Interim examiner appointed to Joe.ie owner Maximum Media
An interim examiner has been appointed by the High Court to a digital media company employing 52 people here.
Mr Justice Michael Quinn said today he was satisfied to appoint Shane McCarthy, a partner in accountancy firm KPMG, as interim examiner to Maximum Media Network Ltd (MMN), which was incorporated as Joe Dotie Ltd but became MMN in February 2013.
The appointment was sought by Kelly Smith BL, for BPC Lending Ireland DAC [BPC] of Molesworth Street, Dublin 2, as a creditor of MMN, with registered offices at Distillery Building, Fumbally Lane, Dublin 8
In court documents, BPC said, under a 2018 loan agreement, it has advanced some €6.02m to MMN with monthly interests repayments of some €68,000. The current loan balance is some €6.1m, it said.
MMN had entered the UK market in 2015 and commenced trading through a UK company also named Maximum Media Networks Ltd, which had since changed its name to Joe Media Ltd.
The €6.1m loan is guaranteed by Joe Media Ltd, it said. That company also has significant solvency/financial issues and BPC had decided to seek to appoint an administrator to it as soon as possible, it added.
BPC said MMN had failed to pay interest on its loan in March and April last and in early April sought a capital and interest moratorium which BPC declined.
On May 12, the company's principal, Niall McGarry, sought a "standstill" for a couple of months, saying it could pay salaries or BPC but not both.
BLC refused a standstill and contended that request and failures to meet interest repayments constituted events of default.
BPC said there were indications of "poor financial management" in MMN including the discovery of "numerous" payment plans with the sheriff in relation to overdue tax payments which had not previously been disclosed.
It was also concerned about the handling of a November 2019 video detailing an instance where a company employee used a "click farm" to artificially inflate engagement numbers.
As a result of the click farm issue and a revenue shortfall in the fourth quarter of 2019, and following discussions with BPC, MMN took various actions in late 2019 including mandating Deloitte to investigate sales option for its business and the UK business, which had been isolated from events in Ireland.
The Irish company's management team was also restructured.
BPC said, arising from various factors, it had now decided to seek an interim examiner to MMN so it would have court protection pending preparation of a scheme of arrangement.
A combination of factors, including the click farm incident and "vastly reduced" revenue projections for 2020, had lead to that conclusion, it said.
BPC, and an independent expert, considered MMN has a reasonable prospect of survival for reasons including its very significant following among its target demographics with traffic on the company's sites running at about 42 million per month.
The company had been profitable for a number of years until it began making losses in the years ending 2018 and 2019.
While it remains loss-making, the ongoing cost restructuring programme has significantly reduced running costs such as salaries, it said.
BPC, a secured creditor, is supportive of the company and willing to fund working capital through the examinership period, it added.
The matter returns before the court in late May.
