A HIGH Court judge has confirmed the appointment of an examiner to the Lynch Hotel group, Ireland’s largest family-run hotel group.
Ms Justice Mary Finlay Geoghegan said yesterday she was satisfied to confirm Michael McAteer of Grant Thornton as examiner on the basis of an independent accountant’s report indicating the group had a reasonable prospect of survival as a going concern.
The examiner has up to 100 days to come up with a scheme of arrangement. The group employs more than 450 full-time workers and has debts of €22.85 million.
The companies under court protection are West County Hotel Ennis Ltd; Dale Park Properties Ltd; Breaghwy House Hotel Ltd; Pyrmont Ltd; LHG Catering Promotions Ltd; Breaffy Wellness Hotel Ltd and Clare Inn Hotel Ltd, all with registered addresses at Clare Road, Ennis, Co Clare.
The hotels operated by the group include the West County in Ennis; the Clare Inn, Dromoland, Co Clare; George Boutique Hotel and South Court Hotel, Limerick; The Breaffy House Hotel and Spa, the Breaffy Woods Hotel and Breaffy Suite in Castlebar, Co Mayo and the Ocean Cove Hotel, Kilkee, Co Clare.
The group sought the protection of the court because it is unable to pay its debts, but the independent accountant and directors believe it can survive if certain measures are implemented.
Ms Justice Finlay Geoghegan was told yesterday by John Gleeson SC, for the group, that it needed to undergo restructuring if it was to survive as a going concern. There had been no objection from any creditors to examinership, he added.
Another important consideration was that the group, with 450 full-time employees plus 50 seasonal staff, provided good employment in the western seaboard counties, he said.
Rossa Fanning, for the examiner, said Mr McAteer has had discussions with a number of parties, including one potential investor.
The petition for examinership was brought by Michael B Lynch, Kilone Grove, Ballybeg, Ennis, Co Clare, the group’s managing director since 1996. The directors of the firm are Michael B Lynch and Michael Lynch snr.
The main creditors include the Revenue Commissioners, AIB, Bank Of Scotland (Ireland), Bank of Ireland, Diageo Ireland and Celtic Linen Ltd, the court heard.
The group’s financial difficulties arose from several factors, including low occupancy rates at the Breaffy House Hotel, “unsustainable” leasing agreements relating to some hotels and the economic downturn, the court was told.
As part of a restructuring programme, the group also sustained a net loss of €10 million in disposing of a number of hotels, including the Green Isle Hotel in Dublin and Hayden’s Hotel, Ballinasloe, Co Galway.
