Examiner appointed to Fleming firm
The court heard it will protect around 650 jobs in the Cork-based Fleming Group which has close to €1 billion in debts and has widespread interests in retail, residential, commercial and industrial construction as well as in the pharmaceutical and energy businesses.
Yesterday’s application for examinership, which can give up to 100 days for a company to trade out of its difficulties, was brought by one of the companies within the group, Tivway Ltd.
The court was told two people have cash available to invest in the company and bring it out of its difficulties.
Details of the investment was heard in private by the court because of its commercially sensitive nature.
The court heard that ACC was a secured creditor owed €21.5 million and Anglo Irish Bank Corporation is owed €268m as a contingent creditor.
Anglo was supporting the examinership, subject to whatever scheme of survival the examiner produces, as the “least unpalatable option”, counsel for Anglo, Cian Ferriter, said.
ACC was against it because it believed that much the same result will come from the company going into receivership.
Mr Justice Brian McGovern appointed George Maloney of accountants Baker, Tilly, Ryan and Glennon, as interim examiner after he said he was satisfied from an independent accountant’s report and evidence presented to the court that the firm could survive as a going concern.
The judge said he also had to have regard to the fact that its largest creditor, Anglo, was supportive of the examinership application.
The court heard earlier from Lyndon MacCann SC, for Tivway, that the company was acquired by the Fleming group in 2006 and is one of a number of subsidiaries in which there is a degree if inter-dependency between each other.
Security for the loans to both banks was provided through JJ Fleming Holdings and JJ Fleming Construction and if Tivway were to go into receivership, it would have a “knock-on” effect in which Anglo would call in its loans to these companies and lead to its collapse, counsel said.
The company lost €41m last year due to the deteriorating economy and in particular within the property sector.
Under the survival proposals two pieces of property in Sandyford, Dublin, one called the Aldi site and the other the Sentinel building, would realise income for the company.
Sentinel is partly built and three possible options for it were being proposed, Mr MacCann told the court.
The first is sell it off as is but this would only raise between €500,000 and €1m.
The second is to complete the “skin” of the structure but without essential services and while this would cost €4.5m, it would increase its value to €5.6m. The third option was to fit it out to landlord specification at an additional cost of €6.58m but bringing its value to around €8.9m and make it even more saleable or leaseable.
Opposing the Sentinel proposals, Denis McDonald SC, said there was an oversupply of office space in the Dublin market with at least three years’ supply available in Sandyford and environs.
It was bizarre to suggest a plan should be adopted whereby €4.5m should be spent to increase Sentinel’s value to €5m or €6m or spend even more to bring its value to €9m – which was less than half of what is owed to ACC, Mr McDonald said.
It was “foolhardy” to be going through the examinership process in order to sell the Sentinel building when a receiver could do exactly the same thing, Mr McDonald said.
There had been no evidence presented to the court that if Tivway went into receivership that it would lead to the collapse of the other group companies, Mr McDonald said. Tivway itself had no direct employees but contracted work out to others, the court heard.
Mr McDonald said that on the basis of the evidence there would never be a surplus available for any of the unsecured creditors of the company. There was a lack of reality and artificiality to the application, he said.
