United Drug undertakes not to repossess stock

UNITED Drug has undertaken before the High Court not to seek repossession of stock from 11 firms in the McSweeney pharmacy group which are under court protection.

The companies employ 95 people and has debts of over €17 million.

Mr Justice Frank Clarke yesterday discharged injunctions against United Drug, a creditor of the companies, which had restrained its attendance at the premises of the McSweeney companies or seeking to repossess stock.

Those orders were granted on Thursday after Rossa Fanning, for the companies, complained that United Drug representatives had gone to some of the companies’ premises that morning and sought to repossess stock despite having been told of the companies’ intention to bring a petition for examinership.

That petition was presented in the High Court central office late on Wednesday afternoon and the Companies Act provided that when a petition is presented, a firm is under court protection, counsel said.

Mr Justice Clarke granted the interim orders and warned any breach would be treated very seriously.

When the injunction matter came back before the judge yesterday, he was told United Drug had provided undertakings in the term of the orders. On that basis, the orders were discharged.

Next Friday the judge will hear the companies’ petition for appointment of an examiner. An interim examiner, Denis McDonald of PriceWaterouseCooper was appointed on Thursday.

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

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 or place them in liquidation shortly.

The companies said their difficulties were due to several factors including the recession.

Once restructured, the group anticipates it will consist of 11 firms, with four being liquidated.

The companies owe AIB €13.2m and unsecured creditors about €4m.

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