Survival scheme confirmed to Mount Wolseley Hotel and Golf Resort
Published 22/07/2014 | 17:05
THE High Court has confirmed survival scheme for the troubled Mount Wolseley Hotel and Golf Resort in Co Carlow following a €7.5m investment proposal from Brehon Capital.
It followed a dispute over the investment proposal which led to hotel operators Donal and Breda Morrissey erecting a nine-foot fence between the Tullow venue and Mount Wolseley House and gardens, which the couple own and live in.
The Morrisseys claimed there were uncertainties over Brehon's investment proposal because it would have to come up with another €2.37 million to provide alternative fire access arrangements for the hotel and to relocate underground services which run through their (Morrisseys') land.
They also said the ability to run the business as a going concern would be affected as it would no longer be possible for wedding parties to use the gardens, which are part of Mount Wolesley House, as a back drop for photos.
The examiner and Brehon said the cost of alternative fire access arrangements would be not be near the sum suggested by the Morrisseys. The affect of the loss of the gardens on hotel wedding business would not be serious as only between seven and ten bookings annually are likely to be lost as a result, they also said.
The court heard the Morrisseys were unhappy after the examiner rejected their re-financing proposals in favour of Brehon Capital.
Yesterday, Mr Justice Peter Kelly approved a survival scheme put forward by insolvency practitioner Ian Lawlor for the hotel which has been run by the Morrissey family and employs 175.
The judge said there were a number of unusual features to this examinership including that not one creditor had come before the court to oppose the survival scheme proposed by the examiner. The Revenue had also not opposed it.
The examinership application had been brought last April by the operating companies after Bank of Ireland (BoI) - the largest creditor owed around €28m - had sought to appoint a trading receiver over the hotel.
Subsequently, BoI "did a 180 degree turn" and not only no longer opposed the examinership but supported it and agreed to provide Brehon with the bulk of the €7.5m investment, the judge said. In the course of doing so, BoI was taking a substantial write-down on the debt to around €6m, he said.
Another unusual feature was that the hotel operating companies had sought to persuade the court there were frailties about the investment including that there was no guarantee that there would not be a requirement to repay the new investment loan within a short time of the survival plan being approved, he said.
However, this was no longer an issue after an undertaking was given to the court that the loan funds were committed for at least 12 months, he said.
While the judge had sympathy for the Morrisseys, who regarded the business as a family enterprise, it was cold comfort for him to say the court was dealing on a regular basis with many whose family businesses have become insolvent.
The examiner asserted the business had a reasonable prospect of continuing as a going concern under the survival plan, providing certain conditions are met including in relation to the investment, he said.
While other issues had been raised, including the availability of the gardens for wedding party photos, the examiner said these were not insuperable difficulties and the hotel can continue to trade despite the loss of such a facility.
The only other issue was that of the fire safety certificate and the examiner had assured the court this can be dealt with and that the investor was prepared to pay the cost of creating alternative arrangements to the satisfaction of the fire officer.
The investor, the judge said, was "going in with his eyes open and knows some money will be required" for this, he said.
He was prepared to approve a modified survival scheme proposed by the examiner to ensure the business would continue as a going concern for everybody concerned and most importantly for the 175 employees.