THE HIGH Court has confirmed the appointment of an examiner to award-winning Dublin food business Fallon & Byrne.
Mr Justice Brian McGovern, on being satisfied yesterday the company had a reasonable prospect of survival, appointed Neil Hughes, of Hughes Blake, Chartered Accountants, as examiner to the company, which operates a restaurant and gourmet food hall on Exchequer Street.
Mr Hughes now has up to 100 days to devise a survival scheme to be approved by a majority of creditors and by the High Court.
The company had petitioned for an examiner on grounds that, while insolvent and unable to pay a €1.4 million tax bill, it had a reasonable prospect of survival. A report by an independent accountant said the business could survive if certain conditions were met, including securing new investment.
The court heard the company’s creditors either supported or were neutral on the petition, while the Revenue Commissioners adopted a “guarded but neutral” stance.
Yesterday, Rossa Fanning, for Mr Hughes, said his client shared the view that the company had a good prospect of survival. There were already 18 expressions of interest in the company by prospective investors, he said. No bookings had been cancelled and six bookings for significant events had been made since the company sought the appointment of Mr Hughes, counsel added.
Senior counsel Gary McCarthy, for the company, said if the company were liquidated there would be a deficit of more than €2 million and the creditors including Revenue would get very little. The deficit on a going-concern basis would be reduced to €390,000, he said. The court previously heard the company’s problems arose mainly from a decision by the directors Paul Byrne and Fiona McHugh to concentrate on front-of-house duties while leaving financial administration to an under-qualified bookkeeper who was a member of Mr Byrne’s family.
Unknown to the directors, substantial arrears of taxes of about €840,000 were allowed build up between 2006 and 2009, despite relevant returns having been made to the Revenue, which eventually issued letters of demand and ultimately a petition to wind up the company, the court heard.
He said Fallon & Byrne had called in Delaney, Locke and Thorpe (DLT) accountants to represent it during an audit and discovered a number of inaccuracies and discrepancies in record-keeping. It was found the financial administrator had misappropriated company funds of at least €223,000 over a number of years.
The court heard the family member responsible had suffered a breakdown, ceased to be employed and could not compensate the company. An instalment plan to pay off the tax debts had been agreed with the Revenue but in so doing the company had fallen behind with its current tax payments and the Revenue had ultimately lost patience, it was stated.
As a result of its difficulties with the Revenue, the company had been unable to get a tax clearance certificate to renew its drinks sales licence, counsel said. The DLT firm believed, with court protection from creditors, the company would succeed and it was currently trading well, he added.