Court approves Atlantic Homecare survival plan17/09/2012 - 12:58:11
The High Court has approved a survival plan for the DIY chain Atlantic Homecare.
Mr Justice Sean Ryan today granted his approval to the scheme allowing the chain, which part of the Grafton Group, to exit examinership and continue to trade as a going concern.
The court was informed that under the scheme less jobs will be lost and less stores closed by Atlantic Homecare than had been originally feared and more than €5.7m in fresh investment has been secured.
The court also heard that all of the chain's creditors were in favour of the scheme and there were no objections to the proposals.
Last June, the Court appointed Mr Declan McDonald of PwC as interim examiner to Atlantic after he was told most of the chain's 13 stores were trading at a loss.
Examinership was sought by the directors of the company. While having an accumulated loss of €21m for the last five years, the company had continued to trade with the support of other companies within the Grafton Group, in particular Woodies DIY, the court heard. The company did not have cash flow issues.
Today Counsel for the Exmainer Mr Bernard Dunleavy Bl told the court that the examinership process had resulted in a better outcome than had been originally anticipated.
It had been proposed to shut five stores, however under the scheme before the court only two stores in the group, Limerick and Newbridge in Co Kildare, will close. It had employed 348 people in 13 stores nationwide.
There will be 44 redundancies, however that is 70 less than initially proposed. In addition counsel said that all classes of the chain's creditors had voted in favour of the plan.
The court also heard that Woodies DIY are prepared to invest a sum of €5.7m in Atlantic Homecare.
The chains difficulties, counsel said, were mainly due to the deterioration of the economy, high rents and because its staffing levels were more reflective of boom times in DIY sector rather than in a recession.
The examiner had also negotiated with landlords about rents, which represented the chain's largest liabilities.
The business had got the support of other companies in the Grafton group, but eventually had to seek the protection of the courts and sought the appointment of an examiner.
Last June the High Court confirmed Mr McDonald as examiner after being satisfied from information provided to him that the company had a reasonable prospect of survival.
An independent accountant's report said that the company had a reasonable prospect of survival if a scheme was put in place.
In approving the scheme Mr Justice Ryan said that the plan was "perfectly reasonable." He noted that that creditors seemed to get more out of the scheme compared to other examinerships.
Less jobs would be lost and fewer store closures would take place that original thought the Judge added.
In the circumstances the Judge said had "no hesitation" in giving the court's approval for the scheme. The Judge fixed midday next Friday September 21 as the date in which the chain will formally exit examinership.
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