A FINANCIAL scheme aimed at ensuring the survival of Cork City soccer club was approved by Mr Justice Peter Kelly at the Commercial Court yesterday.
The scheme was approved following a two-month period in which club owners Cork City Investment FC Ltd have been under the protection of the court with the appointment of Kieran McCarthy of Hughes Blake chartered accountants as examiner.
Examinership was sought because the club owed its creditors €1.3 million, including €360,000 to the Revenue Commissioners. A number of players and staff had to be let go and the fortnightly wages bill had been reduced from €91,000 to €71,000.
Yesterday, the Commercial Court heard investor Tom Coughlan has committed significant funding to the club while a survival scheme in which creditors will receive a percentage of the money owed to them has been drawn up by the examiner.
The only creditor to oppose the scheme was the Revenue whose objections were described by Mr Justice Kelly as not having any validity. Revenue objected because of the level of payment it would receive and because it was not satisfied the scheme had a reasonable prospect of of success.
The judge said the Revenue's view "flies in the teeth" of evidence put before the court by the examiner, who was an independent accountant and who viewed the scheme as being in the best interests of the company.
Revenue had not called its own qualified person to contradict the examiner's evidence.
The Revenue would receive 16.96 per cent of what it was owed under the scheme, the judge said. If the football team was successful in the final of the Setanta Cup on November 1st, that figure could rise to 24.6 per cent.
The judge said he had further evidence that the transfer of a number of players, and the fees from this, could ensure the full amount owed to creditors could be paid in the future. If a winding-up order was granted, Revenue would receive 33 per cent, but this did not take into account the costs of examinership and winding up, the judge said. Mr Justice Kelly said he also had to take into account the role the team played in the life of Cork. He had noted the "eloquent comments" of a teacher involved with the club and its importance to children and young adults in the city.
The judge approved the financial scheme as proposed by the examiner and fixed 5pm yesterday for it to come into force.
In a statement issued after the hearing, Mr Coughlan said he was delighted with the High Court decision and looked forward to working hard "to ensure a sustainable, successful future for the club both on and off the pitch". He said the club had had some tough times this season but the efforts of the team manager Alan Matthews and the players, together with the support of the fans, had been magnificent.