Deutsche Bank is owed more than €690 million by a group of companies controlled by Galway businessman Gerry Barrett, the High Court has heard.
Last month seven companies that form part of the Edward Capital Group were granted the protection of the High Court after the bank appointed a receiver over the firms, which employ more than 330 full time and part time staff.
The companies sought the appointment of an examiner after the bank appointed a receiver over the companies.
Insolvency practitioner Neil Hughes of Baker Tily Hughes Blacke was appointed interim examiner over ML Meyrick Ltd, MT Mono Trading Ltd, Edward Leisure Assets UnLimited Company, Niche Hotels Unlimited Company, Style City Limited, Radical Properties Unlimited Company, and Kitty Hall Holdings Limited.
The assets of the various firms include the 4-star Meyrick Hotel, the 5-star G Hotel, the Eye Cinema which are all in Galway. They also hold various property assets including 38 apartments, a retail park, a house and sites in the Galway area.
Value
The total value of the seven firm’s assets has been estimated at between €55 million and €60 million.
The other companies in the Lord Edward group are not effected by the examinership application.
The group’s assets include landmark hotels and shopping centres and it had also operated a successful construction company. It had previously owned the world famous Ashford Castle Hotel in Co Mayo, which was sold four years ago.
The companies represented by Gary McCarthy SC and Ross Gorman sought the appointment of the examiner as the companies were insolvent and unable to pay their debts as they fall due.
It sought the appointment of an examiner after Deutsche Bank appointed a receiver over the seven companies.
The companies whose directors are Gerry Barrett and Catherine Barrett of Drimbawn House, Chestnut Lane, Lower Dangan, Galway accept the group is “very significantly indebted” to the bank to the tune of €698 million.
While the companies can service a certain level they say a large amount of what is owed can never be repaid.
The companies loans portfolio had been acquired by Nama, but was sold for an undisclosed sum to Deutsche Bank in 2015.
Since then the group has sold assets it held and refinanced some of the debt owed to the bank. It has also engaged with the bank’s representatives with a view to coming to an arrangement over the debts, including the disposal of assets.
Repayment
No agreement was reached and last month the bank issued a letter demanding full repayment of what it claims is due and owing. The bank then proceeded to appoint a receiver over the seven companies.
This resulted in the companies coming to the High Court and seeking the appointment of Mr Hughes as interim examiner. The companies argue that while they are insolvent they have a good prospect of survival if certain steps are taken. Their position is supported by an independent experts report.
The companies claim their trade has improved since 2014 and their underlying trade is profitable, the key problem being that they cannot service the level of debt owed to the bank by the group.
There has also been extensive discussions with a third party interested in investing in the group. It was also argued that the creditors and the employees would do a lot better in an examinership rather than if they are wound up.
The companies also submitted that the confirmation of an examiner would being certainty to the employees positions.
The examiner has up to 100 days to put together a scheme of arrangement which, if approved by the firms’ creditors and the High Court, will allow the companies continue to trade as going concerns.
The matter returned before the High Court on Friday when Mr Justice Henry Abbott approved the payment of a number of minor pre-petition debts. There were no objections to the application. The Judge adjourned the matter to a date later this month.