The High Court has appointed an interim examiner to three connected firms involved in the food distribution business whose turnovers have plunged due to the Covid-19 outbreak.
Wert Capital Ltd and related firms Dublin Foods Sales Ltd and Scallans Food Service Ltd which have over 70 employees were all granted the protection of the court from their creditors.
The firms are involved in the delivery of mainly food and some non food products to restaurants, pubs, offices hotels nursing homes and catering companies in the Leinster area and South East of the country.
At the High Court on Friday afternoon Ms Justice Niamh Hyland said she was satisfied to appoint insolvency practioner Neil Hughes of Baker Tilly as interim examiner to the companies.
The judge said that while the firms are currently insolvent and unable to pay their debts, an independent expert's report had stated that the companies have a reasonable prospect of survival if certain steps are taken.
These steps included securing fresh investment in the firm, and the examiner putting together a scheme of arrangement with the three firms' creditors, which if approved by the court would allow them continue to trade as going concerns.
The firms, represented in court by Ross Gorman Bl, petitioned the court for Mr Hughes's appointment.
Counsel said that the had been profitable in recent years but had run into cash flow difficulties.
The outbreak of covid-19 and the resultant closure of businesses, schools, pubs and restaurants had seen the firms turnover reduced by 70%.
The companies also has had to lay off a significant part of their workforce, counsel said.
The firms' creditors include Bank of Ireland, Revenue, a financial fund called BDO Davy EIIS which it borrowed money to fund acquisitions made in 2017 and a significant number of trade creditors.
Other causes of the companies difficulties included a shortfall on an invoicing facility they have entered into with a company called Grenke Invoice Finance, and the firms' were underfunded following the acquisition of new businesses which resulted in a rapid rise in turnover.
Counsel said that the appointment of an interim examiner was required in order to deal with the firm's employees who had in recent days been paid their wages directly by a director of the companies Mr Richard Meehan.
The examiner as well as putting a scheme of arrangement together could also help resolve any issues with Grenke over the invoicing, counsel added.
Counsel said there has also been expressions of interest in what are profitable businesses by investors, and the firm was looking to diversify in these troubled times and establishing a home delivery service.
After appointing Mr Hughes, following an ex-parte hearing, the judge made the matter returnable to a date in early April.
This article was updated on March 28.