The operators of the Light House Cinema in Dublin’s Smithfield have been given time to resolve a dispute with their landlord over the doubling of their rent.
Co-founder Neil Connolly said he hoped that "common sense will prevail" in the dispute over the rent increase from €100,000 to €200,000, which took effect last year.
A winding up petition has been brought by landlord John Flynn against the Light House Cinema Exhibition and Distribution Company Ltd.
In the High Court today, Ms Justice Mary Laffoy granted an adjournment until Friday, April 15th after a request from the cinema's counsel Alison Keirse BL.
Ms Keirse said the adjournment will allow the board of directors of the cinema to meet and receive advice. She said they would adopt a "reasonable approach" to the best interest of the company and its creditors and would "act decisively in relation to the matter".
Ms Keirse also said the company did not owe a substantial amount to creditors and had a tax clearance certificate.
The executive directors of the Light House are Mr Connolly and fellow co-founder Maretta Dillon. The non-executive directors are film producer David Collins and David Kavanagh, a former chief executive of the Irish Film Institute (IFI).
Richard Burke, counsel for Mr Flynn, objected to the adjournment.
The cinema opened in May 2008 and is a critical part of the regeneration of the Smithfield area which has been affected by the downturn. It has emerged that the State has a €1.75 million charge on the property having invested that amount during the construction of the cinema.
That comprised of a €1 million capital grant and €750,000 from the Cultural Cinema Consortium (made up of members of the Arts Council and the Irish Film Board) which was set up to promote art house cinema in Ireland.
In the Dáil last week, Minster for Tourism, Arts and Culture Jimmy Deenihan said the State had two options if the Light House cinema closed.
It could demand back the €1.75 million given in State funding. Alternatively the consortium could run an art house cinema on the site as a going concern.
