A High Court judge has approved a survival scheme for the Cara group of pharmacies which will see more than 150 jobs retained and more than €14 million invested in the group.
Mr Justice Denis McDonald said on Thursday he was satisfied the relevant statutory requirements were met for him to approve the scheme for 10 group companies, with the effect they will exit examinership on Monday.
The judge will issue a written judgment on a later date giving reasons for his decision. That will also address whether there should be disclosure of details of an employment termination agreement negotiated by two directors of the group, Ramona Nicholas, a former presenter of RTÉ's Dragons' Den, and her husband Canice Nicholas, with Renrew Ltd, which is investing more than €14 million in the group.
The couple have asked the court to keep the agreement details confidential.
The judge said he cannot give a commitment concerning confidentiality until he has examined the details of the agreement, which has been provided to the court at its request.
In approving the survival scheme, the judge praised the HSE for its efforts to allocate Community Pharmacy Contracts to the companies, and the Revenue for its pragmatic approach to issues, including providing a temporary tax clearance certificate, out of concerns about preserving employment.
He also praised the examiner, Ken Tyrrell of PwC, for the work involved in bringing the matter to a successful conclusion and saving a significant number of "very important" jobs.
Last September, the court confirmed the appointment of Mr Tyrrell as examiner following an earlier application by the group’s lender and largest creditor, Elm Corporate Credit.
Neil Steen SC, for the examiner, subsequently got court permission to negotiate and execute an investment agreement as part of a survival scheme. The court heard there had been 17 expressions of interest from potential investors.
On Thursday, Mr Steen outlined considerable work done by the examiner, the HSE and the Revenue in progressing the matter to the stage where the examiner could seek approval of the scheme.
He said creditors’ meetings took place on December 4th last and the agreement between the investor and Mr and Mrs Nicholas was also reached that day. The examiner was not involved in negotiating that as the survival proposals were not conditional on it and it did not involve any reduction in the investment for the companies, he said.
Satisfied
Rossa Fanning SC, for the investor, indicated his side is satisfied with a situation where CPC agreements being held by the HSE for the group will be signed once statutory declarations are made.
Mr Steen said Revenue issues had also been sorted out and the investor had agreed John Treacy should be appointed to the boards of directors of each of the companies.
Mr Steen said the examiner is grateful, especially to the Revenue, the HSE and the court for their help in achieving a very successful outcome under “less than ideal” circumstances.
The scheme preserved 150 jobs, more than €14 million investment had been secured and rent reductions had been agreed with landlords, counsel said. Secured creditors would be paid and dividends would be paid to unsecured creditors who would have got nothing in a winding up. Trade creditors have stuck with the companies, he added.
The judge, approving the scheme, noted Mr Fanning’s confirmation the investor was waiving its earlier condition that the investment was conditional on CPC agreements being in place.
He made orders confirming the scheme in the case of 10 companies in the group, excluding Cara Pharmacy Group Unlimited Company which he said had dropped out.
