A High Court judge has granted a Co Monaghan-based marine biotech company protection from its creditors while it attempts to finalise a rescue plan that will ensure its survival.
At the High Court on Wednesday Mr Justice Michael Quinn said he was satisfied to make a series of orders protecting Bio Marine Ingredients Ireland Ltd from being sued over its debts.
The firm employs eight staff and is based at Lough Egish, Castleblaney in Co Monaghan.
The ruling was made after the court was informed that the company’s landlord had in recent days “peacefully retaken possession of” the Castleblaney premises on the grounds that Bio Marine Ingredients had forfeited its lease.
Stephen Walsh BL for the landlord, Americold Ltd which is also a creditor of the company, said his client was lawfully entitled to change a padlock on the gates and place a truck trailer in front of the facility’s main gate in an attempt to regain possession of its property.
The company, represented by Arthur Cunningham Bl, instructed by solicitor Graham Kenny of Eversheds Sutherland, rejected those claims.
However, despite the dispute, the court was told the company was now back in possession of the facility, and the landlord had removed the trailer.
The company, which makes ingredients from fish for human and animal foods, has entered into a process called the Small Company Administrative Rescue Process or Scarp, due to its insolvency.
The process is designed to help insolvent smaller businesses reorganise in a cost-effective way outside of any court-supervised process.
While the court was told the company’s Scarp “process adviser” has found that it has a reasonable prospect of survival as a going concern, several of its creditors, including the landlord, have threatened legal proceedings against it over alleged unpaid debts.
In the first application of its kind since Scarp came into being, the company asked the court for various protections, including stays on any proceedings against it while the rescue plan is being formulated.
The creditors, who between them claim they are owed more than €400,000 by the firm, include Americold Ltd, Bord Gáis and various service providers.
The court was informed by insolvency practitioner Declan de Lacy, who is the company’s process adviser and is represented by solicitor Peter Boyle, that the company expects to increase its sales volume in the future as several major new customers have come on board.
The company has also secured additional investment through an entity called Rolling Wave, some of whose shareholders own part of Bio Marine Ingredients. Rolling Wave is providing the company with cash to help cover day-to-day expenses during the rescue period.
Mr Cunningham told the court that if the orders it seeks were granted, any disputes with creditors would ultimately be resolved through the Scarp process.
Sally O’Neill BL, for Revenue, which is also a notice party to the action, said her client was not opposing the application.
In his ruling, the judge said he was satisfied the High Court had the jurisdiction to deal with the type of application made by the company. He granted orders that prevent various steps, including applications to have the company wound up or a receiver appointed over the firm, being taken against Bio Marine Ingredients, until the rescue period has been completed.
There were no objections to the orders sought by the company, the judge also said.
Noting the dispute, and various claims and denials made by the company and the landlord, the judge said the issue over the alleged forfeiture of the lease was for another day.
The judge said he also noted the actions of the investor Rolling Wave, and the fact that the company had expected to receive last month a rebate for its expenditure on research and development of more than €600,000 from Revenue.
However, Revenue had recently informed the company that it was not making this payment and was instead putting the credit towards other liabilities due to it by the company.
Previously the court heard that the company got into difficulty because of higher-than-expected research and development costs, that acceptance of its products with potential customers took longer than expected, and the underperformance of a contract with a Korean supplier due to the impact of Covid-19.
