Fossett Brothers Circus has been given a chance of a new beginning by a judge in the Circuit Civil Court.
Circuit Court president Mr Justice Raymond Groarke yesterday approved a scheme of arrangement, aimed at saving the company, which was prepared by the examiner.
Mr Justice Groarke said he put trust in the company but asked for modifications on the arrangement.
He told barrister Ross Gorman, counsel for the company and its directors, that Robert and Edward Fossett should give an undertaking that they would resign as directors of the company for three years.
He also directed the Fossett brothers to give an undertaking that an accountant, who has recently been appointed by the company, would make returns to the Revenue Commissioners. The judge told Stephen Hannaphy, counsel for the examiner, that Donal Shiels, who has lent €15,000 to the company, and Dieter Hartfiel should be appointed as directors within the next week.
The judge said he understood the concerns of the Revenue, which objected to the proposed scheme, as the projected figures bore no reality to the way things turned out.
The court heard last week that the company owed the Revenue €333,000 including €181,000 VAT. Prior to the examinership having been put in place the Circuit Civil Court had been told the VAT debt was just €84,000.
“They hadn’t the cash to pay the VAT because they put the cash into running the business,” the judge said.
The judge had adjourned the matter until yesterday to allow the preparation of a proper corporate structure for the company.
Recognised name
Approving the scheme, he said the company has been in existence for 127 years and he had no doubt that the Fossett name was recognised and known by every child and adult in Ireland.
He said he could not ignore the fact that the Fossetts had managed to attract Mr Shiels and Mr Hartfiel and it showed some degree of confidence into the family business.
Arthur Cunningham, counsel for the Revenue, said the scheme envisaged an investment by the Fossetts of €38,000 and by Mr Shiels of €15,000 which, after the payment of litigation and examinership fees and other expenses, would leave only €21,000 cash available to the company to pay its debts as they became due.
He said the proposed scheme did not have a reasonable prospect of survival for the company. Next month the company’s liabilities would be €53,825 and total profits were estimated at €57,000. By April, liabilities would have risen by another €86,400 with an expected gross profit of €86,000, showing a loss of €400. Total overheads over the next few months would amount to €805,000.