Interim examiner appointed to companies behind award-winning restaurants

THE High Court has appointed an interim examiner to several related companies that operate a number of well-known and award-winning restaurants in Limerick and Cork.

The application for the protection of the courts was made in relation to firms behind the award-winning Cornstore Restaurants in Cork and Limerick. 

The applicants also operate the casual-dining Coqbull restaurants, which are based in Limerick, Castletroy and Cork.

Between them, the companies employ around 200 people.

The application to appoint an examiner was made after the group's main creditors - the Swedish-based Proventus Capital Partners III KB fund - appointed receivers over certain assets of the businesses after its demand for payment of approximately €26.74m of the related companies' debts was not made. 

The companies seeking the appointment of an examiner are Keep it Real Holdings DAC, Rosewalk Ltd, Coal Quay Restaurants Ltd, Winstore Restaurants Ltd, Burgerchick Cork Limited, Burgerchick Limerick Ltd and Burgerchick Casteltroy Limited.

The court heard that companies had been controlled by brother-and-sister Patrick and Linda Frawley, who are well known in the hospitality sector.    

On Tuesday evening, Ms Justice Eileen Roberts said she was satisfied to appoint insolvency practioner Mr Joseph Walsh of JW Accountants as interim examiner to the companies.

The judge said that it was accepted that the companies are currently insolvent and are unable to pay their debts. 

Marylebone Taverns Limited, which is a company owned by Mr Frawley, petitioned the court seeking to have an examiner appointed to the seven companies.  

Ross Gorman Bl for Marylebone said that despite the firms difficulties an Independent Expert's report, compiled by Cormac Mohan of FM Accountants, states that the businesses have a reasonable prospect of survival as a going concern if certain steps are taken.

In his report Mr Mohan said that the appointment of an examiner who would put together a scheme of arrangement with the creditors, could see the businesses -  which have been running for a long number of years and have been largely profitable and are well-run -  survive as going concerns.  

Counsel said that Mr Mohan had also stated in his report that the companies will also need additional investment. 

Mr Gorman said that there has already been one expression of interest from a potential investor, who has a long track record in the Irish hospitality sector.

He added that the source of the companies difficulties was the performance of other related companies in the group which are based in the UK. 

Counsel said that the group had entered into an arrangement with the Swedish-based fund to re-finance loans it had taken out for purposes including acquiring businesses in the UK.

He added that the group's restaurants had been badly hit by Covid-19. 

The UK companies, which are not seeking the protection of the courts, fared worst of all during the pandemic, counsel said.

This, he said, was due to the fact the government supports in Ireland for businesses were far better than those on offer in the UK.

The group's Irish businesses have been generally profitable and had been trying to service the debt of the related UK restaurants.

Counsel said unfortunately the group has not been able to service the debt owed to the fund since December of 2022, and it was accepted that the entities were in default of the repayment obligations.

The parties had been working with each other to try and resolve the issues between them.

However earlier this month the fund sought repayments of £19m and €4.9m.

When this was not paid, the fund appointed joint receivers over the shares of some of the companies which are now seeking protection. 

The joint receivers, who were put in place last Friday, also appointed new directors and secretarys to those companies, counsel said.

While the restaurants continue to trade,  Mr Gorman said the change of operators of the companies was of concern to his clients.

As a result, counsel said that his side was seeking Mr Walsh's appointment, on an ex-parte basis, as well as orders requiring the joint receivers to cease acting and that they hand back and books, records relating to the firms. 

Ms Justice Roberts said that she was prepared to appoint Mr Walsh on an interim basis. 

However, the court was not prepared to make an orders against the receivers at this stage of the proceedings. 

The matter was adjourned to a date later this month, but Mr Justice Roberts said the applicant could return to court before then should the need arise.