The Mount Wolseley Hotel in Carlow, Ireland has exited examinership following an investment package worth EUR7.5m made by Brehon Capital.
This is the first successful provincial hotel examinership in the country and, according to the court appointed examiner Ian Lawlor, managing partner at JPA Brenson Lawlor accountants, this shows hotels can successfully restructure their operations within a three month time frame under the protection of the court.
He says this is an extremely valuable alternative to a receivership process that can often take a number of years to conclude and probably result in job losses and loss of goodwill.
Lawlor says: “A deal has been negotiated with Brehon Capital Partners backed by entrepreneur Emmet O’Neill, and they are investing a package worth EUR7.5 million into the hotel. It’s important to point out the recognition by the investors of the great goodwill and excellent brand reputation that the Morrissey family has built up in the business during the last 16 years they have run it.”
Mount Wolseley Resort is the largest employer in Carlow and attracts visitors from all over the country. A failure of the business would have been a huge blow to the local economy which has already been badly hit through business closures.
All creditors have received a dividend from the process for their outstanding debts. Had the hotel closed they were likely to have received nothing as in a receivership, most creditors receive nil.
Lawlor says: “It is my view as examiner that the successful conclusion of this process demonstrates that examinership can be an excellent tool for achieving a comprehensive financial restructuring in a short period of time. There is a very different dynamic when a receiver is appointed, something that can lead to a much greater degree of conflict during that process and which can sometimes unintentionally destroy a viable business.
“It has also been reported that the Bank of Ireland had strongly opposed, in the High Court, the appointment of an examiner last April. But again, following negotiation talks, I’m delighted that the bank has reversed its position and is now fully supporting the examinership.”