BANK OF Ireland is opposing the continuation of court protection for a firm involved in the door-to-door selling of goods on credit.
Murray Nolan, with registered offices at Clonee, Co Meath, employs 55 people directly while 65 self-employed commission-based sales agents handle door-to-door sales of goods including clothing and homeware.
The company, whose directors are Michael Murray, Moynalvey Manor, Summerhill, Co Meath, and Tom Nolan, Tankards Garden, Newbridge, Co Kildare, issues a catalogue of products twice yearly featuring products sourced from a variety of suppliers but mostly from Littlewoods/Shop Direct.
The company has debts of some €5.6 million. If wound up, it claims it would have a deficit of some €4.4 million but would have a deficit of some €735,283 on a going concern basis. Among the causes of its difficulties were falling sales, a reduction in the collection rate of outstanding debtors and problems with its Christmas hamper business, it said.
An independent accountant believed the company could survive as a going concern provided certain conditions were met, the court heard. The company had disposed of the hamper and savings club aspects of its business last December and was engaged in cutting staff numbers and overheads.
Bank of Ireland, its largest creditor with debts of some €1.9 million, opposes examinership as it does not believe the firm has a reasonable prospect of survival.
While the company had identified a potential investor who might invest some €500,000, the bank said three times that sum was required and described as “optimistic and incomplete” the company’s cash flow projections for the examinership period.
The bank noted directors’ remuneration up to December 2009 was €333,334 when the company had a trading loss of €130,855 that year and was €374,516 for 2008 and €708,790 for the 15 months to the end of December 2007. The examiner’s costs and remuneration of €250,000 would also prejudice the bank, it said. Accountant Simon Coyle of Mazars was appointed interim examiner on the ex-parte application of the company late last month and the matter was before Mr Justice Peter Kelly yesterday to consider whether to confirm Mr Coyle as examiner.
In a report, Mr Coyle said he believed the firm could survive if Littlewoods agreed to continue to provide supplies to it. Declan Murphy, for the company, sought an adjournment to address several issues, including those raised by the bank and by a number of trade creditors and to ascertain whether Littlewoods would continue supplies to the company.
Littlewoods wanted payment now of some £35,000 (€41,000) due to it but had not given a commitment to continue supplying the company and wanted 48 hours to consider its position, counsel said.
Two trade creditors told the judge they opposed the petition. One of those, Ina Broderick, said she received a post-dated cheque to meet her debt which bounced. When she asked if that was illegal, the judge said it could not be addressed under the companies code but she may have other remedies.
Rossa Fanning, for Bank of Ireland, did not object to an adjournment and Mr Justice Kelly adjourned the case to Wednesday.
