The High Court has approved a survival scheme for the Four Star Pizza takeaway chain.
Mr Justice Brian McGovern was told today Gonville Ltd had agreed to invest €500,000 in Four Star’s parent company, Zowington, while its largest creditor, National Irish Bank (NIB) had issued a facility letter to re-finance a debt to the bank of €4.65m.
Gonville is an investment company of businessman Michael Holland who also owns the Fitzwilliam Hotel in Dublin, the court heard. His company has bought the Irish and UK franchise rights of the pizza chain and half of its investment will go directly into Four Star Pizza Ltd, the court was told.
The scheme also had the approval of most creditors, including the Revenue Commissioners, it was stated.
Examiner Neil Hughes was appointed last November to the pizza chain after the court heard it was insolvent and unable to pay its debts.
Rossa Fanning, for Mr Hughes, said the examiner believed there was a reasonable prospect of survival for the company which employs around 450 people indirectly and 25 directly.
The company, with 42 stores, was the second largest take-out franchise in the 32 counties, counsel said. Under the scheme, 37 stores would continue trading after closure of some stores and the repudiation of a number of leases
Mr Fanning said the company was valued at around €5 million but a winding up situation would mean a significant write-down on that value. A winding up would leave an “enormous deficit” of €3.8 million, he said.
Mr Justice McGovern said he was satisfied to approve the survival scheme and allow the company continue as a going concern.
*In a statement later yesterday, Gonville said Four Star’s future was now secured, it aimed to double the number of stores in Ireland over the next three years and would invest €750,000 in that expansion. It also intended developing the chain in the UK within two years.
A key element in Gonville’s decision to purchase the franchise was the ability of the company to repudiate the leases of the franchisees through the court which were then renegotiated on better terms, the statement said.