Thursday 15 November 2018

Hospitality firms seek court rescue to save 900 jobs

DEARBHAIL McDONALD

ALMOST 900 jobs are in jeopardy after two major employers sought court protection amid the crippling decline in the hospitality industry.

They included employees at several high-profile hotels and bars, controlled by two of the country's biggest publicans.

Capital Bars and Hotels, the superpub and hotel group founded by brothers Liam and Des O'Dwyer, applied to have an an interim examiner appointed to their flagship Marino Limited yesterday.

A provisional liquidator was also appointed over the Trinity and Grafton Capital hotels as well as The Dragon, a mega disco bar in the city.

Last night, 175 of the firm's jobs were temporarily saved after an interim examiner was appointed to Marino and three companies that operate Dublin's Cafe en Seine, Howl at the Moon and The George superpubs.

Meanwhile, Linen Supply of Ireland Limited (LSI), which employs 556 employees at three operations in Dublin, Cork and Galway, secured the appointment of an interim examiner after informing the High Court that it is insolvent. LSI, formerly CWS-boco Ireland, is a major supplier of linen products to the hospitality and health sector and is the leading vendor in Ireland of washroom hygiene products.

It blamed its difficulties on a depressed hospitality sector, a dramatic decline in hotel occupancies, a significant margin squeeze by hoteliers and suppliers and a competitive operating environment.

The company is relying on the support of its German-based parent company Franz Haniel.

Barrister Brian Kennedy said that LSI's directors were confident that it could return to profit through examinership as long as it could retain key customers, successfully implement a cost-reduction plan and renegotiate or repudiate property leases.

Creditors

Judge MacMenamin appointed Kieran Wallace of KPMG as interim examiner to LSI, and directed that the Revenue along with the company's major creditors be notified.

Advertisements will be placed in two national newspapers and 'Iris Oifiguil' in advance of a full examinership hearing next month.

Last night, Cork TD Ciaran Lynch said any job losses at LSI would be a disaster for Cork following major job losses over the past 18 months at Pfizer, Kostal, Swissco and Dairygold.

Mr Lynch stressed that the Government, having propped up the Irish banking sector, now needed to launch a viable and effective national employment support initiative.

Next month the High Court will also hear a full examinership hearing of Marino Limited, the parent company which cascaded debt down to the O'Dwyer brothers' chain of companies, which operate some of the capital's high-profile bars and hotels, including Zanzibar.

Yesterday, the High Court heard that a "break-up" was needed of the good and bad parts of Marino/Capital Bars, which has also been badly affected by a dramatic downturn in the hotel sector.

Barrister Gary Murphy, for Marino Limited, said that owing to the interdependency of the parent company and its subsidiaries, they owed Allied Irish Bank €26m.

Last May, the bank commissioned a report which recommended a reduction in the group's rents. However, according to Marino -- which owes Anglo Irish Bank €120m -- the AIB demand forced it to seek court protection.

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