Court approves scheme for companies employing 330 people in Galway to continue as going concerns
A scheme of survival allowing seven companies controlled by Galway businessman Gerry Barrett and employing over 330 people to survive as going concerns has been approved by the High Court.
Ms Justice Marie Baker said she was satisfied to approve the scheme which will see the seven companies connected to businesses including the Five Star G Hotel, 4-star Meyrick Hotel, apartments a retail park and the Eye Cinema which are all located in Galway City formally exit the examinership on December 21 next.
The court approved the schemes which were put in place by the examiner insolvency practitioner Neil Hughes of Baker Tily Hughes Blake, following lengthy talks between the companies and the firms main creditors Deutsche Bank.
Paul Gallagher SC for the bank, which had supported the examiner’s proposals. said an agreement had been reached with the Barretts who were withdrawing their objections to the scheme.
The terms of that agreement the court heard are confidential.
The settlement was welcomed by the Judge.
The companies sought the protection of the courts last September..
However, the firms opposed the schemes of arrangement proposed by the examiner on grounds including that the schemes were unfair to one class of impaired creditors.
The companies, whose directors are Mr Barrett and Catherine Barrett of Drimbawn House, Chestnut Lane, Lower Dangan, Galway sought the protection of the court after Deutsche Bankappointed a receiver over the firms in late August.
Deutsche Bank (DB), represented in court by Paul Gallagher SC and Neil Steen SC had supported the scheme.
The bank which is owed more than €690m by the group after acquiring its loans from Nama in 2015, had initially opposed the appointment of an examiner.
It had done so on grounds including it was an attempt by the companies to renege on a 2016 debt settlement agreement which would have resulted in the sale of the group’s assets to reduce its debt to the bank.
However following rulings by both the High Court and Court of Appeal the examiner was appointed to all seven companies.
The companies, which are all part of Mr Barrett’s Edward Capital Group are KHKitty Hall Holdings Ltd, Ml Meyrick Ltd and Mono Trading Ltd, Edward Leisure Assets Unlimited Company, Niche Hotels Unlimited Company, Style City Limited and Radical Properties Unlimited Company.
Previously the court heard that under the scheme an investor called Waltzfire Ltd will put €89m, plus an additional €9m as working capital, into the companies
Afterwards Mr Hughes said that the approval by the court of the scheme "showed the benefits of the examinership process."
He said that it was "an unusual case" where under the scheme all 33O full and part time workers employed by all the firms "had been saved and "all the creditors had been paid."
Mr Hughes also thanked the Barrett family, the companies and the creditors for their assistance in formulating the schemes.
In a joint statement Mr Gerry Barrett, the investor in the companies and the bank welcomed the courts decision to approve the seven schemes.
The successful examinership, the statement added, had secured full payment for all trade creditors and had provided security of employment for all the various firm’s employees.
The companies will continue to trade as normal, the joint statement concluded.
