High Court approves survival scheme for Elverys Sports

The High Court has approved a survival scheme for the Elverys Sports operating company employing some 700 people full and part-time in 52 stores across the country.

The scheme, supported by the National Assets Management Agency (Nama), will see Staunton Sports exit examinership at 1pm on Friday, Mr Justice Brian McGovern directed today. Nama is the company's largest secured creditor, owed some €23 million, after acquiring its AIB loans in 2010 and 2011 and will get value for its security, the judge heard.

Unsecured creditors will get 5 per cent of what they are owed and all but two unsecured creditors had supported the scheme, Declan Murphy BL, for the examiner, Simon Coyle of Mazars, said. Had the company been liquidated, unsecured creditors would get nothing, he added.

Preferential creditors - understood to mean the Revenue - will get 100 per cent of what they are owed, the court also heard.

Mr Murphy said there was an investment agreement, the conditions for which had now all been fulfilled following the court's decision approving the scheme. On exiting court protection, the company will be, and will remain, properly capitalised and a viable business is projected "going forward", he added.

Rossa Fanning BL, for Nama, said the company was doing better under examinership and Nama supported the application for approval of the scheme. Nama was getting value for its security and was “glad and relieved there has been a positive outcome to the independent and court supervised examinership process”, counsel added.

Mr Justice McGovern said he was satisfied to approve the scheme.

The petition for examinership was brought in hurried circumstances last February by a Nama company. Previously, the court heard Nama decided to petition for examinership after receiving a bid for the company it considered to be more favourable than a proposed managemement buy-out preceded by a “pre-pack receivership”.

Mr Justice McGovern granted court protection on February 7th pending receipt of an independent accountant’s report expressing the opinion the company had a reasonable prospect of survival.

That report was produced within days when the judge confirmed examinership after hearing there was no opposition to it.