The High Court has approved a survival scheme for the troubled Mount Wolseley Hotel and Golf Resort in Co Carlow based on a €7.5 million investment proposal from Brehon Capital. The hotel employs 175 people.
Hotel operators Donal and Breda Morrissey, who the court heard were unhappy after examiner Ian Lawlor rejected their refinancing proposals in favour of Brehon, had erected a nine-foot fence between the Tullow venue and Mount Wolseley House, which the couple own and live in, and its gardens.
The Morrisseys claimed the Brehon proposal would have to be increased by €2.37 million to provide alternative fire access arrangements and relocate underground services running through their land.
The ability to run the business as a going concern would also be affected as it would no longer be possible for wedding parties to use the gardens, which are part of Mount Wolseley House, they claimed.
Wedding bookings
The examiner said alternative fire access arrangements would be provided and also estimated loss of the gardens might only lead to losing between seven and 10 wedding bookings annually.
Today, Mr Justice Peter Kelly approved the scheme proposed by the examiner for three companies operating the hotel.
A number of unusual features to this examinership included the fact not one creditor had come before the court to oppose the survival scheme proposed by the examiner, he said. The Revenue had also not opposed it.
The examinership application was brought last April by the operating companies after Bank of Ireland – the largest creditor owed around €28 million – sought to appoint a trading receiver over the hotel.
The bank later “did a 180 degree turn”, supported examinership and agreed to provide Brehon with the bulk of the €7.5 million investment, the judge said. In doing so, the bank was taking a substantial write-down on the debt to about €6 million.
Loan repayment
A suggestion it might be sought to repay the investment loan within a short time of the survival plan being approved was no longer an issue after an undertaking was given the loan funds were committed for at least 12 months, he said.
The judge said he had sympathy for the Morrisseys, who regarded the business as a family enterprise, and it was “cold comfort” to say the court was dealing on a regular basis with many whose family businesses have become insolvent.
The examiner asserted the business had a reasonable prospect of continuing as a going concern under the survival plan, providing certain conditions are met including in relation to the investment, he said.
The examiner had said other issues raised, including the availability of the gardens for wedding party photos, were not insuperable difficulties and the investor was prepared to pay the cost of creating alternative fire safety arrangements to the satisfaction of the fire officer.
In the circumstances, the judge said he would approve the modified survival scheme to ensure the business would continue as a going concern.
