Interim examiner appointed to Cornstore and Coqbull restaurants in Cork and Limerick

AN interim examiner has been appointed by the High Court to several related companies that operate a number of well-known restaurants in Limerick and Cork that employ more than 200 people.

The application for the protection of the courts was made in relation to firms behind the award-winning Cornstore Restaurants in Cork and Limerick.

They also operate the casual-dining Coqbull restaurants, which are based in Limerick, Castletroy, and Cork.

The application to appoint an examiner was made after the group's main creditors the Swedish-based Proventus Capital Partners III KB fund appointed receivers over certain assets of businesses after its demand for payment of approximately €26.74m of the related companies debts was not made.

The companies seeking the appointment of an Examiner are Keep it Real Holdings DAC, Rosewalk Ltd, Coal Quay Restaurants Ltd, Winstore Restaurants Ltd, Burgerchick Cork Limited, Burgerchick Limerick Ltd, and Burgerchick Casteltroy Ltd.

The court heard that companies had been controlled by husband and wife Patrick and Linda Frawley, who are well known in the hospitality sector.

On Tuesday evening, Ms Justice Eileen Roberts said she was satisfied to appoint insolvency practitioner Mr Joesph Walsh of JW Accountants as interim examiner to the companies.

The judge said that it was accepted that the companies are currently insolvent and unable to pay their debts.

Marylebone Taverns Limited, which is a company owned by Mr Frawley petitioned the court seeking to have an examiner appointed to the seven companies.

Ross Gorman, for Marylebone, said that despite the firms' difficulties an Independent Expert's report, compiled by Cormac Mohan of FM Accountants, had stated that the businesses have a reasonable prospect of survival as a going concern if certain steps are taken.

In his report Mr Mohan said that the appointment of an examiner who would put together a scheme of arrangement with the creditors could see the businesses, which have been running for a long number of years and have been largely profitable and are well-run, survive as going concerns.

Counsel said that Mr Mohan had also stated in his report that the companies will also need additional investment.

Counsel said that there has already been one expression of interest from a potential investor, who has a long track record in the Irish hospitality sector.

Mr Gorman told the court that the source of the companies difficulties was the performance of other related companies in the group based in Britain.

Counsel said the group had entered into an arrangement with the Swedish-based fund to re-finance loans it had taken out for purposes including acquiring businesses in Britain.

The group's restaurants had also been badly hit by covid-19.

The British companies, which are not seeking the protection of the courts, fared worst of all during the pandemic, counsel said.

This was due to the fact the government supports in Ireland for businesses were far better than those on offer in Britain, counsel said.

The group's Irish businesses have been generally profitable and had been trying to service the debt of the related British restaurants.

Counsel said unfortunately the group has not been able to service the debt owed to the fund since December of 2022, and it was accepted that the entities were in default of the repayment obligations.

The parties had been working with each other to try and resolve the issues between them.

However, earlier this month, the fund sought repayments of £19m and €4.9m.

When this was not paid the fund appointed joint receivers over the shares of some of the companies seeking protection.

The joint receivers, who were put in place last Friday, also appointed new directors and secretaries to those companies, counsel said.

While the restaurants continue to trade, counsel said that the change of operators of the companies was of concern to his clients.

As a result counsel said that his side was seeking Mr Walsh's appointment, on an ex-parte basis, as well as orders requiring the joint receivers to cease acting and to hand back books and records relating to the firms.

Ms Justice Roberts said that she was prepared to appoint Mr Walsh on an interim basis.

However, the court was not prepared to make an order against the receivers at this stage of the proceedings.

The matter was adjourned to a date later this month, but the judge said the applicant could return to court before then should the need arise.