Stores granted orders to revoke leases

THE HIGH Court has granted Chartbusters home entertainment stores orders revoking lease agreements it had entered into for a number of its outlets.

The company had claimed that the termination of the lease agreements, for premises that the company says it no longer needs, will allow the court-appointed examiner to the company to finalise his scheme of arrangement.

If successful and approved by both company’s creditors and the High Court, the scheme will allow Chartbusters to be restructured and trade into the future. The company hopes that 23 of its 36 stores may be saved.

Yesterday Mr John Edwards granted the company application to have the lease agreements in relation to six stores repudiated. The court heard that the examiner intends to include any outstanding liabilities of the landlords of the premises as unsecured creditors in the proposed scheme of arrangement.

Mr Justice Peter Kelly appointed Neil Hughes as examiner to the group on January 26th last.

The company and six related firms, including tanning and weight-loss outlets, had applied for the protection of the court after it revealed it had debts of some €20 million.

The court was told on that occasion that the company has a reasonable prospect of survival once certain conditions are meet.

An independent accountant reported that the company and related firms could survive as a going concern with new investment, closure of underperforming stores, negotiations with landlords and acceptance of an appropriate scheme of arrangement by the creditors.

Chartbusters was incorporated in 1993 as a video rental business, and had operated more than 30 stores with more than 260 employees nationwide.