THE HIGH Court has confirmed the appointment of an examiner to the Golden Disc music retail group, which has 20 stores around the State, including six franchised stores.

Ms Justice Mary Finlay Geoghegan said yesterday she was satisfied to appoint an examiner on foot of an independent accountant’s report expressing the view the group or part of it had a reasonable prospect of survival as a going concern, provided certain conditions are met.

The group has operated since 1968. The conditions of survival include realising sales targets, reducing costs, renegotiation of rents with landlords and the putting into place of a scheme of arrangement for creditors. Loss-making stores will also be closed.

The court heard Golden Discs was currently insolvent with liabilities of €9.5 million due to the downturn in sales, increased competition and significant rent increases across several stores, especially Dublin city centre stores. Talks in an effort to reduce rents had not proven successful to date.

The company was said to be able to meet its obligations during the examinership process, the court heard.

The judge confirmed the appointment of Michael McAteer of Grant Thornton as examiner.

He had previously been appointed interim examiner by the court on the application of Sony Music Entertainment, a creditor of the company. There was no objection to the confirmation of his appointment yesterday.

The judge told the parties that for any company in examinership, “time is of the essence” and any extension of court protection time by the court would “have to be fully justified”.

In applying earlier this month for examinership, Sony said it was owed some €1.38 million by Golden Discs and was not prepared to continue providing supplies in the absence of court protection.

Lyndon MacCann SC, for Sony, said yesterday his client believed, if certain measures were put into effect, including the closure of loss-making stores, that Golden Discs had a reasonable prospect of survival as a going concern.

Mr McCann said concern has recently been expressed [by Mr Justice Peter Kelly of the High Court] over the granting of court protection to companies. This concern was due to the unavailability of new investment in the current economic climate, but new investment was not what was required in order to ensure Golden Disc’s survival, he said. What it required was to undergo restructuring.

It is understood eight of the stores operated by the company are operating profitably, while four of the six franchised stores are also operating profitably.