Interim examiner appointed to food distribution companies

Turnover at connected companies plunged amid Covid-19

The High Court has appointed an interim examiner to three connected companies involved in the food distribution business after their turnovers plunged due to the Covid-19 pandemic.

Wert Capital Ltd and two related firms, Dublin Foods Sales Ltd and Scallans Food Service Ltd, which have more than 70 employees, were all granted court protection from their creditors.

The companies are involved in the delivery of mainly food and some non-food products to restaurants, pubs, offices hotels nursing homes and catering companies in the Leinster area and south east.

At the High Court on Friday afternoon, Ms Justice Niamh Hyland appointed insolvency practitioner Neil Hughes of Tily Baker interim examiner to the companies.


While the companies are currently insolvent and unable to pay their debts, an independent expert’s report expressed the view they have a reasonable prospect of survival if certain steps are taken.

Those included securing fresh investment in the firm, and the examiner putting together a scheme of arrangement with creditors, which, if approved by the court, would allow them continue to trade as going concerns.

The firms, represented by Ross Gorman BL, petitioned the court for Mr Hughes's appointment.

Counsel said they had been profitable in recent years but had run into cash flow difficulties.

The outbreak of Covid-19 and the resultant closure of businesses, schools, pubs and restaurants had seen the companies’ turnover fall by 70 per cent, he said.

The companies have also had to lay off a significant part of their workforce, counsel said.

Their creditors include Bank of Ireland, Revenue, a financial fund BDO Davy EIIS, from which the companies borrowed to fund acquisitions in 2017, and a significant number of trade creditors.

Other causes of the companies’ difficulties included a shortfall on an invoicing facility entered into with Grenke Invoice Finance.

Wages paid directly

Counsel said the appointment of an interim examiner was required to deal with the companies' employees who were in recent days paid their wages directly by a director of the companies, Richard Meehan.

The examiner as well as putting a scheme of arrangement together could also help resolve any issues with Grenke over the invoicing, counsel added.

Counsel said there have been expressions of interest in what are profitable businesses by investors and the firm was looking to diversify in these troubled times and establish a home delivery service.

After appointing Mr Hughes following the ex-parte application, the judge made the matter returnable to early next month.