Administrators of Orla Kiely licensing arm due to secure extra royalties
Royalties settlement of £120,000 have been obtained in the most recent reporting period
Orla Kiely in 2013. The administrator has been overseeing Ms Kiely’s main business, Kiely Rowan plc, which collapsed with debts of £7.25m in September 2018. File photograph: The Irish Times
The administrators of a licensing arm attached to the collapsed Orla Kiely fashion retail empire have said additional licensing royalty payments are due to the administration estate.
The administrators to the Kiely Killyon Stem LLP confirmed they have secured a £120,000 (€139,000) settlement in respect of royalties owed in the latest six-month reporting period.
They stated that this was secured after their forensics team conducted an investigation into the royalties received.
In their latest six-monthly report covering the period up to March 20th, the administrators noted that “recent investigations have been conducted into an additional licence agreement which has highlighted additional amounts which are due to the Administration estate”.
The administrators state that “negotiations are currently ongoing”.
The main activity of Killyon Stem LLP was in holding licence agreements with manufacturers on behalf of the Orla Kiely brand.
Administrator Chris Newell has also been overseeing the administration of Ms Kiely’s main business, Kiely Rowan plc, which collapsed with debts of £7.25 million in September 2018.
The partnership owed secured creditor Metro Bank plc £2.15 million on appointment and Mr Newell reported that £284,253 has been distributed to the bank to date, including £65,753 in the latest six months.
Paid in full
Mr Newell said it is not anticipated that Metro Bank will be paid in full. He confirmed that he has received four claims from unsecured creditors totalling £1.9 million and he estimated that the final dividend to unsecured creditors will be in the range of 20p to 30p in the pound.
Mr Newell said the focus of the joint administrators’ investigations remains on fully exploring the flow of funds through the Orla Kiely group companies – Killyon Stem LLP and Kiely Rowan plc.
Mr Newell contends that the failure of the business appears to be the amounts used to fund the business of the US entity where the opening of a store in New York City created a drain on cash flow, causing the requirement for additional borrowing, which eventually lead to the collapse of the group.
In the latest update, Mr Newell stated: “Investigations into this matter and the actions of the directors in funding the US project to the detriment of the remainder of the group is currently ongoing.”
Mr Newell confirmed that fees totalling £161,993 have been drawn to date in the administration. He said the case continues to be complex.