THE COMPANY behind the failed Irish franchise of furniture retailer Habitat does not have enough assets to pay its unsecured creditors or its full borrowings from Bank of Scotland (Ireland), according to the estimated statement of its financial affairs.
Conai Designs (Ireland), which is in receivership, has assets of €2.35 million, according to a document circulated at its creditors’ meeting yesterday.
But a bill of €627,899 to its preferential creditors and a debt of €2.25 million to Bank of Scotland (Ireland) means its accounts show an estimated deficiency in shareholders’ funds of €2.13 million. Unsecured creditors are owed a total of €1.43 million.
George Maloney of Baker Tilly Ryan Glennon, the appointed receiver of Conai Designs, took control of the assets of the company last week.
No Habitat customers were present at the creditors’ meeting in Dublin yesterday. Habitat UK has said it will honour all outstanding customer orders placed with Conai Designs, which went into voluntary liquidation and closed its stores in Dublin and Galway earlier this month.
The business was owned by retailer Malcolm Brighton, a Londoner who acquired Habitat’s Irish franchise in 2002 from the foundation that owns the commercial interests of Ikea-founder Ingvar Kamprad and his family.
In 2005, Habitat spent more than €2.5 million fitting out its Dublin store. But the company ran into trouble when sales collapsed due to the downturn in the housing market and the wider economic slowdown, which meant consumers were reluctant to spend money on big-ticket items. It also faced competition from cheaper retailers, such as Ikea’s store outside Belfast.
Conai Designs’ list of unsecured creditors shows Habitat UK is the creditor that is owed the most, with a sum of €558,343 owed to the company. Mr Brighton is owed €150,530. AIB is owed €158,037, while the company also owes €187,000 in respect of leases.
Among the preferential creditors, who will eventually be repaid from the sale of its assets, Habitat employees are owed a total of €52,293 and the Revenue Commissioners are owed a VAT bill of €318,000. Dublin City Council is owed rates of €89,093, while Galway City Council is owed €28,643.
