Pharmacy group seeks examinership to finalise a survival scheme
The group’s companies in the North are not affected by the petition.
The companies’ have debts of more than €17 million with the bulk of that sum — more than €13m — owed to AIB, the largest secured creditor.
AIB opposed examinership in a hearing which opened yesterday before Mr Justice Frank Clarke.
AIB wants to appoint a receiver over the companies, and says the appointment of an examiner would not be in the bank’s interest.
James Doherty, for AIB, said there was no evidence the level of investment required to take out the bank’s interest was available.
Rossa Fanning, for the companies, argued AIB effectively wanted the court to throw out the petition without seeing the scope and shape of the proposed scheme of arrangement. The case for examinership was supported by a report of the interim examiner and by United Drug, a substantial creditor of the companies, Mr Fanning said.
Brian Kennedy, for interim examiner Denis McDonald, provided an interim report from his client which set out efforts to secure rent reductions for the companies and other matters. He told the judge the companies’ cash flow projections do not require additional funding to be provided for the companies throughout the examinership period.
The 11 companies secured court protection last month. The McSweeney group is not seeking examinership for other loss-making companies, as it plans to sell or place them in liquidation.
An independent accountant said 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 companies have said their difficulties were due to several factors including the recession, falling demand for toiletries and cosmetics, reduced margins on prescriptions and high rents.
The petitioners include pharmacies in Dublin, Cork, Clare and Sligo.
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