THE HIGH Court will be asked on Monday to make orders for the winding up of four of the 14 companies in the Thomas Read group on grounds that they have no reasonable prospect of survival.
Ms Justice Mary Finlay Geoghegan yesterday fixed Monday for hearing of the application by Kieran McCarthy, examiner to the group, for appointment of a liquidator to the four firms, operating The Life Bar, Abbey Street, Dublin; Bodega in Dún Laoghaire and Thomas Read’s, Smithfield, Dublin.
Mr McCarthy is finalising survival proposals for the remaining 10 companies in the group. The judge heard yesterday that bids for the group have been advanced by a consortium whose members were not identified, and by ACC Bank, the group’s largest creditor.
Lyndon MacCann SC, for the examiner, said his client had concerns whether the proposals advanced by ACC met certain requirements of the Companies Act 1990 related to formulating a scheme of arrangement, and wanted the court to decide the legal issue involved.
The court heard the examiner’s concern related to the fact that ACC’s proposals involve the bank not seeking to enforce securities for monies advanced to the group, and related to whether the Companies Act required, when a scheme of arrangement is approved, that a company be solvent from that date in the sense of being able to pay debts as they fall due.
Bill Shipsey SC, for ACC, argued that the issue of which bid to accept was for the examiner, and he should not be applying for the legal declaration sought.
After legal submissions, the judge ruled the Companies Act requires a scheme of arrangement must render a company solvent in the sense of being able, on the date the scheme comes into force, to pay its debts as they fall due.
She stressed her decision was on a legal basis and involved no judgment on the commercial merits of the ACC proposals or whether they met the requirements of the Companies Act.
Court protection for the companies in the group will continue until February 24th while the examiner finalises survival proposals for the 10 companies.
