The High Court has approved a survival scheme for the Xtravision chain of stores.
The company, which operates more than 160 stores and employs more than 1,200 people across Ireland, was granted court protection from creditors last April after it said it was insolvent and unable to pay its debts as they fell due because of cash flow difficulties.
Mr Justice Brian McGovern today approved a survival scheme proposed by the examiner to the company, David Hughes, who said the scheme was in the best interests of creditors, employees and all concerned with the company.
The judge’s approval will allow the company exit examinership on August 4th next and it will continue to trade as a going concern.
The court gave its approval after being told the scheme had secured approval of most classes of creditors, including the Revenue Commissioners.
Under the scheme, Birchall Investments, which bought the chain from US firm Blockbuster in 2009, will invest another €8 million in the company. The company has also entered into agreements on leases with landlords, which will reduce overheads.
Various classes of the company’s creditors will receive between 90 per cent and 8 per cent of what they are owed.
Seventeen loss-making stores have been closed. While most of the workforce had been retained, there had been 90 redundancies, 45 of which were voluntary.
The court was previously told Xtra-vision’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 Christmas and New Year period.
High rents were also cited as being problematic. 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.
In a statement Xtra-vision thanked its past and current employees, customers and suppliers for their support during the examinership process.
