2,700 Superquinn jobs in new risk after High Court action
Published 22/07/2011 | 05:00
THE future of 2,700 jobs at Superquinn remains in doubt today after a group of directors at the supermarket told the High Court they are seeking to have an examiner appointed.
Lawyers for the directors told the High Court this morning that they are issuing proceedings to have the appointment of receivers KPMG set aside, and they will also be seeking an injunction to stop the receivers taking any action.
The application will be mentioned before the High Court on Monday when a date for a full hearing will be set.
The court was also told that one of the directors of Superquinn, Simon Cantrell, is claiming he did not give his consent to the presentation of a petition seeking court protection for the company.
"I did not, and do not, support this examinership petition. I firmly believe that the receivership process is in the best interests of the company and the proposed sale with Musgrave is the best outcome for the protection of the 2,800 employees within the business and for the future of suppliers," Mr Cantrell said.
The directors are understood to have a major American investor willing to stand behind the troubled supermarket chain and believe the best hope of securing employees' jobs lies with them.
They argue that the business, while exposed in its property loans, is trading profitably.
The supermarket chain was put into receivership earlier this week by a syndicate of banks -- Bank of Ireland, AIB and National Irish Bank -- with debts of €450m, but was quickly bought by the rival Musgrave Group.
The directors, David Courtney, Kieran Ryan and Simon Cantrell, claimed the inevitable outcome of receivership and the proposed sale to Musgrave would be substantial involuntary redundancies and the burning of trade creditors for €55m.
The banks' move was aimed at enhancing its position as secured creditors, leaving nothing for the unsecured creditors, Michael Cush SC for the directors said.
Bank of Ireland said it would strongly oppose the examinership petition. It also raised the issue of whether the petition was brought within the statutory three-day time limit after the appointment of receivers.
Ms Justice Mary Finlay Geoghegan directed a preliminary hearing to be held next Tuesday on whether the company is entitled to present the petition.
She made clear that court protection had not yet been extended to the company.
In a statement issued last night, the banks said they would seek to continue the receivership so that the legally binding contract with Musgrave could be completed.
They argued that this was the "only rational solution" to ensure the survival of the supermarket and its jobs.
The latest twist came as Superquinn chief executive Andrew Street resigned yesterday in a show of support for suppliers who are likely to lose out on €25m owed to them by the supermarket.
Mr Street, who joined Superquinn from Dunnes Stores last year, slammed the receivership process, saying the banks had chosen this route in order to secure the maximum amount of the estimated €200m sale proceeds for themselves.
In an email circulated to staff yesterday, he said this was being done at "considerable cost" to suppliers and had been opposed by the board of Superquinn.
Mr Street said he hoped the banks, which are owed some €250m, would have "the good grace and sense" to use some of the sale proceeds to pay suppliers in full. But this was rejected by executives at the highest level in Bank of Ireland, the lead bank in the syndicate.
Mr Street warned that failing to pay suppliers was already "causing havoc" for stock resupply and this would have "inevitable sales consequences".
He also referred to a dispute with one of the receivers, Kieran Wallace of KPMG, and said he was no longer able to work with him.