Galway bakery firm escapes closure
AN interim examiner has been appointed by the High Court to Brogan's Bakery Ltd, Glenamaddy, Co Galway, which employs 82 people.
An independent accountant believes it has a reasonable prospect of survival based on a number of conditions, including an expected investment of €1m from Sean Brogan, acting CEO of Aer Arann and brother of the bakery's main shareholder, the court heard.
Brogan's supplies confectionery such as muffins and cupcakes to supermarket giants in Ireland and the UK, including Dunnes Stores, Tesco and Asda, the court heard.
Michael Brogan, a 40pc shareholder, yesterday petitioned for court protection for the family food business, which first opened in 1967.
The application came just hours before Mr Brogan had scheduled meetings with other directors and shareholders who, he claimed, were failing to face up to the reality of the company's troubled financial position.
Mr Justice Peter Kelly was also told that Sean Brogan, acting CEO of Aer Arann and a brother of Michael Brogan, was prepared to invest about €1m into the business under a suitable scheme of arrangement.
Sean Brogan has a 5pc shareholding in the company and has been identified as the "white knight" for survival, Rossa Fanning, for Michael Brogan, said.
The company was historically profitable, but a burden was created on it after a 2005 investment of €8.2m in a new facility, Mr Fanning said.
Michael Brogan, who had guaranteed loans for the company, believed other directors were not facing up to its difficulties and would seek support for examinership from other directors and shareholders at meetings later today, counsel added.
Granting the application for court protection and an interim examiner, the judge noted Brogan's Bakery business was set up in 1967 by Liam and Patricia Brogan and the company was formed in 1973.
It produced bread and confectionery and built a state-of- the-art plant in 2005 for €8.2m, he said. While no longer makes bread, it supplies confectionery, such as muffins and cupcakes.
While it was unusual for a single director or shareholder to present a petition for protection, Mr Brogan was entitled to do so as he held a 40pc shareholding, the judge said. It was also clear there had been "disunity" between directors of the company over a long period.
The company was insolvent based on the evidence, and Mr Brogan said his fellow directors were not addressing this, the judge added. While the company showed a surplus of €368,000 based on book value, there was a €2.8m shortfall as a going concern and there was a case for court protection.
Mr Justice Kelly said his practice was to appoint interim examiners only in exceptional circumstances, but that this was one of those cases.
He would appoint Michael McAteer interim examiner. The news of court protection was likely to come as a "bombshell" to the other directors and the interim examiner could bring "a degree of calm".
He was also conscious Sean Brogan has indicated he is willing to invest €1m and the sooner talks got underway about that, the better, the judge said.
The matter is back before the court on November 14.