Investment deal to save Rathwood expected this week, court told
Court previously heard that survival ‘entirely contingent’ on external investment
A deal with an investor to save the troubled Co Carlow home and garden centre Rathwood is expected to be agreed this week, the High Court has been told.
Rathwood, a business controlled by the Tullow, Co Carlow-based Keogh family, entered examinership in late April.
Provisional figures provided to the court then suggested the company had liabilities totalling €18 million, including €10 million owed to trade creditors, €1.4 million to the Revenue Commissioners and €2.5 million in customer deposits and vouchers.
The court previously heard that Rathwood’s survival was “entirely contingent” on external investment.
In a report opened to the court on Wednesday, examiner Padraic Bermingham said he remained of the opinion that the company had a reasonable prospect of survival.
Bermingham said an investment proposal from a potential investor had been advanced, with draft agreements issued and the completion of binding terms anticipated on Thursday.
He said the potential investor is independent of the company’s shareholders and management, but is “familiar with the company’s affairs”.
The examiner said the company’s survival was singularly based on securing the proposed external investor.
Judge Rory Mulcahy acceded to an application by barrister Stephen Brady, for Bermingham, to extend the court’s protection of the business to a date in July.
The judge said there was “basis for concern” arising from the manner in which the examinership was progressing, noting the company had accepted orders “perhaps contrary” to trading controls put in place during the examinership.
In his report, Bermingham said company management reported “a small number” of instances where staff accepted customer orders outside the controls, amounting to “less than €20,000” worth of orders.
Keith Farry, barrister for the company directors, said he was instructed that previous procedures, which allowed for such trading, had ended.
The judge said he wanted further information about the position of customers and those in a position to obtain chargebacks.
The judge also noted a failure by the company to discharge debts owed to Revenue arising during the examinership period.
In his report, Bermingham said, “certain Revenue liabilities arising during the protection period remain outstanding”.
The court heard Revenue was informed by the company that the debts due would be paid this week.
Notwithstanding the issues of concern raised, the judge said the company seemed to have a reasonable prospect of survival and agreed to extend the protection period.
