Scrumdiddly’s has seen off an attempt to block a rescue plan to save the company and its outlets from financial meltdown, a judge has heard.
Barrister Keith Farry told Judge John O’Connor in the Circuit Civil Court that the company, which had faced the prospect of liquidation due to an inability to pay its debts, was now on the road to recovery after a new investor had been found.
The court had been dealing with an objection to the rescue plan by the company’s landlord. He had been facing mounting rent arrears and had not been invited to a meeting of creditors to consider the financial recovery plan.
Ciaran Mandal, counsel for landlord Matthew Dockrell, of Burrow Road, Portrane, Co Dublin, told the judge that possession proceedings to eject the company from its headquarters in Donabate, Co Dublin, could now be struck out as a result of the overall acceptance of the rescue plan.
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It was one of the first cases dealt with under the Small Company Administrative Rescue Process (Scarp), which takes hundreds of small companies with financial difficulties out of the expensive and drawn out Companies Act examinership system that previously dragged through the courts system.
The case entered the court system due to repossession proceedings by the landlord.
Scrumdiddly’s opened its first store in Donabate in 2012. More recently, it opened pop-up locations in five Penneys’ stores and a new stand-alone store in Charlestown Shopping Centre. David O’Connor, a partner in BDO Ireland, who had been appointed process adviser under Scarp, said Scrumdiddly’s had invested heavily in the pop-up stores but rewards had never matched its investment.
A store had also opened in Galway just before the Covid-19 pandemic hit company trade.
In 2022, the Revenue Commissioners sought payment of €92,000 tax liabilities that had been warehoused. When this was examined, the company found its warehoused debt was closer to €300,000.
Barrister Arthur Cunningham, counsel for the Revenue, told the judge that his client was now supporting the rescue plan which was adjourned for mention in September.
The success of the rescue plan will bring relief to the almost 40 staff in Scrumdiddly’s outlets in Kilkenny, Finglas, Swords, Donabate, Galway and Dún Laoghaire.
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