THE HIGH COURT has approved schemes of survival allowing seven companies, which employ over 330 people, controlled by Galway businessman Gerry Barrett to survive as going concerns.
Justice Marie Baker said she was satisfied to approve the scheme which will see the seven companies connected to Barrett formally exit the examinership on 21 December.
The companies exiting examinership include the five-star G Hotel, four-star Meyrick Hotel, an apartment firm, a retail park and the Eye Cinema which are all located in Galway City .
The court approved the schemes which were put in place by the examiner insolvency practitioner Neil Hughes of Baker Tily Hughes Blake, following lengthy talks between the companies and the firms main creditors Deutsche Bank.
Paul Gallagher SC, appearing with Neil Steen SC for the bank, which had supported the examiner’s proposals said that an agreement had been reached with the Barrett family who were withdrawing their objections to the scheme.
The terms of that agreement the court heard are confidential. The settlement was welcomed by the judge.
The companies represented by Gary McCarthy SC and Michael Cush SC sought the protection of the courts last September.
However the firms opposed the schemes of arrangement proposed by the examiner on grounds including that the schemes were unfair to one class of impaired creditors.
The companies, whose directors are Barrett and Catherine Barrett sought the protection of the court after Deutsche Bank appointed a receiver over the firms in late August.
Deutsche Bank, represented in court by Paul Gallagher SC and Neil Steen SC, had supported the scheme. Deutsche Bank is owed more than €690 million by the group after acquiring its loans from Nama in 2015 and initially opposed the appointment of an examiner.
It had done so on the grounds it was an attempt by the companies to renege on a 2016 debt settlement agreement which would have resulted in the sale of the group’s assets to reduce its debt to the bank.
However following rulings by both the High Court and Court of Appeal the examiner was appointed to all seven companies.
The companies, which are all part of Barrett’s Edward Capital Group are KH Kitty Hall Holdings Ltd, Ml Meyrick Ltd and Mono Trading Ltd, Edward Leisure Assets Unlimited Company, Niche Hotels Unlimited Company, Style City Limited and Radical Properties Unlimited Company.
Previously the court heard that under the schemes an investor called Waltzfire Ltd will put €89 million, plus an additional €9 million as working capital, into the companies.
Afterwards Hughes said that the approval by the court of the scheme “showed the benefits of the examinership process.”
He said that it was “an unusual case” where under the scheme all 330 full- and part-time workers employed by all the firms “had been saved” and “all the creditors had been paid”.
Hughes also thanked the Barrett family, the companies and the creditors for their assistance in formulating the schemes.
In a joint statement Gerry Barrett, the investor in the companies and the bank welcomed the courts decision to approve the seven schemes.
The successful examinership, the statement added, had secured full payment for all trade creditors and had provided security of employment for all the various firm’s employees.
As a result of the restructuring the companies will continue to trade as normal, the joint statement concluded.