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High Court Hears of Woodies DIY Plans for Atlantic
- 27 August 2012
Woodies DIY is prepared to invest in a plan aimed at securing the survival of the Atlantic Home Care DIY store chain, the High Court heard today. Mr Justice Paul McDermott was informed of the proposed investment after he agreed to extend the period of protection granted to the chain, part of the Grafton Group, from its creditors from 70 to 100 days.
Last June, the High Court appointed Mr Declan McDonald of PWC as interim examiner to Atlantic after the court heard that most of the chain's 13 stores were trading at a loss. Today the court heard the additional 30 days was being sought by the examiner so that he can finalise a scheme of arrangement, which if approved by the court, will allow the business exit examinership and continue to trade as a going concern.
Lawyers for Mr McDonald said there has been negotiations with landlords concern leases which had proven successful. Further applications may have to be brought in relation to repudiating leases on a number of the store premises.The court also heard that Woodies DIY are prepared to invest in Atlantic. That investment was subject to the examiner's proposed scheme being approved by all the relevant parties.
Mr Justice McDermott after agreeing to the extension adjourned the matter to a date next month. Last June Mr Justice Brian McGovern confirmed Mr McDonald as examiner after being satisfied from information provided to him that the company had a reasonable prospect of survival. The Judge was told that an independent accountant's report said that the company had a reasonable prospect of survival if a scheme was put in place. The scheme involved proposals including the closure of some of its stores and cutting staff numbers.
The plan also involved renegotiating with landlords about rents, which represented the largest liabilities and most of which were subject to "upward only" reviews. Examinership was sought by the directors of the company.
While having an accumulated loss of €21m for the last five years, the company had continued to trade with the support of other companies within the Grafton Group, in particular Woodies DIY, the court heard.
The company did not have cash flow issues.
Source: retailexcellence.ie - High Court Hears of Woodies DIY Plans for Atlantic
