Rathwood, the Co Carlow home and garden centre, is expected to agree a deal with an independent investor this week to avoid collapse, according to testimony in the High Court. The business, controlled by the Keogh family, entered examinership in late April facing liabilities of €18 million, including €10 million owed to trade creditors.
How will Rathwood resolve its €18 million debt?
The company’s survival depends on a pending investment proposal. Examiner Padraic Bermingham told the High Court on Wednesday that draft agreements have been issued and binding terms are anticipated by Thursday. Bermingham stated that the company’s survival is “singularly based” on securing this external investor, who is independent of management and shareholders but familiar with the business.
The financial scale of the crisis is significant. Provisional figures provided to the court show a total liability of €18 million. This includes:
- €10 million owed to trade creditors
- €2.5 million in customer deposits and vouchers
- €1.4 million owed to the Revenue Commissioners
What concerns did Judge Rory Mulcahy raise?
While Judge Rory Mulcahy extended court protection into July, he expressed a “basis for concern” regarding how the examinership has progressed. The judge specifically highlighted that the company accepted orders that may have been “contrary” to the trading controls established during the protection period.
Bermingham’s report admitted that staff accepted a “small number” of customer orders outside these controls, totaling less than €20,000. Barrister Keith Farry, representing the directors, stated he was instructed that the procedures allowing such trading have now ended.
Why is the Revenue Commissioners’ debt a critical issue?
The court heard that Rathwood failed to discharge certain debts owed to Revenue that accrued during the examinership period. This is a distinct issue from the initial €1.4 million liability. According to Bermingham, the company informed Revenue that these outstanding debts would be paid this week.
Judge Mulcahy also requested further information regarding the status of customers and those eligible for chargebacks, signaling a focus on consumer protection as the business seeks a rescue deal.
What happens if the investment deal fails?
The examiner’s report maintains that the company has a “reasonable prospect of survival,” but that prospect is tied entirely to the external investment. Without the binding terms expected this Thursday, the business lacks the internal capital to satisfy its €18 million in liabilities.
FAQ: Rathwood Examinership
Who owns Rathwood?
The business is controlled by the Keogh family, based in Tullow, Co Carlow.
What is the total amount Rathwood owes?
Provisional figures cited in court indicate total liabilities of €18 million.
When will the investment deal be finalized?
Examiner Padraic Bermingham anticipated the completion of binding terms on Thursday.
Share your thoughts: Do you think external investment is the only way for large family-run garden centres to survive current economic pressures? Let us know in the comments below or subscribe to our newsletter for more business updates.