The High Court has approved a survival plan for the DIY chain Atlantic Homecare.
Mr Justice Sean Ryan today granted his approval to the scheme allowing the chain, which part of the Grafton Group, to exit examinership and continue to trade as a going concern.
The court was informed that under the scheme, fewer jobs will be lost and fewer stores closed by Atlantic Homecare than had been originally feared, and more than €5.7 million in fresh investment has been secured.
The court also heard all of the chain's creditors were in favour of the scheme and there were no objections to the proposals.
Last June, the court appointed Mr Declan McDonald of PWC as interim examiner to Atlantic after he was told most of the chain's 13 stores were trading at a loss.
Examinership was sought by the directors of the company. While having an accumulated loss of €21m for the last five years, the company had continued to trade with the support of other companies within the Grafton Group, in particular Woodies DIY, the court heard. The company did not have cash flow issues.
Today, counsel for the examiner Bernard Dunleavy told the court that the examinership process had resulted in a better outcome than had been originally anticipated. It had been proposed to shut five stores, however under the scheme before the court only two stores in the group, Limerick and Newbridge in Co Kildare, will close. It had employed 348 people in 13 stores nationwide.
There will be 44 redundancies, 70 fewer than initially proposed. In addition, counsel said that all classes of the chain's creditors had voted in favour of the plan.
The court also heard that Woodies DIY are prepared to invest a sum of €5.7m in Atlantic Homecare.
The chain's difficulties, counsel said, were mainly due to the deterioration of the economy, high rents and because its staffing levels were more reflective of boom times in the DIY sector rather than in a recession.
The examiner had also negotiated with landlords about rents, which represented the chain's largest liabilities.
The business had got the support of other companies in the Grafton Group, but eventually had to seek the protection of the courts and sought the appointment of an examiner.
Last June, the High Court confirmed Mr McDonald as examiner after being satisfied from information provided to him that the company had a reasonable prospect of survival.
An independent accountant's report said the company had a reasonable prospect of survival if a scheme was put in place.
In approving the scheme, Mr Justice Ryan said the plan was "perfectly reasonable." He noted creditors seemed to get more out of the scheme compared to other examinerships.
In the circumstances, the judge said had "no hesitation" in giving the court's approval for the scheme and fixed Friday, September 21st, as the date in which the chain will formally exit examinership.