Superquinn directors David Courtney and Kieran Ryan, through their counsel Bernard Dunleavy, signalled their intention to seek injunctions restraining Kieran Wallace and Eamonn Richardson of KPMG acting as receivers. The receivers were appointed last Monday evening by Bank of Ireland, AIB and National Irish Bank to the troubled retail chain.
Brian Kennedy, for the receivers, said they wanted the court to decide if a valid resolution had been passed by the Superquinn company board last Monday to present the petition seeking the appointment of an examiner to the trading side of the company.
Counsel said there was an affidavit from a director of Superquinn, Simon Cantrell, which disputed claims by the other directors the company had passed a resolution at a meeting last Monday to petition for examinership.
Ms Justice Mary Finlay Geoghegan has adjourned to Monday several matters arising from the initiation of the examinership proceedings on Thursday evening, including whether the separate injunction proceedings aimed at restraining the receivers acting will be heard in conjunction with any examinership petition.
An independent accountants report, required before the court may appoint an examiner, is being finalised and will be provided to the sides by Monday, the court heard. The petitioners say financial information up to June last indicated the company has a realistic prospect of survival.
The judge has fixed Tuesday for the hearing of preliminary issues as to whether the petition — put before the court on Thursday evening about 5.50pm — was brought within the three day period stipulated under the Companies Act. Another possible issue to be addressed is the alleged invalidity of the resolution to initiate the examinership proceedings.
She will also consider any application by the petitioners for court protection for Superquinn on an “exceptional circumstances” basis.
If the court concludes the petition can be heard, that hearing will proceed on Thursday when it will be vehemently opposed by the banks and Musgrave Group.
The petition states it is made on behalf of Superquinn and three directors — Mr Courtney, Mr Ryan and Simon Cantrell — but Mr Cantrell yesterday said, in an affidavit provided to the court by his counsel Aidan Redmond, he had not authorised the petition. Mr Cantrell said he was fully supportive of the receivership process and believed the proposed transaction with Musgrave was in the best interests of Superquinn’s staff, suppliers and customers.
Mr Cantrell has disputed claims in the petition that the board had passed a resolution at a meeting in the offices of Spain Courtney Doyle last Monday, following the appointment of the receivers, to bring a petition for examinership.
Rossa Fanning, counsel for Musgrave, told the court yesterday his client has “binding contracts”, in place to purchase Superquinn and Mr Kennedy said the matter must be dealt with as quickly as possible because every day was crucial.
John Douglas, of Mandate, said the workers and their families were very concerned at what was happening and, if the legal process goes on, their jobs would be lost. His union was afraid the workers “will get forgotten in all of this” and it would like some standing in the case, he said.
The judge said the thrust of examinership is to see whether a company has a realistic prospect of survival and jobs were always taken into account in determining examinership applications.
While she did not recall employees ever being represented in an examinership application, she would not rule on that issue now and, if Mandate wanted to seek representation, it could indicate that to the court on Monday, she said.
Mr Dunleavy said he wanted clarification whether the receivers had directed officers and employees of Superquinn not to engage with the independent accountant. Mr Kennedy said he understood the situation was it had been sought to have any requests from the accountant “routed” through the receivers.
The judge said it would be “on the receivers’ heads” if this delayed the court proceedings. It would clearly delay matters if the accountant could not deal first hand with those who have necessary information, she said. Mr Kennedy said he wanted to make clear there was no withholding of information and the matter would be dealt with. The receivers ability to run the business was being greatly affected by the proceedings, he added.
The petition is for appointment of an examiner to the trading side of Superquinn only. The property side of the group has ultimately had a negative impact on the solvency of the company, the petitioners stated.
They said the appointment of the joint receivers “spells the end” of Superquinn’s undertaking and represents a “disaster” for its creditors and employees.