Limerick companies arrange debt restructuring deal

Nick Rabbitts

Reporter:

Nick Rabbitts

TWO Kilmallock companies which went into examinership with debts of more than €2m have been ordered to repay some of these in part.

TWO Kilmallock companies which went into examinership with debts of more than €2m have been ordered to repay some of these in part.

Lynch Freight, with an address at Garrynoe, Kilmallock, and Kilmallock Transport with an address at the IDA Industrial Estate in Bruree Road, Kilmallock, secured the protection of the courts in February.

Peter Russell of Russell and Co chartered accountants in Cork was appointed by the High Court in February to restructure the company’s debts.

And documents just released show the firm has come to a proposed scheme of repayments with its 40 creditors, mainly local companies.

Some 36 people work for the company.

Creditors to the two companies have been divided into three categories - Super Preferential, Preferential and Unsecured.

In his report, Mr Russell stated the ‘Super Preferential Creditors’ will be paid 100% of the amount due.

This includes some €15,093 owed to the Collector General in terms of unpaid taxes.

It is this body which attempted to wind up the firm last year.

However, they withdrew this petition in order to allow Mr Russell attempt a restructuring programme.

It has been recommended the firm will also repay a further €137,000 of a €220,000 bill it built up in terms of VAT, commercial rates, and further income tax.

The unsecured creditors will recover 23% of their debts over the next 36 months by instalment

Companies being owed money include Bank of Ireland, Electric Ireland, Primeline Express and Corrib Oil.

In his report, Mr Russell expressed confidence the companies will survive.

He wrote: “Based on the Independent Accountants Report, certain conditions and recommendations were set out to enable the companies to have a reasonable prospect of survival.”

Management are also satisfied that Kilmallock Transport and Lynch Freight can both generate a profit in 2012-13 and future years.

Mr Russell recommended the cost-restructing measures to the High Court for their approval.