400 jobs saved in first quarter

Nearly 400 SME jobs were saved during the first quarter of this year through use of the examinership process; now made easier and more cost-efficient by new legislation.

New figures from Dublin-based chartered accountants, Hughes Blake, show that 372 jobs were saved between the beginning of January and the end of March at six firms – Fossett’s Circus; Hyper Trust, the operator of Dublin pub, the Leopardstown Inn; structural steel supplier, Henry McGinley & Sons; and fashion chains Karen Millen Ireland, Warehouse Fashion Ireland and Coast Stores Ireland.

Legislation now allows SMEs to apply for examinership – if in need of court protection to safeguard the future of their business – via the Circuit Court rather than the High Court; a move which should typically slash average examinership costs by around 30% to €7,000.

“In line with the introduction of Circuit Court examinership, we are seeing a steady uptake on the mechanism by small and medium firms who are attracted by the cost saving represented by not having to attend hearings in the High Court,” said Neil Hughes, managing partner at Hughes Blake.

“It is far better to have such firms proactively move to enter examinership than end up in liquidation, where thousands of jobs are lost each year. With examinership, there is the potential to preserve employment and to maintain an array of goods and service providers in Ireland’s towns and village communities,” he added.

The Hughes Blake data follows separate figures from Deloitte, earlier this week. They showed a 17% year-on-year drop in insolvencies/company failures in the first quarter, but a 13% increase on the last three months of 2014. However, a large element of Deloitte’s message was what it viewed as being “disappointingly low levels” of threatened firms not taking the examinership option.

David Van Dessel, head of Deloitte’s restructuring division, said; “[The legislation, which came in early last year] has not had the anticipated effect of encouraging more struggling SMEs to avail of this more cost-effective and accessible option.

“Anything which can be done to ensure that more of the businesses which are suitable apply for examinership should be seriously considered. This includes looking at broadening the remit of the Insolvency Service of Ireland to make it the central office to receive streamlined examinership applications.”