Thursday 17 April 2014 16.31
Bank of Ireland is owed about half of the resort’s overall debt
Mount Wolseley Hotel and Golf Resort, which owes various banks €60m, has asked the High Court for protection from its creditors long enough to put a rescue plan in place and save up to 175 jobs.
The High Court was told that the Tullow, Co Carlow, resort is currently worth only €5m to €6.5m.
The Morrisey family, which owns the resort, asked Mr Justice David Keane to appoint insolvency practitioner Ian Lawlor as Examiner to run and hopefully save the business as a going concern.
The resort is a popular wedding venue and comprises a 143-room hotel together with holiday homes, a leisure centre, spa and an 18 hole golf course designed by former Ryder Cup hero Christy O’Connor Jnr.
Bank of Ireland, which is owed about €28m by the resort’s owners, has opposed the application, claiming the Examinership process has no reasonable prospect of securing the investment required to succeed.
BOI wants to appoint a receiver to sell the business.
Barrister Rossa Fanning, counsel for the bank, told the court that the application was an attempt by the Morrissey family ” to sabotage” the bank’s bid to appoint a receiver.
The judge is to rule on the application later this month.
Judge Keane heard that the resort owes various banks more than €60m, most of which had been borrowed during the Celtic Tiger era.
Property valuation experts estimated the resort as currently worth at most €6.5m.
Bernard Dunleavy, counsel for prospective examiner, said Mr Lawlor had received eight expressions of interest from potential investors, none of whom had any connection with the current owners.
Mr Lawlor, of JPA Brenson Lawlor, was appointed interim examiner in early April to the resort company and two related companies Lismare Enterprises and LIsmare Properties.
The court heard the companies are ultimately owned by members of the Morrissey family.
Gary McCarthy, counsel for the Morrissey family, said an independent accountant’s report stated the resort had a reasonable prospect of surviving as a going concern if certain steps were taken.
These steps included the securing of additional investment and that an examiner be appointed in order to put together a scheme of arrangement with the resort’s creditors.
He said the owners had planned to cover borrowings by selling houses built on the resort but this plan had been hit by the collapse of the property market.
Mr McCarthy said that the Morrissey family had reached accommodation with the other banks in relation to servicing the company’s debts but issues remained with BOI.
Early last month BOI had demanded repayment of €28.3m and when the demand had not been met the bank had appointed a receiver to the resort.
The owners had then applied for an examiner to be appointed. Counsel said the resort’s creditors would do much better in an examinership compared to a receivership. The receiver would sell off the company’s assets.
Mr McCarthy said BOI did not have a charge over Mount Wolseley House, “the jewel in the resorts crown.” It was located at the centre of the resort and is owned by the Morrisseys.
The hotel would not be able to use it in the event a receiver was appointed.
In opposing the application Rossa Fanning, for BOI, said the resort would not be able to secure the level of investment required to repay the bank debt.
He said BOI decided to appoint a eeceiver after negotiations with the owners over a two year period had failed to bear any fruit.
Mr Fanning said the application for examinership was an attempt by the Morrissey’s to give them “a commercial advantage” in its dealings with the BOI. This amounted to “a technical abuse of process,” He said.
He said the court should not confirm Mr Lawlor as examiner and the bank should be allowed appoint a receiver who would continue to operate the resort as normal until a buyer could be found.
If appointed later this month the examiner will have up to 100 days to put together a scheme of arrangement with the resort’s creditors that will allow the company to continue to trade as a going concern.
Judge Keane said he would give his judgment at a sitting of the High Court in Cork on 29 April next.
Until then the interim examiner was to remain in place and the resort remain under the control of its existing management.