Peats World of Electronics joins long list of failed rescue plans

Peats World of Electronics, which ceased trading yesterday, is among more than 20 companies to have received court approval for rescue plans in recent years, only to re-enter insolvency a short period later, according to figures supplied by Vision-Net.

The company told staff yesterday it was closing its flagship store on Parnell Street in Dublin, with the loss of 22 jobs. In recent weeks, it closed its only other store, in Rathmines, after shuttering about 10 outlets last year. Its consumer electronics website is also to cease trading.

Ben Peat, the chairman of Peats World of Electronics, is among the biggest financial losers from the its decision to cease operations 12 months after it exited examinership.

Mr Peat, whose family have run the retailer for almost 80 years, wanted to put the company into liquidation last Spring, but after receiving advice from “accountants” it opted for examinership, which it exited last July. Documents filed as part of that process show Ben and Josephine Peat injected an extra €155,000 into the company to keep it afloat.

Back rent
A trust owned by the Peat family, which owned its Parnell Street and Rathmines stores, wrote off more than €390,000 owed in back rent and waived up to €250,000 in rent payments for the two stores. The rent holiday expired last month. Mr Peat owns 61 per cent of the trust.

Mr Peat declined to comment when asked about the decision last year to switch from a planned liquidation to examinership, which cost the company €167,000 in fees.

The company originally announced at the beginning of April last year it was shutting down, but three weeks later it entered examinership instead. Neil Hughes, of Hughes Blake accountants, was appointed to oversee the restructuring.

Mr Hughes blamed a further decline in consumer spending for the demise of Peats 12 months after the High Court approved its rescue plan.

Conflicting advice
Rossa Fanning, the company's barrister during its examinership process, told a High Court judge at the time that it didn't want to enter "the blame game" but had received conflicting advice from different "accountants" about whether it was suitable for examinership.

Mr Hughes said his firm had not advised Peats to enter the process. “Their own lawyers and accountants were talking to them first, after which they approached [a well-known firm of liquidators]. They put the company in touch with me, and afterwards I got a call to say they had changed their mind and wanted examinership.

“We are unashamedly a pro-examinership firm. Our view is that every effort should be made to save jobs.”