Petition to have examiner appointed to company was not made in good faith

Application to confirm appointment of an examiner to the petitioning company - opposed by a substantial creditor - examiner was appointed on an interim basis to the company by order of the High Court on 18th August, 2016 - application to confirm his appointment as examiner is opposed by the limited liability company which owns the landlord’s interests in the occupational lease under which the company occupies the hotel and bar premises from which it conducts the entire of its business - company was incorporated in April 2006 - directors and shareholders are two brothers - company made losses for its first few years - returned to profit in 2013 - directors expect large profit in 2016 - not disputed that due to loans made by the company, it is insolvent - purchased the reversionary interest from a receiver by agreement made on 31st August, 2015 which was closed on 1st October, 2015 - the arrears of rent were said then to be in the region of €1m, and the landlord took the benefit of these arrears by separate assignment - purchase of the premises was funded by a loan from a US/Irish hedge fund, and the landlord’s indebtedness is in the region of 111% of the purchase price, the landlord having borrowed an additional €500,000 for the purposes of providing it with working capital in anticipation of taking over the business - almost immediately after closing the sale, and after correspondence with the solicitors then acting for the company had failed to achieve an agreement regarding the arrears, the landlord served a forfeiture notice on 21st October, 2015, in reliance on the arrears of rent, and sought to re-enter the premises on foot of the notice - company obtained an ex parte injunction restraining the landlord from taking possession on foot of the forfeiture notice - agreement contained an acknowledgement by the company that the passing rent was the annual amount of €520,000 and a figure for arrears - included was a provision that the landlord could forthwith, upon the happening of any default, enter judgment against the directors of the company in the amount of €730,000 - primary argument advanced by the landlord in opposition to the application to confirm the appointment of the examiner is that the presentation of the petition was an abuse of process in that it is an attempt by the company and/or its directors to avoid the obligations arising under the settlement entered into only three weeks prior to presentation of the petition - landlord asserts that the company has been in profit only because it did not pay the full amount of the reserved rent under the lease for any of the relevant years - an independent report was prepared pursuant to s. 511 of the Companies Act 2014 - it stated that the company had a reasonable prospect of survival but under certain conditions - these included an immediate renegotiation of repayment basis of the settlement arrangement with the landlord, securing of additional finance to meet the cash flow requirements of the company in meeting the renegotiated schedule and the acceptance of an appropriate scheme of arrangement by creditors in the approval of the High Court - an expert engaged by the landlord expressed the view that the condition requiring funding cannot be met and that the figure required to be raised of €1.7 million is far outside the capacity of the company in all the circumstances - Court felt that affidavit evidence points in my view to the company not being in a position to meet the terms of settlement negotiated on 19th July, 2016 - company has little to offer in the way of fixed security - petition dismissed as it was not made in good faith.