Examiner for McSweeney pharmacy chain

AN interim examiner has been appointed by the High Court to 11 companies in the McSweeney pharmacy group, which employs 95 people and has debts of over €17 million.

The group’s companies in the North are not affected by the examinership and are trading profitably, the court was told.

Mr Justice Frank Clarke yesterday granted the companies’ application to appoint Denis McDonald of PriceWaterhouseCoopers as interim examiner and returned the petition to November 4.

Rossa Fanning, for the companies, said the matter was urgent as United Drug, possibly the companies’ largest unsecured creditor, attended at some of the pharmacies yesterday morning, moving to repossess stock, despite having been told on Wednesday of the intention to present the petition for examinership.

The petition had been presented in the High Court central office late yesterday afternoon. The Companies Act provides that when a petition is presented, a company is under court protection, counsel said. He was seeking orders to restrain the actions of United Drug.

Mr Justice Clarke said he would grant the injunctions as the law was clear and “not a matter for debate”. Any attendance at the companies’ premises or seizure of stock was unlawful and, if it did not cease immediately, United Drug could be in contempt of court, he warned.

Any goods seized must also be returned, he directed, and returned the injunctions to today.

The examinership petition is by McSweeney Dispensers Ltd, trading as Tohers Pharmacy, and 10 related companies in the group.

The group is not seeking examinership for other loss-making companies within it and plans to sell those or place them in liquidation.

An independent accountant had expressed the view the 11 petitioning companies had a reasonable prospect of survival provided certain conditions were met, including securing investment and implementation of an existing cost-reduction plan, the judge was told.

Mr Fanning said Geert Hof, the group’s founder and major shareholder, has resources and could provide €1,040,000 during the period of examinership so the companies could stock up for Christmas.

The companies said their difficulties were due to several factors including the recession, falling demand for toiletries and cosmetics, reduced margins on prescriptions and high rents.

Once restructured, the group anticipates it will consist of 11 companies, with four being liquidated. Most of the group’s losses are being incurred at retail outlets at Arthur’s Quay, Limerick; Midleton and Clonakilty, Co Cork; and Killarney, Co Kerry, it said.

The companies owe AIB €13.2m and unsecured creditors about €4m. They brought the petition after AIB rejected the group’s latest proposal this week.

The petitioning companies include Tohers Pharmacy, Sligo, employing 15; the McSweeney Group Ltd, which operates the group headquarters in Clondalkin, Dublin, employing 17; and other companies operating the Collooney Pharmacy, Co Sligo, employing four; Bermingham’s Pharmacy, Fermoy, Co Cork, employing six; Cassidy’s Pharmacy, Ennis, Co Clare, employing nine; O’Hara’s Pharmacy, Aungier St, Dublin, and O’Hara’s Medical, Kevin Street, Dublin, employing 11; Cleary’s Pharmacy, Dublin, employing 11; Dromahair Pharmacy, Co Leitrim, employing four; and Fleur Cafe, Sligo, employing eight people.