A COMPANY operating two pubs employing 94 people in Waterford and Co Kildare has secured continuing High Court protection after complaining a bank had moved “out of the blue” to appoint a receiver just before the bank holiday weekend.
Sheffs Ltd, which operates Harvey’s Late Bar, Manor Street, Waterford, and the Mantra Garden Bar and Club, Main Street, Maynooth, Co Kildare, had sought protection after Bank of Scotland appointed a receiver over the bars on Friday afternoon last.
It seemed Friday afternoons were “very popular” with banks for the appointment of receivers, Mr Justice Peter Kelly observed yesterday.
The company, with registered offices at Manor Street, Waterford, claimed the receiver’s appointment came as a surprise as it was engaged in what it believed were “good faith” negotiations with the bank, its largest creditor.
It secured interim protection from Mr Justice Iarfhlaith O’Neill at a High Court sitting on Saturday after presenting a petition for examinership. He returned the matter to yesterday when it came before Mr Justice Kelly.
After hearing from lawyers for the company, the bank and the receiver, the judge said he would continue protection pending the hearing on November 15h of the petition for examinership.
The judge noted the company was insolvent with a deficit on a going-concern basis of €1.7 million, rising to €6.8 million if the company was wound up.
He noted Bank of Scotland had said it would oppose examinership and had also raised issues about protection being granted on Saturday in circumstances where a report of an independent accountant expressing a view the company had a reasonable prospect of survival was not before the court.
Mr Justice Kelly said he could not be a court of appeal from another High Court judge’s order.
The company had said it had insufficient time to procure an accountant’s report – required when applications for examinership are being made – because of the exceptional circumstances of a receiver being appointed on a bank holiday Friday without notice.
It had since obtained an independent accountant’s report, which took the view the company could survive if a number of conditions were met, including successful negotiations with Bank of Scotland or the refinancing of its debts.
Other conditions included a partial write-down of creditors and a comprehensive resolution of all litigation claims.
The judge noted the bank had also raised issues about the status of the receiver. However, as the receiver had stood down on being informed of the granting of court protection, that matter need not be addressed at this stage, he said.
