A £1.4 million investment scheme to save 109 jobs at Lissadell Towels of Carrickmacross, Co Monaghan, was approved in the High Court yesterday in spite of opposition from the Revenue Commissioners.
The President of the High Court, Mr Justice Costello, said it would be proper for him to confirm the proposals of the examiner, Dublin accountant Mr Jason Sheehy, for the survival of the company as a going concern.
The Revenue had sought modifications of the examiner's scheme but these were rejected by Mr Justice Costello. He said he was not satisfied the proposals were unfairly prejudicial to the Revenue.
Mr Sheehy, in an affidavit, told the court he was not satisfied the private investor would proceed with the investment were the modifications sought by the Revenue made.
Mr Justice Costello said ii was clear that if he did not confirm the scheme the company would be wound up and 109 employees would lose their jobs.
Mr Sheehy was appointed last December after the court was told the company had a retained loss of £1.1 million for the previous year.
Mr Charles Meehan, counsel for the examiner, said that under the survival package, employment would be reduced from 146 to 109. This had been agreed between the workforce and unions.
There would be an investment totalling £1.4 million and shares would be transferred to the new investor. Forbairt, the State development agency, was investing £400,000 and the balance of £1 million was from a private investor.
The Revenue had an unsecured debt of £165.027 and was a preferential creditor for £193,659. Under the scheme the Revenue would waive 25 per cent of the preferential amount and be paid the balance by instalments. There were also three secured creditors ICC, Ulster Bank and Ulster Investment Bank.
Mr Meehan said there were arrears of pension contributions totalling £27,000 and £9,000 owed in rates both to be paid in instalments. The costs of redundancy and reorganisation were to be met out of the investment monies.
Lissadell is to receive a further £400,000 from the private investor by way of working capital.
Mr Justice Costello said the Revenue was correct to bring to the notice of the court its reservations. He believed the examiner's proposals, in all the circumstances, were reasonable and he did not think they were unfairly prejudicial to the Revenue.
They had been approved by other creditors.
The Revenue rightly felt concerned about the way people in this company had dealt with tax liabilities and there had been very serious defaults by persons in charge in the past. It was hoped that this would not occur in the future, Mr Justice Costello said.
If it did occur, he thought the Revenue would be entitled to brings proceedings in the court immediately and they should no allow any major debt to occur, as in the past.
He was told that if the company went into liquidation the Revenue would be worse off than under the survival scheme.
If he did not confirm these proposals, there would be very considerable loss of employment if the company had to be liquidated.
If he confirmed the proposals there was a reasonable prospect of the company's survival based on the view expressed by the examiner.
This was a view which got support from a private investor who was prepared to invest £1 million and Forbairt would put in £400,000 in the hope the company could get over its present difficulties.
The examiner had said that if the scheme were modified it would not be implemented and, said the judge, he must pay careful attention to this opinion.
He did not propose to modify the scheme.
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/VR3765MFOBH2NMV2QNICYDF67M.png)