The DIY and hardware chain, which is part of the Grafton Group, has 13 stores around the country, most of which are trading at a loss, the court heard.
Accumulated losses over the last five years are more than €21m with a projected loss for this year of €4.5m.
Presenting a petition on behalf of the directors for the appointment of an interim examiner, Michael Collins SC, said the Grafton Group includes the hardware chain Woodies which has been providing support for Atlantic. Had it not received such support, it is quite likely a receiver would have been appointed before now, he said.
As a result, there were no trade creditors but there were significant inter-company debts. The biggest liability was rent payments, nearly all of which are at rates significantly higher than market rates and all subject to “upward-only” rent reviews, counsel said.
While negotiations had taken place with some landlords, these were only temporary arrangements and in some cases, even if the rent was zero, the stores could not trade profitably.
It may be necessary to bring an application to repudiate leases on certain premises, counsel said.
The company’s view was that it was necessary to close five stores and it will be possible to save 234 of the 348 jobs. The five stores to shut are in Liffey Valley, Dublin, Pouladuff in Cork, Newbridge in Kildare, Childers Road in Limerick and Wellpark in Galway. Thirty-eight of the jobs there are full-time and 76 are part-time.
The court heard an independent accountant’s report by KPMG says the company has a reasonable prospect of survival if the restructuring plan is implemented.
Mr Justice Brian McGovern appointed Declan McDonald of PWC as interim examiner and made the matter returnable before the court on June 15 next.
Another retail outlet that is part of the Grafton Group, Heiton Buckley is to close all sections except for the steel business at its Bishopstown outlet in Cork.
Managing director Eddie Kelly said he was hopeful they could save half of the 15 jobs by transferring them to Cork Builders Providers.