Bank of Scotland has appointed joint receivers to the Mr Binman group of waste collection companies which employ more than 330 people across Munster, with another 200 jobs indirectly dependent on them.
The bank is the companies' biggest creditor and is owed €53 million. Counsel for the bank told the High Court today the receivers will operate the business as a going concern for the "short to medium term", wages will be paid and waste collection services will be maintained.
The bank's move came after the directors of the companies told the High Court they would not be appealing the court's earlier refusal to appoint an examiner and were not objecting to receivership.
In those circumstances, Ms Justice Mary Finlay Geoghegan ceased court protection for the companies, discharged the interim examiner and said no winding up order would be made.
The appointment of Kieran Wallace and Padraic Monaghan as joint receivers was made just hours after the judge refused to confirm examinership on grounds the companies had failed to provide adequate evidence to show they had a reasonable prospect of survival.
The judge said she had reached that conclusion "with regret" and was extremely concerned about what was to happen now to the employees.
She continued court protection while the companies considered whether to appeal but their counsel later indicated there would be no appeal.
Counsel said an appeal was not practical given the daily nature of the companies business and his clients were not objecting to a receiver but a winding up order would jeopardise the companies' licences.
Bernard Dunleavy, for Bank of Scotland, said the bank had engaged with the companies since the court's ruling and matters had progressed.
The bank was appointing joint receivers and a team to work with them which included experts in the waste business.
One of the receivers was preparing to go on site to assure employees wages would be paid and the intention was the business would trade in the short to medium term, he said.
Cormac McNamara, for Limerick County Council, said his client noted the receiver's intent to keep the business trading, to pay employees and to maintain waste collection services.
The Council would require plenty of notice if that situation was to change, he said.
Ms Justice Finlay Geoghegan said she would not make a winding up order in circumstances where the bank had appointed receivers and put arrangements in place to protect the companies' assets and the position of creditors and where the receivership did not have the effect of terminating contracts of employment.
Bank of Scotland had strongly opposed examinership in proceedings before the judge last week on grounds including its claim the companies had no reasonable prospect of survival.
All other creditors of the companies had supported examinership while the Revenue Commissioners, owed €1.6m, adopted a "guardedly neutral" position.
The companies claimed their business was viable and said six investors had indicated a serious interest in investing in the companies.
The court heard their insolvency was due to several factors, including the recession, increased competition, significant costs of expansion and the refusal of BOS to provide further financing.
In a statement this afternoon, the group’s directors said they were “bitterly upset and disappointed at the decision” and had done everything in their power to save the company.
They said they have decided not to appeal the judgement on the basis of the “complete intransigence of Bank of Scotland (Ireland) who vehemently refuse to support an examinership despite the fact that over six investors had expressed interest in investing in the group and all other creditors supported the examinership route”.
