Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

I thank the Deputies for raising this issue. As Minister with responsibility for employment, I am always concerned about any job losses. Indeed, job retention and creation has been my main focus since taking office.

The company referred to by the Deputies is in the middle of the examinership process and, as such, it is important that nothing be said here this evening that might affect the outcome of that process. It will be for the examiner to consult with creditors, potential investors and other relevant parties to devise the most appropriate course of action in the interests of the survival of the company and put that course of action to the court for approval. The court will have the final say and, until then, the company is under its protection. We must be careful to respect that.

Examinership is the main debt restructuring system for companies in Ireland and has been in existence since 1990. It allows for the rescue of companies which find themselves insolvent but have the potential to return to financial viability and continue in operation into the future. The key feature of the process is a period of court protection lasting up to 100 days during which nobody may institute proceedings against the company or petition for it to be wound up. The examiner uses this time to devise a scheme of arrangement in consultation with creditors, company management, potential investors and any other parties that will be affected by the scheme. The scheme of arrangement is put to the court and if the majority of the company's creditors and the court approves, it becomes binding on all of them.

In the case of Elverys Sports, I am informed that NAMA, in its role as a secured lender, approved the sale of assets of the parent company, Staunton Sports, to the management team following a process run by the directors of Staunton Sports through IBI Corporate Finance, acting under the duty of care to NAMA. However, the receivership event required to give effect to the transaction could not proceed at the agreed time because the management team did not have the requisite funding in place to complete. A higher bid was indicated by another party prior to the receiver's appointment and sale completion. The perspective receiver advised that, if appointed, he would be legally obliged to consider this bid, since he has a statutory obligation to secure the best price reasonably obtainable for the secured assets at the time of their sale.

Several press outlets have carried news of the third-party bid. The resulting uncertainty caused concern among suppliers and trade creditors, a situation which the directors of Staunton Sports brought to the attention of NAMA. Having regard to the deteriorating condition of the business and the company's insolvent position, and based on legal advice, NAMA put to the directors of Staunton Sports that examinership was an alternative option which would permit all bids to be considered while the company was under the protection of the High Court. It is on the public record that the appointment of an examiner to Elverys Sports was supported by the directors of the company. The decision to seek the protection of the court through examinership was taken in order to protect the company and its employees, and NAMA is funding the company during the examinership process.

It is understood that the examiner is currently in the process of engaging with various parties who have expressed an interest in the business, including the management team. As part of this process, the examiner has requested proposals from each of the parties regarding their plans for the business and for the employees of the company. The examiner has not yet concluded this process.

I believe examinership is a good option for companies that have real prospects for the future, but find themselves in financial difficulty at present. I should say that the examiner in this instance has already gone to the court and made a presentation to the effect that this company has a prospect of viability. He has convinced the court of the prospect of viability and the court has provided for a 100-day extension. That is an important first step that has to be taken. The company has done that. The balanced procedure that has to be followed in these cases takes account of the interests of the ailing company and the rights of its creditors and gives the courts a role in ensuring there is a fair and appropriate outcome.

Of course there have been some criticisms of the costs associated with the examinership process. For that reason, the Oireachtas passed the Companies (Miscellaneous Provisions) Bill 2013 late last year. This legislation allows small private companies to apply for examinership in the Circuit Court, rather than having to go directly to the High Court. I hope this will make examinership an option for more companies in the future. In the meantime, I am keeping the law on examinership under review. I am keen to identify whether there are other ways of making examinership less costly.

The specific issue of terms and conditions, which was raised by Deputy Joan Collins, is governed by the TUPE legislation. The TUPE obligations will apply in the event of the company being sold as a going concern. This means the current terms and conditions will continue to apply when the new owner is in place. I think I have responded to the other issues that were raised by Deputies.

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