High Court approves a survival scheme for Mothercare Ireland - saving 250 jobs
THE High Court has approved a survival scheme for Mothercare Ireland.
More than 250 jobs have been saved and the company will continue to trade at 15 stores nationwide following a €750,000 investment from the company's main shareholder David Ward.
Mr Jusitce Brian McGovern refused an application by the Revenue Commisioners for an adjournment of the matter to allow them examine the investment scheme.
There were concerns the majority of investment would be eaten up by the examinership and examiner costs with less money available to creditors, Arthur Cunningham BL, for Revenue, said.. Revenue is both a preferential and unsecured creditor.
Gavin Simons, solicitor for the examiner, said there was no reason why the court should not approve the scheme.
It was not the case that if examiner fees were reduced, it would mean more money for creditors. It would just mean the investment would be reduced, he said.
Rossa Fanning BL, for the company, also said there was no reason for the scheme not being approved at this stage and it was not normally the case that a survival scheme of arrangement was provided to creditors.
Mothercare UK, which is the main supplier to the Irish stores, also supported the scheme, the court heard.
The company, and two related companies,Mothercare World and Effleby Trading Ltd went into examinership last July.
Mr Justice Brian McGovern said Revenue had not put forward any reasonable or significant grounds for the court not to approve the scheme at this point and he approved it as and from noon today (Wed).
Under the investment scheme, the company will continue to trade at 15 stores nationwide but three - Blackrock and Jervis Street in Dublin and Cruises Street in Limerick - may close early next year.
Mothercare says consultations are taking place with staff at these shops who will be deployed elsewhere if possible.
As part of the survival scheme, the company secured a rent reduction of 30 per cent across its store portfolio but other stores that were potentially under threat will remain open following agreements on rent reductions.
Mothercare Ireland is a franchise of Mothercare UK and has traded here for 23 years. It is Ireland's largest maternity, baby, nursery and children's clothes retailer.