| 6.5°C Dublin

Examiner appointed to Foleys bar





THE High Court has confirmed an examiner to companies operating the family-run Foley's bar and restaurant business, and the adjoining O'Reilly's bar, on Dublin's Merrion Row.

The business employs about 20 people.

Bank of Scotland (BOS), the companies major creditor owed some €5m, had opposed examinership. A receiver appointed by it, but later discharged by the court,  had reached an agreement for sale of the premises at an undisclosed price, the court had heard.

Among the factors taken by Ms Justice Mary Finlay Geoghegan into account in exercising her discretion to confirm an examiner was evidence indicating the business has a reasonable prospect of survival provided certain conditions are met.

She also took into account the bank's failure to tell the directors it had appointed a receiver to one of the companies on the day of that appointment last month.

In a judgment yesterday considering all the evidence, law and arguments, she confirmed examinership for the two companies involved, The Belohn Ltd, the operating company, and Merrow Ltd, the holding company.

She directed the examiner to prepare, within three weeks, a report outlining a survival scheme and addressing certain matters raised by the bank's receiver.

A successful survival scheme would have to address how to obtain significant funding from a new investor given BOS's refusal to provide further finance, she said.  The scheme would have to include a payment for the bank consistent with the value of its current security.

Five expressions of interest in investing had been received from persons in the trade outside the Foley family, she noted.

 She also directed the examiner's report to address the receiver's suggestion low wage payment figures for a certain period suggested staff may have been paid in cash off the books over that period. That was strongly denied by director Sean Foley who argued the low rates were due to members of his family working unpaid in the business and higher wage costs during the receivership.

 The examiner must also address the receiver's claim that some €140,000 was not accounted for in nine-month management accounts and a statement of affairs as at October 11th 2012. Mr Foley had denied any wrongdoing in that regard and attempted to explain the figure by reference to Revenue payments and accruals, the judge said.

She was not satisfied that was a full explanation but it was not an issue the court could resolve and she had addressed the reasonable prospect of survival issue on the basis of accepting Mr Foley's sworn statements as to the absence of any irregularities and accepting all cash taken into the Belohn business since January 2012 was properly accounted for with no impermissible payments made and no irregularities concerning staff payments.

If the examiner's report did not disclose a satisfactory state of affairs on those issues, she would consider what further order is required, the judge said.

Online Editors