Galway businessman Pat McDonagh has written off more than €15 million from the books of his fast food empire Supermac's after a disastrous foray into the US market.
Mr McDonagh is still contemplating the possible purchase of Claddagh Irish Pubs, a bankrupt firm whose financial troubles last year led to a legal dispute between its then chief executive Kevin Blair and Supermac's.
Accounts newly-filed by Supermac's Ireland Ltd for the past two years show that the firm returned to the black last year with pre-tax profits of €2.78 million after a loss of €4.55 million in 2005.
The business took an exceptional charge of €11.09 million in 2005 and a charge of €4.17 million in 2006 because of Claddagh's "adverse performance", the accounts said. "The company has initiated legal proceedings in the US to recover the debt."
Supermac's financial controller Ciarán Dillon said Claddagh's affairs were still subject to ongoing litigation but discussions were still under way on the purchase of Claddagh from a court-appointed trustee. "It's still on the cards but I'm not going to talk about Claddagh today," he said.
Claddagh, which has 17 outlets and almost 1,000 staff, went into bankruptcy protection last year after a dispute between Mr McDonagh and Mr Blair, a former operations manager at Supermac's main office in Galway.
The two men fell out over $21 million (€15 million) that Mr McDonagh gave Claddagh. He claimed it was a loan but Mr Blair claimed it was an investment.
Mr McDonagh prevailed in the legal battle when a Cincinnati court ordered Claddagh to repay the $21 million to him.
The court also ordered Mr Blair to pay $2 million in damages to Mr McDonagh. Mr Blair is appealing the ruling.
Mr Dillon said the Irish business performed well in 2006, with turnover on the rise to €27.31 million from €24.76 million in 2005.
"It was an exceptional year and indeed 2007 continues to hold the same line. We're up 10 per cent," he said.
The accounts for Supermac's Ireland reflect business in 25 company-owned restaurants. Business from more than 60 franchise restaurants is accounted elsewhere.
Mr Dillon said the turnover at all restaurants in the chain will be close to €100 million this year.
The company is in expansion mode, with new restaurants opening in Co Cork and Dublin. It opened a restaurant in Belfast in July, its first in the North.
