Clarity Engagement Solutions, a Dublin-based performance consulting business that provides virtual training to global pharmaceutical companies, has moved to appoint an adviser to work out a rescue plan for the troubled company under a new process for small and micro companies.
Clarity Learning Systems, trading as Clarity Engagement and C3H, has appointed Declan Hanly of Crowe Ireland to restructure debts under the Small Companies Administration Process (Scarp) unveiled last year as a cost-effective alternative to the examinership process.
Mr Hanly will now work out a rescue plan for the company, which could involve writing down debt owed to creditors. They will ultimately have to vote on the final terms of the agreement.
The company’s founder and chairman, US businessman Christopher Deren, told The Irish Times that he did not wish to comment on the circumstances surrounding the appointment. However, he said: “The company continues to trade and is confident that, once restructured via the Scarp process, it has excellent prospects for trading.”
Clarity Engagement has not yet filed accounts for 2020 or 2021, with filing deadlines having been extended during the Covid-19 pandemic.
At the end of 2019, the company employed five people and had total liabilities of more than €935,000, some €346,000 of which was owed to credit institutions. Clarity Engagement was owed more than €1 million by its ultimate US parent company Clarity Learning LLC, a company registered in the United States.
Clarity Engagement’s sister company, Clarity CX1, completed a €1.6 million funding round earlier this year, led by DBIC Ventures. The company, a spin-out from Clarity Engagement, develops customer relations management systems built on the Salesforce Lightning platform, targeting large multinationals in the pharmaceutical, manufacturing and financial services sectors.
A spokeswoman for DBIC, which has since rebranded as Furthr Venture Capital, declined to comment.
Introduced last year to supplement the examinership process, Scarp is designed to give small companies that are struggling financially and are either unable or unlikely to pay their debts some protection from their creditors while they restructure.
To apply for protection under Scarp, companies must have no more than 50 employees and annual turnover not exceeding €12 million, with a balance sheet of no more than €6 million.
Clarity Engagement is just the 12th company to apply for Scarp, which insolvency practitioners say could provide a vital lifeline to SMEs struggling with cash flow over the coming months as the Government’s Covid-era tax warehousing scheme comes to an end.
