ONE OF Dublin’s top private members’ clubs, Residence, has gone into examinership.
Before granting the club owners, Missford Ltd, temporary High Court protection from creditors, Mr Justice John Edwards questioned yesterday how, in the current financial circumstances facing the country, it was envisaged that the company could be saved.
“Membership of a club like this is a luxury item and we have just emerged from one of the harshest budgets in living memory,” Mr Justice Edwards said.
“Is it being suggested that membership and the sale of food and beverage will grow in 2010 and 2011, in a situation where people have less money in their pockets?” he asked.
Mr Justice Edwards told barrister Ross Gorman, counsel for the company, that he had convinced the court there was enough evidence at this stage that there was a reasonable prospect of the company surviving as a going concern.
He appointed chartered accountant Jim Stafford, of Friel Stafford Corporate Recovery, as interim examiner.
Mr Stafford is to begin the process of preparing a scheme of arrangement with creditors and an outside investor under which the company would survive.
The potential investor was identified in writing to the court.
Mr Gorman told the court that Residence, a plush club spread over four floors in a period building overlooking St Stephen’s Green, Dublin, was owned by Missford Ltd.
The directors were Simon and Christian Stokes.
The company had been set up in November 2006 as a holding and investment company to develop and operate a licensed private members’ services and entertainment club with bars, accommodation and restaurants for members.
Following a €3.4 million refurbishment and fit-out funded by bank borrowings, the club had started trading in May 2008. Currently, Residence had 1,450 members and employed 58 staff.
Mr Gorman said the club’s main sources of income were membership subscriptions and sales of food and beverages, but it had failed to make a profit.
It had lent €616,000 to related companies Mayfair Properties Ltd, which trades as Bang Café, and Auldcarn Ltd, both of which were unable to repay the loan and were in the course of being liquidated.
Mr Gorman said the company owed about €1.2 million to the Revenue Commissioners who, after having receiving a payment of about €37,000 had, on December 17th, taken over the company’s bank account, which then contained €87,000.
He said an independent accountant had carried out a review of the company’s financial position.
Despite existing problems, that accountant was of the view that the company could become successful in the future if given the protection of the court, and it secured an acceptable arrangement with creditors and the proposed injection of new capital.
Mr Justice Edwards adjourned the case into the Commercial Court list of Mr Justice Peter Kelly on Wednesday, January 13th.