Court told HMV interested in Zaavi's Irish stores
HMV is interested in taking over at least five of the closure-threatened Zaavi music stores in Ireland, formerly Virgin Megastore units, the High Court was told today.
Mr Justice Bryan Mc Mahon, who directed the appointment of a provisional liquidator to Zaavi Retail Ireland Ltd, heard that negotiations with HMV could yet result in the take over of possibly more than five Zaavi stores in Dublin and throughout Ireland.
James Doherty, counsel for Zaavi, said the company employed 207 permanent staff and 93 temporary staff and the talks which had already taken place between Zaavi and HMV could yet save many of the jobs.
He said Zaavi stores in England were already in administration and the Irish retail company was facing debts to creditors of €11 million. The appointment of a provisional liquidator could keep the Irish retail outlets ticking over on the sale of existing stocks long enough to facilitate the suggested takeover.
Mr Doherty said the board of Zaavi Retail had decided the company should be wound up and was seeking such a declaration from the High Court and the appointment of Mr David Hughes, of Ernest and Young as provisional liquidator.
He said the main function of the provisional liquidator would be to protect the company’s assets within its various stores in Ireland and allow for the continuance of trading until the determination of a company petition to put the firm into liquidation if not sold before then.
Mr Doherty said the company had been unable to obtain supplies on credit since the closure of the Woolworth chain and was now demonstrably insolvent, no longer able to pay its debts as they fall due.
The board had considered that putting the company into examinership did not offer a realizeable prospect of survival and felt the best deal for creditors and employees, in the short term, could be achieved through liquidation.
HMV had expressed an interest in taking over five of Zaavi Retail’s stores in Ireland with a possibility of taking over even more. The Irish operation had been a reasonably profitable one prior to the collapse of its main supplier.
Mr Doherty said any Zaavi vouchers which had been bought since November 27th last could now be redeemed for cash in any Zaavi Retail store in Ireland. The redemption of vouchers purchased prior to that date would create problems for customers because
of the insolvency of the company.
Mr Justice Mc Mahon appointed Mr Hughes as provisional liquidator with powers to secure all of the company’s assets, run bank accounts on its behalf, appoint a valuer and negotiate with HMV or any other group interested in taking over its shops.
The petition to wind up the company was adjourned until January 19th.