Examiner appointed to Golden Discs as chain has ‘reasonable prospect’ of survival

THE High Court has confirmed the appointment of an examiner to the Golden Discs music retail group, which has 20 stores around the country, including six franchised stores.

Yesterday at the High Court Ms Justice Mary Finlay Geoghegan said she was satisfied to appoint an examiner after an independent accountant’s reports stated that the company had a reasonable prospect of survival as a going concern.

The court heard that the chain, which has been in operation since 1968, can survive if certain things are put in place.

This included realising sales targets, reducing costs and a renegotiation with landlords along with a scheme of arrangement for creditors. Loss-making stores would have to be closed.

The company, which has liabilities of €9.5 million, was in a cash positive situation and could meet its obligations during the examinership process.

The court heard that Golden Discs is insolvent due to the downturn in sales, increased competition and significant rent increases across several stores, especially Dublin city centre stores, but talks in an effort to reduce rents had not proven successful.

The judge approved the appointment of Michael McAteer of Grant Thornton as examiner. The judge also told the parties involved that for any company in examinership “time is of the essence”, and that any extension of time by the court would “have to be fully justified”.

Earlier this month Sony Music Entertainment, of Baggot Street, Dublin, applied to the court for the appointment of an examiner to Golden Discs. It claimed that is owed some €1.38m by Golden Discs and is not prepared to continue providing supplies in the absence of court protection.

Yesterday Lyndon MacCann SC, for Sony, said his client believes, if certain measures are put into effect, including the closure of loss-making stores, that Golden Discs has a reasonable prospect of survival as a going concern.