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An interim examiner has been appointed for the Cara drugstore chain, controlled by Dragon’s Den star Ramona Nicholas and her husband Canice.
lm Corporate Credit, which is owed € 14 million and petitioned the High Court for examination, said the chain, with 13 outlets, has been in “continuous decline” since 2018. It said it was looking to be appoint an examiner to protect nearly 170 jobs at the pharmaceutical company.
Ms. Nicholas and her husband, based in Dungannon in Co Tyrone, objected to the request for an interim examiner to be appointed for their business, which was founded in 2002.
The group’s business includes pharmacies and Abbey Healthcare, a company that provides prescription drugs to nursing homes, long-term care facilities and hospitals. The HSE is its main customer.
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Ramona and Canice Nicholas oppose the request
James Connolly / PicSell8
Elm Corporate Credit is a loan fund controlled by DunPort Capital, based in Dublin.
“Elm Corporate Credit, as Cara Pharmacy’s largest creditor, today petitioned the Superior Court to appoint an interim examiner for the company to protect the business as a going concern and preserve the jobs of 170 employees,” said Elm Court. it’s a statement. “The Superior Court has considered the petition and appointed Ken Tyrell of PWC as interim examiner.”
The finance firm said so, and DunPort Capital had “sought to constructively assist and support” Cara and her directors in addressing a “variety of issues that were contributing to the poor performance of the business.
“However, business performance continued to deteriorate throughout 2019 and into 2020,” he added.
An independent review by KPMG earlier this year concluded that Cara’s financial situation was “very vulnerable”, with the Covid-19 pandemic exacerbating her difficulties.
The Superior Court heard that Cara stopped marketing at three outlets in the past 14 months. He had also planned to sell a warehouse in Ballyshannon, Co Donegal, but the proposed sale was not completed.
The pharmaceutical part of the Cara business generated a turnover of about 6.7 million euros in the six months to the end of June this year, while the Abbey Healthcare business generated 4.5 million euros.
The High Court petition noted that the pharmacy group’s difficulties had been caused by “the challenging retail business environment, deficiencies with respect to stock control and an unsustainable cost base.”
“The group has had trouble increasing sales within its retail division and meeting payments owed to commercial creditors, rents owed to owners, and fees owed to local authorities,” he added.
In addition to appearing on the RTE version of Dragons’ Den, Ms. Nicholas (43) also appeared on their show ‘Secret Millionaire’.
She has been a high-profile public figure, speaking in interviews about having her second child, and last year she told the Irish Independent how growing up on a farm in Co Tyrone, she always knew she wanted to be a pharmacist.
“I was lucky,” he said. “From the age of 11 I knew that I wanted to be a pharmacist. I don’t know if it is because I loved the smell of the pharmacies or if it was the idea of having a store ”.
She added: “I love being a pharmacist, but really what I love now is the retail side.”
The group’s attorney Aillil O’Reilly today asked the Superior Court to defer Elm’s request for the appointment of an interim examiner for the group.
He said directors were very concerned about the impact an examiner appointment would have on employees and the communities they serve, as well as their own professional reputation.
The company also said that Elm’s negative description of the group’s financial system was exaggerated.
In Superior Court, Judge Mark Heslin said he was pleased to appoint PWC’s experienced insolvency physician Ken Tyrell as interim examiner for Cara Pharmacy Unlimited and a dozen related companies.
The court was not prepared to defer the request for the appointment of an interim examiner.
Noting the objections raised by the company, the judge said his decision “in no way impugns” the reputation, skills and professionalism of the director.
The judge said that an independent expert’s report indicated that the group, which operates 13 pharmacies and provides prescriptions to nursing homes, has a reasonable prospect of success if certain steps are taken.
Those steps include restructuring the business, a new investment in the group, and court approval of a settlement scheme drawn up by an examiner with the group’s creditors.
Appointing an examiner, Fanning said, is in the best interest of all stakeholders, including the 160 employees. Two parties are interested in investing in the group, the lawyer said.
The attorney said Elm was willing to provide sufficient funds during the examination period on terms that included such money being certified by the examiner.
The lawyer added that earlier this year the pharmacy group failed to make scheduled payments to Elm totaling € 360,000.
Elm asked the group for proposals for reimbursement for its facilities, but has not received any.
Elm was concerned about the lack of explanations for items that included a € 83,000 directors loan made when the group had cash flow problems, a € 100,000 payment to someone outside the group, and more than 37 check payments totaling € 804,000.
The attorney said that while it was understandable that entrepreneurs like directors resisted appointing an examiner for their business, he hoped that they would not ultimately oppose the examination request.
The prospect of being examined was brought up to the group long before the court hearing, the lawyer added.
The lawyer said that, given the group’s financial situation, any objection to the appointment of an examiner was “unrealistic” and compared it to “King Canute telling the sea to return.”
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