Majority of creditors approve rescue plan for Rathwood, High Court hears

High Court reporters

A majority of creditors of troubled home and garden retailer Rathwood have approved a rescue plan for the company, the High Court has heard.

Rathwood, a business controlled by the Tullow, Co Carlow-based Keogh family, entered examinership in late April. The company currently has total liabilities of €21.16 million, according to figures provided to the court.

Lawyers for the company’s examiner Padraic Bermingham are now seeking a court order approving a rescue plan for the business, known as a scheme of arrangement.

The plan, if implemented, will see an external investor come on board and new management take control of the business.

According to his latest report, opened to Mr Justice Rory Mulcahy on Thursday, the examiner remains of the view that the company has a reasonable prospect of survival if the rescue plan is implemented.

He said the plan, in his opinion, is "in the best interests of creditors as a whole" and will provide a more favourable outcome than if the company was wound up.

The plan provides for the continuation of the company’s business, and the retention of its 62 employees, he said.

At Thursday’s hearing, barrister Stephen Brady, for the examiner, told the judge a majority of the company’s creditors had approved the rescue plan at meetings held this week and indicated his side was seeking a hearing date for the court to consider the plan.

Under the Companies Act 2014, the court must consider a scheme of arrangement and decide whether to approve it.

The court heard that Revenue was considering whether to mount an objection to the scheme of arrangement.

Sally O’Neill, counsel for Revenue, said her client had engaged an expert as part of that consideration.

Responding to the judge’s suggestion that a confirmation hearing be held in September, Ms O’Neill said her understanding was the company is currently unable to support itself. In those circumstances, it is important that the matter is dealt with as soon as possible, to allow the rescue plan to take effect, or alternatively, start a winding down of the company, she said.

Barrister Diana Markina, for the company, said her client was supportive of the examiner’s application.

The judge made directions and said the case could return next week.