Joe.ie parent has examiner appointed on petition of creditor

An interim examiner has been appointed by the High Court to digital media company Maximum Media.

Mr Justice Michael Quinn said on Friday he was satisfied to appoint Shane McCarthy, a partner in accountancy firm KPMG, as interim examiner to Maximum Media Network Ltd, which was incorporated as Joe Dotie Ltd but became MMN in February 2013 and employs 52 people.

The appointment was sought by Kelly Smith, for BPC Lending Ireland DAC of Molesworth St, Dublin, as a creditor of Maximum Media, which has registered offices at Distillery Building, Fumbally Lane, Dublin 8.

Maximum Media is the company behind the Joe.ie website. It also owns the SportsJoe, Her, and HerFamily platforms.

In court documents, BPC said that, under a 2018 loan agreement, it has advanced some €6.02 million to Maximum Media with monthly interests repayments of some €68,000. The current loan balance is €6.1 million, it said.

Maximum Media had entered the UK market in 2015 and commenced trading through a UK company also named Maximum Media Networks Ltd, which had since changed its name to Joe Media Ltd.

The €6.1 million loan is guaranteed by Joe Media Ltd, it said. That company also has significant solvency/financial issues and BPC had decided to seek to appoint an administrator to it as soon as possible, it added.

BPC said Maximum Media had failed to pay interest on its loan in March and April and in early April sought a capital and interest moratorium which BPC declined.

On May 12th, the company’s principal, Niall McGarry, sought a “standstill” for a couple of months, saying it could pay salaries or BPC but not both. BPC refused a standstill and contended that request as well as failures to meet interest repayments constituted events of default.

BPC said there were indications of “poor financial management” in Maximum Media, including the discovery of “numerous” payment plans with the sheriff in relation to overdue tax payments which had not previously been disclosed. It was also concerned about the handling of a November 2019 video detailing an instance where a company employee used a “click farm” to artificially inflate engagement numbers.

As a result of the click farm issue and a revenue shortfall in the fourth quarter of 2019, and following discussions with BPC, Maximum Media took various actions in late 2019, including mandating Deloitte to investigate a sales option for its business and the UK business, which had been isolated from events in Ireland.

The Irish company’s management team was also restructured.

BPC said that, arising from various factors, it had now decided to seek an interim examiner to Maximum Media so it would have court protection pending preparation of a scheme of arrangement. A combination of factors, including the click farm incident and “vastly reduced” revenue projections for 2020, had lead to that conclusion, it said.

BPC and an independent expert considered Maximum Media has a reasonable prospect of survival for reasons including its very significant following among its target demographics, with traffic on the company’s sites running at about 42 million a month.

The company had been profitable for a number of years until it began making losses in the years ending 2018 and 2019. While it remains loss-making, the ongoing cost restructuring programme has significantly reduced running costs such as salaries, it said.

BPC, a secured creditor, is supportive of the company and willing to fund working capital through the examinership period, it added.

The matter returns before the court in late May.