An examiner has been confirmed for a Co Mayo hotel employing 122 people.
Ms Justice Marie Baker said, for reasons including the number of persons employed by the McWilliam Park Hotel, in Claremorris, and its role in the local economy of a west of Ireland town, she would confirm examinership. The hotel has confirmed bookings for 29 weddings in 2016, and a further 10 so far in 2017, she noted.
Claremorris Tourism Ltd and MOPB Developments, owner and operator of the hotel, had petitioned the High Court judge to confirm the appointment of Kieran Wallace of KPMG as examiner.
CTL and MOPB, led by local accountant Damian Prendergast, built the hotel in 2006 with funds from Ulster Bank and the aid of a tax-relief investment scheme backed by developers including Seamus Ross of Menolly Homes, Garret Kelleher of Shelbourne Developments, and David Andrews and Michael Tunney of Lioncourt Capital.
In her reserved judgment, Ms Justice Baker rejected arguments against examinership advanced by Coney Investments Designated Activity Company (a fund that acquired the company's loans from Ulster Bank); the Revenue, which is owed €735,000; and John Killeen, a shareholder and former director of MOPB, who is suing it for €974,775.
Coney claimed the hotel had no real prospect of survival as a going concern. Mr Killeen argued he could propose a genuine alternative to examinership which would be less costly and still maintain the hotel as a profitable business.
He also claimed the true purpose of the petition was to protect MOPB against litigation by him and another shareholder.
The Revenue opposed examinership on grounds that a very significant corporation tax liability wad disclosed only on the petition, the judge noted.
In her judgment, the judge said while both CTL and MOPB are insolvent, with debts of €19 million mostly owed to Ulster Bank (now Coney), the hotel business is profitable, although vulnerable to demands of lenders who had advanced monies for fit-out of the hotel.
The ownership structure of the hotel was established so as to qualify for then available tax relief schemes, she said.
Prospect of survival
The real dispute in this application was whether the hotel has a reasonable prospect of survival, she said.
The objectors had identified issues of concern in relation to the available information on the financial state of CTL, and she accepted the company’s failure to file accounts in 2014 was of some significance. Coney had also correctly criticised some elements of the independent expert’s report.
On balance, the evidence pointed to CTL operating as a successful going concern with significant bookings for 2016 and ability to avail of improvements in the economy and increased tourism numbers.
A stay on any litigation concerning the companies applies pending the end of the examinership process.