The High Court has confirmed the appointment of an examiner to companies operating the well-known Dublin restaurant Dobbins, and Becketts Hotel in Leixlip, Co Kildare. The businesses employ some 60 people.
The companies sought court protection late last month due to cash flow difficulties caused by loss of business contracts and historic bank debt.
While Dobbins, St Stephen’s Lane, Dublin 2 and the 10-bedroom Beckett’s Hotel & Restaurant have good reputations and a loyal customer base, the fact the companies’ assets were acquired at the height of the Celtic Tiger has left the group with a high level of debt, the court was told during that application.
Mr Justice Brian McGovern this week agreed to confirm insolvency practitioner Kieran Wallace of KPMG as examiner of four related companies: Dobbins Wine Bistro Ltd; Dobbins Holding Company Ltd; Camrue Holding Company Ltd; and Camrue Catering Ltd.
Counsel for the Revenue did not object to examinership but said Revenue had serious concerns about how the business had been run and would be concerned if that manner of operation was to continue.
Andrew Fitzpatrick, for KBC Bank, the largest creditor, said it had concerns about information concerning rent issues previously put before the court and had asked the examiner to look into that. There must be clarity concerning what amount of rent is payable as that will affect the debt and the viability of the business going forward, he said.
The judge said KBC and Revenue had “flagged” their concerns which could be addressed at future hearings. In the interim, he would confirm Mr Wallace as examiner.
The judge appointed Mr Wallace interim examiner last month after being told an independent expert believed the companies have a reasonable prospect of survival if certain steps are achieved, including court approval of a scheme of arrangement with the group’s creditors.
As part of that scheme, the companies hope to restructure bank debt, pay a dividend to creditors, secure additional investment and enter into an open market lease for the companies’ premises.
Gary Flynn, Fontill Court, Rathfarnham, Dublin, and Patrick Walsh, Templeroan, Rathfarnham, the directors of the companies, were previously the restaurant manager and head chef at Dobbins.
The court previously heard they acquired the businesses in 2005 when property prices were approaching their peak. They got loans from KBC of more than €3.2 million to buy the group and carry out extensive works.
Turnover in the businesses increased in 2006 and 2007, dropped due to the financial crisis in 2008 and dropped year on year to 2013, putting significant cashflow pressures on the group, the court was told. The group has been unable to pay back what is due to KBC and has not always been able to honour instalment arrangements entered into with the Revenue, it was also stated.