THE SALE of Superquinn to Musgrave is set to proceed following the decision of the directors of the troubled retail chain to withdraw a petition to apply for examinership.
The court heard yesterday that five directors of Superquinn – Kieran Ryan, David Courtney, Terry Sweeney, Bernard Doyle and Jerry O’Reilly – were withdrawing the application as a result of Musgrave’s decision to establish a €10 million fund to reimburse certain creditors of the company.
The withdrawal of the petition for examinership means the acquisition of Superquinn by Musgrave is now in the hands of the Competition Authority. Under competition law, the authority has one month from the day of notification – July 22nd in this case – within which to complete the phase one review period, although this can be extended if the authority needs further information.
Following phase one, the authority can either announce its decision or can initiate a further full investigation. This must be completed within four months of the notification date, or from the date at which the authority had requested further information during phase one.
In a statement yesterday the directors of Superquinn said their intention in opposing the receivership was to secure a better outcome for suppliers.
“With the support fund in place, we now believe that the receivership process is in the best interests of our suppliers, colleagues and the many other partners of Superquinn, and are happy to support the process,” they said.
Lyndon MacCann SC, for Superquinn and some of the directors, told the court his clients had “nothing to gain personally” in seeking to having an examiner appointed to Superquinn. Counsel said they entered the process to ensure that employees and suppliers of the the company “were properly looked after”.
News of the settlement came as Ms Justice Mary Finlay Geoghegan was due to resume hearing a preliminary hearing on whether the petition to the court for appointment of an examiner was valid.
On Tuesday in the High Court, significant discrepancies emerged in the accounts given by Superquinn directors of a meeting that took place on the afternoon of Monday 18th July, with Kieran Ryan and David Courtney asserting that a formal decision to apply for examinership had been taken, and director Simon Cantrell rejecting this.
Yesterday’s announcement was broadly welcomed by supplier representative groups and unions.
“We look forward to working with the new owners with a view to sustaining the jobs and terms and conditions of our members into the future,” said Mandate’s assistant general secretary, Gerry Light, who met with Musgrave management last week.
Suppliers’ groups responded positively to the announcement of a €10 million fund which is being funded by Musgrave and indirectly through the banks, using money generated during the receivership.
While welcoming the establishment of the fund, Irish Farmers’ Association president John Bryan said the Superquinn receivership highlighted the need for a fundamental review of the credit term arrangements between supermarkets and suppliers.
Under the current system, suppliers are waiting a lengthy time for payment, he said. “Retailers have been hoarding vast amounts of cash while suppliers have to wait for payment of goods. This allows the supermarkets to earn substantial interest in the bank, but puts pressure on suppliers who have to meet their own bills.”
