A supermarket company run by a man convicted of stealing £140,000 from a post office is heading for receivership after the High Court yesterday refused it protection.

Mr Justice Paul Gilligan refused an application by Maxworth Supermarkets to have the company placed in examinership.

The court heard that Maxworth has debts estimated at €5- €8 million and assets approaching €3 million. Maxworth runs supermarkets in Drogheda, Co Louth and Corduff in Dublin.

Examinership grants High Court protection to companies facing the possibility of insolvency to allow a court-appointed examiner to establish if it is possible to save the business. Four years ago, another of Maxworth's directors, Hugh Ferguson, was convicted of stealing £140,000 from a post office he managed in Enniskillen, Co Fermanagh. Lawyers for two of Maxworth's creditors, ADM Londis and ACCBank, who opposed the application, both referred to Mr Ferguson's criminal record in court yesterday.

Brian Kennedy, acting for the bank, told the court that Mr Ferguson did not inform ACC, as he should have, that he had been convicted of the crime when the company applied to it for a loan.

Refusing to place the company in examinership, Mr Justice Gilligan said he was not satisfied on the basis of the figures made available to him yesterday that there was a reasonable chance of Maxworth Supermarkets surviving as a going concern.

Mr Kennedy indicated that his client, which is owed €2.3 million, would seek to appoint a receiver to the business. Earlier he argued that this was the more equitable, cheaper and quicker option for the court.

He questioned figures indicating that the company might be saved, arguing that they could not be believed on the basis that the company had not kept accounts or records since July 2004.

Paul Binchy made the application on behalf of Maxworth Supermarkets and another director, Declan Madden. He said that both directors were willing to stand aside from the company to facilitate its rescue. They are also its shareholders.