High Court protection granted to Bill Cullen and Jackie Lavin-owned Muckross Park Hotel
A JUDGE has granted High Court protection to a hotel owned by troubled businessman Bill Cullen and his partner Jackie Lavin.
The five-star Muckross Park Hotel in Killarney, Kerry, which employs 105 people, plus another 50 during the summer months, had been put into receivership earlier this week but Mr Cullen and Ms Lavin went to court today seeking to have an examiner appointed instead to give them a chance to save the business.
Ms Lavin told the court today she was anxious to protect the jobs in the hotel and to reassure the many couples who had booked weddings.
She and Mr Cullen bought the hotel 20 years ago and extensively refurbished it in 2006.
Mr Justice Peter Charleton ordered that a receiver appointed by ACC Bank to the hotel earlier this week be replaced from 4.30pm by an interim examiner, Kieran McCarthy of Hughes Blake Chartered Accountants.
Declan Taite, of RSM Farrell Grant Sparks, was appointed receiver and manager to Muckross Park Hotel Limited, Boisdale Holdings Ltd, Silvermire Properties Ltd and certain assets of Bill Cullen, on Wednesday.
Mr Justice Charleton said he was satisfied from evidence, including the report of an independent accountant, this "fine hotel" in which heavy investment was made in 2006 but which experienced problems after the Irish economy crashed in 2008, has a reasonable prospect of survival provided certain conditions were met.
Those conditions included securing investment and approval of a survival scheme from creditors and the court. Mr Cullen and Ms Lavin had been told by an investor he was prepared to put some €4m into the hotel.
The hotel had hired a very experienced new manager, implemented cost-saving measures and succeeded into diversifying into a number of areas including weddings. It had 56 weddings last year and another 65 booked this year and 25 so far for 2014.
His decision to appoint an interim examiner was also motivated by the fact the hotel has many weddings booked this year and next, including two this weekend. It made some €20,000 per wedding and had also reached an arrangement with tour operators related to meals for their clients, the court heard.
The judge was also told the appointment of the interim examiner would lead to the hotel being able to resume taking credit card payments as the receiver's appointment had prompted Allied Irish Bank to freeze its accounts and refuse credit card payments, causing obvious difficulties in its daily operations.
The couple, represented by Ross Gorman, went to the court today after ACC, owed €4.6m by companies running the hotel and another €4.6m by Mr Cullen, appointed Mr Taite as receiver. ACC's debts are secured on the hotel companies assets, including the hotel and 24 apartments.
Mr Cullen is also owed some €9.9m from the hotel but accepts that is "gone", Ms Lavin said in an affidavit.
Ms Lavin said he had put in an enormous time and effort into the hotel business over the last number of years and believed the improvement in its turnover was largely due to the efforts of herself and the staff.
She also believed the hotel benefits from its association with herself and Mr Cullen. While both of them are directors, and she works in the hotel every week, neither draw a salary from the business, she added.
The appointment of the receiver had caused concerns among staff and about 40 couples had been in contact with the hotel expressing concern whether their weddings would go ahead, she said. Many suppliers had also been in contact about payments.
She said she had been informed the receiver was not providing much comfort to those parties and was extremely concerned about the impact of his appointment on the hotel's business, even in the short term.
Mr Gorman said, following the economic crash, the need for a new business model for the hotel had been recognised and implemented.
That had led to a situation where the hotel had succeeded in turning around, largely through the efforts of Ms Lavin, but its problem was inability to service capital and interest payments to ACC which had rejected an investor's €3.5m offer for its loans.