in the near future as several major new customers have come on board.
It has also secured additional investment, counsel said.
Mr Justice Sanfey, on an ex parte basis, granted the company permission to serve short notice of the application on the firm’s creditors.
The court directed that all of the creditors and Revenue are to be put on notice of the company’s application.
The matter will return before the High Court next week.
