THE APPOINTMENT of an examiner to the Xtra-vision chain of stores has been confirmed by the High Court.

The company, which employs 1,300 and has 180 shops across Ireland, was granted court protection from creditors last month after it said it was insolvent and unable to pay its debts because of cash flow difficulties.

Yesterday Mr Justice Brian McGovern said he was satisfied to confirm David Hughes, of accountancy firm Ernst and Young, as examiner of Xtra-vision. Mr Hughes was appointed interim examiner last month.

The examiner has up to 100 days to devise a rescue plan for the firm which will then be put before creditors and the High Court.

US firm Blockbuster sold Xtra-vision to Irish firm Birchall Investments in 2009 and Birchall is prepared to invest a further €6 million in the company if a scheme of arrangement is approved, the court heard.

Rossa Fanning, for the examiner, said Mr Hughes, in an interim report to the court, had said he had found nothing of significance that would cause him to question an independent accountant’s view that Xtra-vision has a reasonable prospect of survival as a going concern.

The company’s difficulties were caused by factors including falling revenues, a decision by two providers of trade credit insurance to Xtra-vision’s suppliers to withdraw their coverage and poor trading figures caused by the bad weather over the Christmas and new year period, counsel said.

High rents were also problematic. Moreover, while the company had taken steps to reduce its overheads, it was able to cut property rental costs by just 8 per cent, counsel said.

It was envisaged, during the period of examinership, applications would be made to the High Court to repudiate a number of lease agreements for premises where Xtra-vision operates stores, Mr Fanning added.

The court agreed to make Ulster Bank, owed about €1 million, the Revenue Commissioners, owed €3.3 million and Blackpool Developments, which leases a premises in Cork to Xtra-vision, notice parties to the proceedings.

Mr Fanning said it had received letters of support for the examinership process from Ulster Bank and a trade union representing many of Xtra-vision’s employees.

The company was incorporated in 1980 as a video rental outlet and diversified its services in recent years to sell and rent DVDs, Blu-ray movies, video games, hardware and confectionery.