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Sunday 11 December 2016

Small suppliers beg Superquinn to cash cheques

Published 24/07/2011 | 05:00

Cheques for many Super-quinn suppliers -- who are owed up to €50m -- that were signed on June 30 did not arrive until Friday, July 15, and by the time small businesses tried to cash them after the weekend, they bounced.

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Last week, there was a steady stream of suppliers arriving at the Superquinn Head Office in Lucan, Co Dublin, begging for their cheques to be cashed, but they were turned down flat. Many were in tears as they faced the prospect of potentially ruinous cash-flow problems in the wake of the appointment of receivers to the chain.

Yesterday, there was an emotional call on behalf of small suppliers and artisan producers by Clive Gee of G's Gourmet Jams in Abbeyleix.

The company, which grows its own fruit and employs seven full-time and three-part time workers, is facing severe difficulties and is owed €30,000 by Superquinn.

"Where is our money gone? We know that the jams we supplied were bought and the money went into the till. Now it has disappeared," he told Damien O'Reilly on Countrywide.

The business was set up as an alternative farm enterprise by Clive's mother, Helen Gee, in 1999 and has won seven gold medals in the Great Taste Awards.

"We have been put under a tremendous amount of pressure in relation to cash-flow. We have all taken wage reductions and we will not give up. We do want the answer to that simple question. Where did our money go?," Mr Gee said.

Senator John Whelan, speaking in the Seanad, said he had a list of over 50 small businesses and suppliers that were issued with cheques dated June 30, but which only arrived 15 days later.

"When the businesses tried to cash them on Monday, they learned the accounts were frozen. In any language, I would say they were hoodwinked and stitched up. The credit period of 90 days was used so they would not be paid. This was sharp practice. I call on the minister to issue an instruction and intervene so the receiver will honour those cheques," Mr Whelan said in the Seanad.

However, Enterprise Minister Richard Bruton told the Sunday Independent that he would not intervene on behalf of suppliers.

A spokesman for Mr Bruton said: "The minister understands that Superquinn employs approximately 2,800 people, and over 600 businesses act as suppliers to the company. His immediate concern is for these workers and suppliers, and he has met representatives of both groups."

The spokesman added that the matter is currently the subject of High Court proceedings and is under consideration by the Competition Authority.

"It would not be appropriate for the minister to comment in any more detail on the matter. Typically, the appointment of a receiver arises from a contract between a lender and a borrower and is not specifically governed by company law.

"The minister's view is that it would not be appropriate for the State to interfere by way of legislation in such agreements. He will be carefully monitoring developments to determine whether greater protections are possible."

Two separate court actions have now begun over the receivership and sale of Superquinn.

The first legal application aims to place the business in examinership, giving it full protection from its creditors, including the consortium of banks who called in the receiver.

The other legal challenge is based on testing the validity of the receivers's appointment.

The action is being taken by directors of Superquinn, who have claimed the joint receivers of the company have not been properly appointed.

Lawyers for the directors told the High Court last Friday that they were issuing proceedings to have the appointment set aside, and they would also be seeking an injunction to stop the receivers from taking any action.

The application will be mentioned before the High Court tomorrow, when a date for a full hearing will be set.

The supermarket chain was sent into receivership by a syndicate of banks spearheaded by Bank of Ireland last Monday.

But last Tuesday morning, the powerful Musgrave chain announced that it was buying Superquinn.

Musgrave said it would do its best to assist companies experiencing losses as a result of the receivership.

Musgrave plans to establish a scheme giving suppliers access to the retail group's supply network to sell their goods. The scheme will prioritise small, distressed Irish companies.

But yesterday, The Irish Times reported that a Baltic-based retail and pharmacy conglomerate called the VP Group has also emerged as a potential bidder for the supermarket chain.

Sunday Independent

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