The High Court refused a petition by New Look Retailers (Ireland) Ltd for the appointment of an examiner, finding that the application was premature while the company still had time to negotiate with its landlords.
Mr Justice Denis McDonald delivered the judgment on 14 October 2020. The company had sought protection under Part 10 of the Companies Act 2014, and an interim examiner had been appointed when the petition was presented on 28 August. Three landlords opposed the petition.
The judge found that the company’s centre of main interests was in Ireland, giving the Irish court jurisdiction to open main insolvency proceedings. He also concluded that the statutory condition concerning inability to pay debts was met: on the evidence, the company was likely to become unable to pay its debts at some point in the first half of 2021.
The financial evidence was disputed. The company’s independent expert forecast a cash deficit by March 2021, while a report commissioned by the opposing landlords projected that the company would remain solvent. The judge said the evidence did not establish that insolvency was likely by the end of March, but found a sufficient basis to conclude it was likely later in the first half of 2021. The company was not facing an immediate risk of having to stop trading, and its cash-flow forecast showed €11.2 million remaining at the end of a 14-week examinership period, with rent paid in full during that period.
The court’s decision turned on its discretion to appoint an examiner, which the judge said was not automatic even where statutory conditions were met. He considered examinership a serious intervention that restricts creditors’ rights. The company relied on its above-market rents and the need to restructure leases, but the judge found there was little evidence of serious engagement with landlords before the petition.
In particular, the judgment described unanswered requests for financial information and a lack of follow-up to proposals made during the months before the petition. The judge said the company had an available alternative: negotiate with landlords before asking the court to intervene. He refused the petition in the exercise of the court’s discretion. He did not decide the opposing landlords’ other arguments or whether an adverse finding should be made over the company’s original forecast of insolvency by October 2020; he said those issues were unnecessary to resolve.