The High Court will approve a survival scheme for the Cara group of pharmacies in the new year providing certain additional information is provided.
Mr Justice Denis McDonald indicated on Friday that the court would approve an examiner’s scheme of arrangement for the group whose controlling shareholders are former RTÉ Dragons’ Den presenter Ramona Nicholas and her husband Canice Nicholas.
However, he said he first wanted a supplemental report to the one already provided by examiner Ken Tyrell outlining proposals for restructuring and a €14.1 million new investment in the group which has 13 stores mainly in the northeast.
The judge did so after he was furnished with a confidential agreement between the Nicholas directors, including concerning their employment, and the main creditor Elm Corporate Credit which is owed €14 million.
Mr and Mrs Nicholas had initially opposed the appointment of the examiner but now supported it, the court heard. The group, involving a dozen related companies, suffered pretax losses of some €4.6 million between 2016 and 2019.
The judge expressed concern, after reading the couple’s agreement with Elm Corporate, that the court had not been provided with the full picture in the examiner’s main report. There was a duty on the examiner to do so and on the court to ensure the highest standards are adhered to.
Neil Steen SC, for the examiner, said he wanted to assure the judge there was no intention to mislead and he could only apologise that full information was not before the court.
Community pharmacy agreement
The judge said he would need a supplemental report from the examiner before he makes a final order in January. This would also allow for the completion of Cara’s application for approval for participation in the HSE’s community pharmacy agreement programme.
Earlier, Mr Steen said the survival plan involves a €14.1 million investment from an investor who was independent of previous shareholders. It also involves the surrendering of at least one retail outlet lease while the remainder will continue on reduced rents negotiated with the landlords.
The plan will involve a restructuring of its historical debt and ensure the survival of 141 jobs in the stores, said counsel.
Lawyers for the main creditor, the company itself, and HSE supported the plan. Revenue, which is owed €400,000, had initially opposed it but following engagement with the examiner the court heard it was no longer opposed.
The court heard the examinership no longer involves the Cara Pharmacy Group Unlimited Company after the judge was told this was just a holding company and not involved in trading.
