A COURT HAS granted an order that Iceland Foods Ltd (Iceland UK) be awarded costs by Metron Stores Ltd, the parent company for the Irish stores, for costs incurred due to the examinership application brought.
Discount retailer Iceland closed its final stores in Ireland yesterday after Metron Stores Ltd entered into liquidation.
Iceland stores in Blanchardstown, Portlaoise, Fingal, Limerick and Shannon closed unexpectedly, with staff reportedly being given as little as 15 minutes notice.
The future of the company’s Irish stores had been rooted in uncertainty in recent months, with an examiner appointed in June to rescue the Ireland franchise’s stores from going under.
During hearings with the examiner, the High Court was told that the company was insolvent and unable to pay debts of about €36 million.
It also heard that approximately 150 staff are seeking payment of wages, holiday pay and redundancy pay.
The closures mark the end of attempts to save the company. There had been discussions with an unrevealed investor, believed to be Tesco Ireland, but they broke down this week.
On Thursday, Mr Justice Quinn was informed that the proposed investor had pulled out of the process, with the result that there was no reality of a scheme being put together that would save the business.
Lawyers for the examiner said that their clients had no choice other than ask the judge to bring the company’s period of protection from its creditors to an end and place Metron into liquidation.
In court today, Shelley Horan BL for Iceland Foods Ltd (Iceland UK) said her clients were seeking costs against the Metron Stores Ltd on the basis that by instituting an application last Friday, it created a situation whereby her client had to incur costs in defending that application.
At a hearing of the examiner on 21 August, Metron Stores alleged in court that Iceland UK ‘swept away’ assets – including sums of money from bank accounts – ahead of the transfer of ownership.
The Journal understands that Metron had intended to appear in court today after filing a request on 1 September for a hearing “to consider evidence in relation to the substantial disappearance of company property in February 2023″.
Horan told Justice Quinn today that Iceland UK’s affidavit before the court today fully rebuts any such allegations made by Metron Stores Ltd.
She said a huge amount of work had been done to compile 2,000 invoices that “corroborate the payments” after Metron’s affidavit – which was in excess of 50 paragraphs and had 20 exhibits – was delivered to its offices this week.
“Essentially all those payments were in respect of trade creditors of the company,” she said.
“There was an agreement with Mr Maniar [Naeem Maniar, the controlling shareholder of Metron Stores Ltd] as part of the share purchase that Iceland UK would discharge those debts before the completion date of the share purchase and Mr Maniar was fully aware of that and the movement of funds,” she told the court today.
Horan said this application was brought on day 81 of the examinership, stating that her client has “serious concerns about the motive of Mr Maniar in bringing that application”.
She said Iceland UK’s affidavit makes reference to how “it seems to be a retaliation response to the request to demand for monies to be paid against the company”.
“We say in the affidavit essentially that the application was brought in bad faith, the allegations are untrue, we have brought forward significant evidence to rebut those allegations. We are very concerned that an application was brought in the manner that it was,” Horan said, stating it risked the “destabilising” of the examinership.
“So it is under those circumstances, my client wants costs brought against the company,” she said.
Justice Quinn granted an order for costs against Metron Stores Ltd. Mr Maniar was not represented in court.
In addition, Kelley Smith, senior counsel for the liquidator, told the court that landlords of eight stores were emailed yesterday to inform them of liquidation proceedings being held today.
Justice Quinn said it was “curious” that only two were represented in court today, with the landlord for the store in Galway having representation in seeking costs, as well as a letter being submitted to the court seeking costs on behalf of the store in Carlow.
The judge said he would make orders for those that applied and granted the costs applications made on behalf of the landlords for the Galway and Carlow stores.
Geraldine Chambers, a worker from the Iceland store in Tallaght, who was present in the court today told The Journal after proceedings: “It’s a joke, they just came in and closed us down, no notice.”
She said the shutters were just pulled down and workers were “treated like dirt”.
Chambers said she has applied for redundancy so she awaits to hear if that will be approved.
In a statement to The Journal after the proceedings, Metron Stores Ltd said, “The company is really disappointed that the investor has pulled out of the proposed investment to save the Iceland stores.
“As the examiner has outlined, the investor was a significant retailer with a nationwide footprint of stores in Ireland and therefore there was a prospect of saving over 150 jobs. Furthermore, the investor was prepared to offer new opportunities to staff in the stores that were being closed.
“This would have been a very good outcome for all of the employees and would have resulted in a successful outcome of the examinership. A huge amount of work and effort was put in by everyone including the examiner’s office and the investor and the company to ensure a successful outcome was achieved.
“It is sad that the investment did not proceed and the company empathises with all of those who have lost their jobs. On behalf of Metron, we would like to unreservedly apologise to all Iceland employees and all other stakeholders in the difficult situation everyone found themselves over the past few months.
“We would also like to thank the Examiners office and everyone, including the Investor and the State Authorities who have worked diligently seven days a week over the past few months to save the company.”
Metron believes that the occupation of the Talbot Street store was key to the investor pulling out of the deal, but that claim was not heard in court. However, The Journal understands that vacant possession was required by Tesco for the deal to go ahead.
Sinn Féin spokesperson on Enterprise, Trade, and Employment Committee, Louise O’Reilly TD, said monies owed to Iceland workers must be prioritised as the company moves from examinership to liquidation.
O’Reilly said, “This is the culmination of what has been a tumultuous period for Iceland, and especially for the workers”, adding that news of the liquidation yesterday came as a “crushing blow” for workers and their families.
“These issues at Iceland compelled us to write to the Corporate Enforcement Authority seeking an investigation of any potential breaches of company law. An investigation is only more pressing now that the company has entered liquidation,” she said.
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