A NUMBER of people have expressed interest in investing in O’Brien’s sandwich bar chain, the High Court was told yesterday when it confirmed the appointment of an examiner to the company.
O’Brien’s Irish Sandwich Bars Ltd employs 20 people directly and 800 indirectly in 85 franchised outlets in Ireland. It has 220 outlets in 13 countries worldwide.
The court heard yesterday there were nine “expressions of interest” in the company since an interim examiner was appointed two weeks ago. It now needed “surgery” in which a number of “non-performing” outlets would be shut along with the proposed repudiation of “onerous leases” on other stores, the court was told.
The majority of franchisees are supportive of the examinership process, while eight to 10 of the landlords involved had already orally agreed to reduce rents, Rossa Fanning, for the company, whose directors are Brody Sweeney and Mark O’Neill, told the court yesterday.
An independent accountant has advised the company could operate as a going concern if certain measures were implemented, Mr Fanning said. There would be a deficiency of some €4.1 million to creditors at the moment and this would increase to €6.3 million if the company was wound up.
Mr Fanning said the company was responsible for a rent-roll of €483,000 per annum for 10 stores which were vacant, while there were another nine “non-performing” leases in arrears.
Much of the company’s troubles was due to the downturn in the economy, the court heard.
Brian Kennedy, for the examiner, said there was ongoing contact with major suppliers and with the franchisees so the company could continue to operate as a going concern. The independent accountant had received nine expressions of interest from potential investors.
Bank of Ireland, which is owed €3.4 million of the company’s €4 million debt, supported the examinership process, Mr Kennedy added. Negotiations with major trade creditors as well as franchisees were ongoing and the company’s cash flow position meant it would be able to meet its liabilities during examinership.
Counsel representing Lindat Ltd, which has secured a judgment for some €102,000 against the company, and a landlord creditor, Airscape Ltd, opposed examinership and expressed concern at the threat to repudiate leases.
The Revenue Commissioners were neutral on the application to confirm examinership, as were a firm of lawyers owed legal fees, the court heard.
Mr Justice Brian McGovern confirmed Paul McCann of Grant Thornton as examiner and directed the examiner report back to the court on September 4th.