Thursday 27 April 2017

Superquinn sale to proceed as examiner petition withdrawn

€200m-plus deal will go ahead after Musgrave's 'significant offer' to establish €10m fund to aid small suppliers

Tim Healy

THE €200m-plus sale of the Superquinn chain to the Musgrave group is set to proceed after a petition seeking to have the company put into examinership was withdrawn yesterday.

The High Court was told an application for examinership brought on behalf of directors of Superquinn was being withdrawn after Musgrave, which intends to acquire the chain, announced that a €10m fund was to be established to reimburse certain Superquinn creditors -- mainly small suppliers who have been adversely affected by the receivership.

Joint receivers were appointed last week to the chain, which employs 2,600 people, by a Bank of Ireland-led syndicate of lenders. The same day, it was announced an agreement was reached that Musgrave would buy Superquinn.

Then, last Thursday, an application was made to the High Court to have an examiner appointed to the company amid claims that receivership would be a disaster for its creditors and employees.

That application was due to be heard today following the expected completion yesterday of the hearing of preliminary issues related to the examinership.

However, when that case was about to resume yesterday, Brian O'Moore, for the receivers and the bank, told Ms Justice Mary Finlay Geoghegan matters had been resolved between the parties and the petition seeking the appointment of an examiner could be struck out.

Lyndon MacCann, for Superquinn and two of its directors, said in light of the "very significant offer" made by Musgrave to suppliers, his clients were happy to withdraw their application seeking to have the company put into examinership which would have provided court protection from its creditors for up to 100 days.

The petition would also have repudiated the deal to sell the chain to Musgrave.

Counsel said his clients were "now supporting the receivership process".

Rossa Fanning, for Musgrave, said his clients were "very relieved" with this course of action.

In a statement, Musgrave said its planned purchase of Superquinn was the "best available option" to secure the future of the business.

Creditors

Ms Justice Finlay Geoghegan welcomed the news and struck out the proceedings.

Joint receivers Kieran Wallace and Eamonn Richardson, of KPMG, were appointed to Superquinn after it was revealed some €275m was owed to the banks, mainly deriving from Superquinn's property dealings.

Unsecured creditors -- mainly suppliers -- were owed an estimated €55m.

Among the preliminary issues that the examinership hearing was asked to decide was whether the company made a valid resolution to petition the court for appointment of an examiner on July 18 because there was a dispute over this between directors, including Kieran Ryan, David Courtney and Simon Cantrell.

The court was also asked to decide whether that petition was brought within the three-day period stipulated under the Companies Act; and whether the application for court protection constituted "exceptional circumstances".

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