Suppliers face being left €50m out of pocket for their stock
HUNDREDS of suppliers to Superquinn are owed up to €50m by the retailer and many won't be able to recoup any of the money, the Irish Independent has learned.
However, the receivers estimate suppliers will only lose €25m at most.
Musgrave, which owns Supervalu and Centra, is buying the Superquinn stores, its distribution centre, a head office and preserving the 3,000 jobs.
But the payment of suppliers for stock is being left to the receivers, KPMG.
It is understood Superquinn has about €50m of payments to suppliers outstanding at any one time.
While some of these suppliers may yet be paid if the stock hasn't been put on the shelves, others will not be paid at all.
Yesterday, KPMG receiver Kieran Wallace was dealing with a range of suppliers about the issue. While some suppliers have trade insurance to cover them for loses, others do not, leaving them nursing significant losses.
Suppliers are known as unsecured creditors in a receivership and do not have the same rights as preferred creditors like the Revenue Commissioners or secured creditors like the banks.
In this case, Bank of Ireland, AIB and NIB will attempt to get their loans back through the sale of the business to Musgrave.
The receiver works for the banks and his main role is to return as much value as possible to secured creditors. The unsecured creditors only receive money in the unlikely event there is a surplus left after paying the secured creditors. Superquinn uses about 660 suppliers, from large multinationals to smaller, artisan companies. Yesterday, they reacted with fury to the losses likely to be imposed on them.
Sweet company Tubs Sweets said it had been left short by "a whopping €40,000''. CEO Kevin Ginty said he had been informed by the receivers that he would not receive the €40,000.
"This is soul destroying to a small, start-up business like mine. I feel very cheated by Superquinn," he said.
It is understood Musgrave is not taking on various property contracts that Superquinn owner Select Retail Holdings has signed over recent years. These contracts are believed to relate to sites in Naas, Co Kildare and Stillorgan, Co Dublin.
Superquinn was bought in 2005 by Select Retail Holdings for €450m, but the owners ran into serious problems.