The landmark G Hotel and adjoining Eye Cinema in Galway have been placed in examinership days after Deutsche Bank had a receiver appointed to the properties owned by high-profile developer Gerry Barrett.
In an affidavit filed to the High Court on Tuesday, Mr Barrett applied for the appointment of an examiner after receiver KPMG had been dispatched to the five-star hotel on the edge of Lough Atalia days earlier.
Following the High Court’s appointment of Neil Hughes as examiner, the hotel and cinema have been granted the protection of the court for a period of 100 days, during which time the receiver can take no action.
Mr Barrett said he received a telephone call at 1.50pm on August 18th from Maura O’Donnell, the general manager of the hotel. He received a further telephone call from Ciara Newcombe, the accounts manager of Style City, which operates Eye Cinema.
"Both parties informed me that representatives of KPMG had arrived at the premises of Eye Cinema and the hotel," said Mr Barrett, "Ms O'Donnell informed me that Choice Hotels had arrived on site at the hotel and informed her they were there to run the operation of the hotel.
“I immediately left my office in Edward Square, Galway city, to go to the hotel. When I arrived at the hotel, three meeting rooms were being occupied by the receiver and his appointed operators for the hotel and Eye Cinema.”
Mr Barrett told the court that a wedding was under way at the hotel on the day in question, and that KPMG had five representatives on site in addition to 10 more individuals who were dispatched by Choice Hotels.
“Strong concerns were expressed across the hotel management team that the receiver wanted to interrupt staff that were looking after a wedding of 163 guests,” he said. “I asked if KPMG would hold off until later in the day when the wedding guests were settled. However, this request was not entertained.”
Wedding day
Mr Barrett went on to say that a wedding fair had been due to take place at the hotel the following day, and that appeals to the receiver in relation to the adverse effect that negative publicity would have on wedding bookings were ignored.
“KPMG requested a creditors’ listing from the hotel accountant and proceeded to contact creditors to notify them of the appointment of the receiver to the hotel,” he said. “KPMG informed the creditors that they could not guarantee all invoices would be paid in full.
“I say that this is of great concern, in particular as this is the busiest time of the year for the hotel, and the hotel does not want to be in a position where suppliers are refusing supply.”
Mr Barrett said he also made the case that the developments would have a “detrimental effect” on the supply of goods to Hotel Meyrick, a sister property of the hotel in Eyre Square.
“Another concerning development is that Choice Hotels wants to immediately start contacting clients who have booked weddings with the hotel to inform them of the appointment of the receiver,” he said.
“This is of huge concern, and I believe such correspondence should come from the existing hotel sales team, who can try to reassure clients and ensure bookings are not lost to a competitor hotel.”
Deep concern
Mr Barrett also expressed “deep concern” to the court that Eye Cinema’s “main rival” in Galway city, IMC Cinemas, had been appointed operators of the business.
“I am of the belief that it will not take IMC Cinemas long to ascertain the procedures and business skills that make Eye Cinema the most successful cinema in Galway,” he said.
“I am of the view that this cannot continue over the full weekend, as this would enable the intellectual property of Eye Cinema to be removed to its competitor, which would undeniably be most destructive to Eye Cinema.
“Overall, the experience this afternoon has been deeply concerning, particularly in terms of the choice of operators chosen by KPMG. I sincerely feel that this development will have a negative impact on future business.”
The latest accounts filed with the Companies Office show profits at ML Meyrick, the parent company of the two businesses, fell from €1.5 million at the end of 2014 to just €144,176 a year later.
