The move, on the petition of a Nama company, comes as a pre-pack receivership of the Mayo company before a management buyout unravelled in the last few days.
Mr Justice Brian McGovern was told the board of the company which owns Elverys, Staunton Sports, supported the petition by National Asset Loan Management Ltd for an interim examiner to be appointed.
The judge was told that it was not a hostile petition and Nama is the company’s largest secured creditor with loan facilities due and owing of over €23m.
Moving the petition, Rossa Fanning said Nama was optimistic in relation to the company continuing as a going concern and believes it has a very good prospect of surviving with two rival bidders — the existing management and a company Sports Direct — now jockeying for position. Counsel said Nama believes the underlying business is viable as a going concern once the debt issues are dealt with.
Nama, he said, has indicated it will give financial support once the company has court protection.
Counsel said Nama wanted a successful resolution of the examinership process.
Mr Justice McGovern was also told there was an urgency to the application of an interim examiner to assist in negotiations with suppliers to ensure continuity of supply to the sports chain.
Nama, he said, was unable to produce an independent accountant’s report because of the exceptional circumstances which prevail in relation to the company and the urgent necessity of making the application to seek to preserve the company’s position.
Mr Justice McGovern, appointing Simon Coyle of Mazars as interim examiner initially for the next six days, deemed the circumstances exceptional and set down the hearing of the petition for February 18. He said the independent accountants report should be available to the court on February 11, when Nama intends to apply for an extension of the protection.
In an affidavit, Nama said it had on January 31, following receipt of an invitation to appoint a statutory receiver, issued a formal demand letter to the company for €23m and stg£253,601.
The 2012 audited accounts for Elverys showed a net liability position of about €22m and that the company has suffered through lack of investment in recent years, particularly in relation to the store portfolio. Revenues in 2012 were about €69m.
Nama had engaged in discussions with Elverys at the end of last year in relation to a management buyout which would take place after a pre-pack receivership and this was to go ahead at the end of January. The requirement for court protection, Nama said, arose as a matter of great suddenness and the agency had not contemplated the possibility of having to take this step — which it has not take previously in respect of any other company of which it is a creditor — until the last few days.
Nama said it is confident Elverys has a reasonable prospect of survival of the whole or a part of its undertaking as a going concern and there are now at least two parties interested in acquiring the business as a going concern.
While Nama felt there was merit in the proposed pre-pack receivership proceeding smoothly last weekend, the fact is the landscape has now changed and it is no longer apparent the offer from existing management is the best option for the company and all its stakeholders, it said.
Nama said it believed the determination of the future ownership of Elverys and its underlying enterprise should be placed in the hands of an independent court-appointed examiner who could advance negotiations with all interested parties.