A scheme aimed at ensuring the survival of 28 Chartbusters home entertainment stores employing 172 people has been approved at the Commercial Court.
The scheme provides for new investment and a wholly new management structure with group founder Richard Murphy exiting it by the end of this year.
While noting the scheme effectively allows the group to “walk away” from pre-examinership debts amounting to some €15 million in the event of a winding up, Mr Justice Peter Kelly said it at least meant creditors would get more than if the company was put into liquidation.
The scheme provides creditors will receive at most 10 per cent of their dividend while many will receive between just 2.5 per cent and 5 per cent. Various creditors represented in court today expressed support for, or were neutral towards, the scheme with some seeking minor modifications which were approved by the judge.
The scheme also provides for new investment of €700,000 and for a new management structure at Chartbusters with its founder Richard Murphy exiting the group by December 31st and ceasing to have any shareholding.
The majority shareholding, 51 per cent, will be held by John McCabe, and the remaining 49 per cent will be held by Catherine Kenny and Anthea Jordan.
Given the approval of the scheme, the judge made an order lifting court protection from noon tomorrow.
Court protection was previously lifted for one of the companies in the group, a non-trading leasehold holding company, Stanway Holdings Ltd (SHL), and an application for voluntary winding up of that company is being pursued.
The judge appointed Mr Hughes examiner to the group on January 26th last. Chartbusters was incorporated in 1993 as a video rental business. As a result of competition and changes in technology, it diversified into internet services and tanning booths.
