The owner of the Kilcoran Lodge Hotel in Tipperary was granted leave to apply for the appointment of an examiner on Tuesday in the Circuit Civil Court in an attempt to save the business and 37 jobs.
Barrister Ross Gorman told Judge Cormac Quinn that while the company, Munster Strategic Investments, was unable to pay its debts, an independent expert was of the view it could be rescued through the appointment of an examiner.
Mr Gorman said the company had been incorporated in November 2015 by directors Paul Bowes and his daughter Triona Bowes, both of Mocklers Hill, Cashel, but had hit financial difficulties mainly due to the coronavirus pandemic.
In 2018, the firm had acquired Kilcoran Lodge Hotel in Cahir, Co Tipperary, for just under €1.68 million in a deal that was funded by several Chinese investors under the immigrant investor programme. This scheme allows nationals from outside the European Union obtain residency in return for a minimum investment of €1 million in an Irish business.
Passport
Investments must remain in the company for a minimum of three years when, subject to certain conditions, it is possible for investors to obtain an Irish passport.
Mr Gorman said that, in 2018, the company management visited China and were able to source three investors keen to invest in the hotel sector. Enough finance had been raised to purchase the 25-bedroom hotel and cover refurbishment to bring it from three-star to four-star level.
He said the company commenced trading in 2018 and, following a slow start due to ongoing enhancement works trade, had been unexpectedly affected by the pandemic last year, forcing its closure from March to July 2020.
“This had a significant impact on the company’s trade and turnover in 2020 was approximately €495,000,” said Mr Gorman. “Trade in 2021 has also been impacted by the pandemic and, to September last, turnover was about €414,000.”
He said the company had suffered significant losses since commencing trading in 2018 and one of the Chinese investors was now seeking repayment of a loan that the company was unable to meet.
The company would apply for the appointment of Joseph Walsh of JW Accountants, Grand Canal Street Upper, Dublin, who had agreed to act as examiner if appointed.
Expert
Mr Gorman said independent expert Aiden Murphybelieved the company – and jobs associated with it – could be saved under a scheme of arrangement developed by Mr Walsh if given court protection against its creditors.
The hotel stands on 20 acres of landscaped gardens, less than five minutes from the M8 and near tourist attractions including the Rock of Cashel, Galtee Mountains, Golden Vale, Mitchelstown Caves and Cahir Castle.
The judge said he would allow an application for the appointment of an examiner to be made on December 17th.