Nine suitors eye troubled O'Brien's as examiner begins talks
Thursday July 23 2009
NINE people are interested in investing in O'Brien's sandwich bar chain, the High Court heard yesterday. The news came as the court confirmed the appointment of an examiner to the troubled company, which is chaired by former Fine Gael election candidate and entrepreneur Brody Sweeney.
The appointment of an examiner, which protects companies from their creditors, is good news for O'Brien's 20 employees and the 800 people who work indirectly for the company in 85 franchised outlets across the country.
O'Brien's now needs "surgery" to close a number of "non-performing" outlets and the repudiation of "onerous leases" on other stores, the court was told.
The company, which started with one cafe in Dublin's South Great Georges Street in 1988, has expanded rapidly over the past two decades through franchises and now has 220 outlets in 13 countries. It is Mr Brody's second franchise; he bought the Irish master franchise for Pronta Print at the age of 21.
The majority of O'Brien's franchisees support the examinership process while at least eight landlords have verbally agreed to cut rents, the court was told yesterday.
An independent accountant said the company could operate as a going concern if certain conditions were met. Creditors are presently owed €4.1m but this would jump to €6.3m if the company were wound up, the court heard.
O'Brien's is currently paying €483,000 a year in rents for 10 empty stores while there were another nine "non-performing" leases which were now in arrears. Much of the company's troubles are due to the downturn in the economy.
Brian Kennedy, for the examiner, said there was contact with major suppliers as well as with franchisees so the company could continue to operate as a going concern.
Negotiations
Bank of Ireland, which is owed €3.4m of the company's €4m debt, is supportive of the examinership process. The court was told negotiations with major trade creditors as well as franchisees were continuing and the company's cash flow position would enable it to meet liabilities during examinership.
Counsel for one major creditor, Lindat Ltd, which has secured a judgement for €102,000, opposed the examinership. Lindat's counsel, who also represented another landlord creditor, Airscape Ltd, said they were concerned about the threat to repudiate leases. The Revenue and a firm of lawyers owed fees were neutral on the application to appoint an examiner, the court heard.
Judge Brian McGovern confirmed Paul McCann of Grant Thornton as examiner and extended time for the examiner to report back to the court to September 4.
- TIM HEALY
