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Nursing home goes into examinership over fears vulture fund may seek to put it into receivership

The company is clearly insolvent and unable to pay its debts as they fall due, the judge said.

Image: Shutterstock/Impact Photography

THE HIGH COURT has appointed an interim examiner to a nursing home with 74 elderly residents and 87 employees.  

The court heard that the nursing home sought the protection of the courts from its creditors over fears that “a vulture fund” which is owed more than €6m by the business, may appoint a receiver over the facility.  

On Friday Mr Justice Bernard Barton appointed insolvency practitioner Mr Jim Stafford of Freil Stafford as interim examiner to Melbourne Health Care Ltd, which trades under the name of Our Lady of Lourdes Care Facility at Kilcummin, Killarney, Co Kerry. 

The company is clearly insolvent and unable to pay its debts as they fall due, the judge said.

The judge said he was satisfied to appoint Stafford as interim examiner as an independent expert’s report stated that the company has a reasonable prospect of survival if certain steps are taken.   

The steps include the putting together of a scheme of arrangement with the company’s creditors, and securing fresh investment which if successful would allow the company to continue to trade as a going concern. 

Seeking the appointment of the interim examiner Stephen Brady Bl for the company said that there was already a strong expression of interest in investing in the company’s business. 

The appointment of Mr Stafford, counsel said, would help secure the proposed investment, as well as reassure the facilities residents and staff.  

Counsel said that the while the company had been successful it was seeking the protection of the court over fears that financial fund Beltany Property Finance DAC, which in 2018 had acquired loans advanced to the company by KBC Bank, might appoint a receiver over the facility. 

When asked by Justice Barton if the application had been “triggered by a vulture fund,” counsel said that following discussions company had entered into a settlement agreement to pay €6.3 million to the fund by the end of October. 

Counsel said the wanted to be fair to the fund given that the application for an examiner was being made on an ex parte basis. 

The company had agreed that as part of the settlement agreement, which was arranged with Pepper Finance as the agent of Beltany, that some €300,000 would be paid by his client by the end of July.   

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Counsel said that his client was unable to pay that amount that due to a requirement from Kerry Co Council that it bring its premises up to the required fire safety standards.  

The cost of the fire safety works was approximately €100,000. Those works needed to be done immediately or the facility could be closed, counsel said. 

There had been correspondence about the issue with Beltany’s agents, but would not respond to the company’s request not to appoint a receiver if the full €300,000 was not paid on time, counsel said.  

This resulted in the company bringing a petition before the court seeking the appointment of an interim examiner.  

Counsel said that the going into examinership was the best option for the relevant parties and that if the firm went into liquidation it would cause upset to the elderly residents, and cost the state some €300,000 in redundancies payments. 

After appointing Mr Stafford and granting him certain powers Mr Justice Barton adjourned the matter to later this month.  

About the author:

Aodhan O Faolain

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