Interim examiner appointed to toy company in order to protect Walmart contract

By Ann O'Loughlin

An interim examiner has been appointed by the High Court to a toy-making firm that employs 41 people in Ireland.

Today Ms Justice Caroline Costello appointed Mr Neil Hughes as interim examiner to Yvolve Sports Limited, which makes the popular 'Flicker' scooter and other products for the outdoors and sports.

The appointment was made after the court was told an examiner was required to protect an important contract the firm has with US retail giant Walmart.

The company sought the protection of the court due to the bankruptcy of one of its major customers Toy R Us which has resulted in cash flow problems.

An independent expert report has said while the company is insolvent, the firm has a good prospect of surviving if certain steps are taken, including the appointment of an examiner.

The matter first came before the Judge earlier this week, when Ross Gorman Bl Clovergade Ltd, which is a 36% shareholder in Yvolve Ltd, sought the appointment of Mr Neil Hughes as the examiner.

The case had been adjourned to June 15, but returned before the court when Sino Foreign Trading Company, which owns 49% of the firm, sought to have another insolvency practitioner Mr John McStay appointed as examiner.

Today Alill O'Reilly Bl for Sino said his client had no issue with Mr Hughes, but was seeking the appointment of their candidate due to a breakdown in relations between the shareholders.

Counsel said his client believed that an examiner was required to ensure suppliers in China were paid and so the firm can fulfil its contractual obligations to Walmart.

The loss of that contract, counsel added, would be extremely detrimental to the company.

Mr Gorman urged the court to nominate Mr Hughes as interim examiner on the basis his client's application for examinership was first in time.

Ms Justice Costello said that she was satisfied to appoint an interim examiner to the company.

Noting the quality of the two proposed examiners the Judge said the court had "an embarrassment of riches" to choose from.

However, she was selecting Mr Hughes on the grounds his proposed appointment came first in time. The case was adjourned to June 15.