Court hears 14 ‘credible’ expressions of interest in Joe.ie company
Posted on 27th May 2020 at 20:58
Examiner appointed to Maximum Media Network
The High Court has appointed an examiner to prepare a survival plan for a digital media company behind Joe.ie.
There have been 14 “credible” expressions of interest in the firm, the court was told on Wednesday.
Mr Justice Michael Quinn earlier this month appointed Shane McCarthy of KPMG as interim examiner to Maximum Media Network (MMN), which was incorporated as Joe Dotie Ltd but became MMN in February 2013.
It employs 51 people and ran into significant solvency/financial issues which led to BPC Lending Ireland, owed more than €6 million, seeking the appointment of an examiner.
On Wednesday, after hearing submissions on behalf of BPC Lending, the landlord of its premises, the interim examiner, the company itself and Revenue, the judge said he was satisfied to appoint Mr McCarthy as examiner to prepare a scheme of arrangement for the firm.
The appointment was sought by Kelly Smith, for BPC Lending, of Molesworth Street, Dublin 2, as a creditor of MMN, with registered offices at Distillery Building, Fumbally Lane, Dublin 8.
The court heard the €6 million debt to BPC Lending represents some two-thirds of the firm’s entire debt.
Revenue, owed €460,000, and the landlord, BCP Fund Management (not connected with BPC Lending) which says it is owed €187,000 in rent arrears, did not oppose the examinership as long as current liabilities to them are paid during the examinership.
Rossa Fanning SC, for BCP Fund Management, said in the light of promises to pay current rent during the term of the examinership, beginning this Friday with the payment of the May rent, his client was no longer opposing the examinership but was “very much reserving” its position. Counsel asked this be noted as part of the court order.
Gavin Simons, solicitor for the interim examiner, said there had been “14 expressions of interest from credible parties” in the company in the 10 days of the interim examinership.
BPC Lending, the petitioner, had agreed to provide funding of €700,000 during the examinership, which can last up to 100 days.
Mr Simons said his clients believed certain liabilities, including rebates to three advertising agencies and salaries, should continue to be paid because failure to do so could jeopardise the business as a going concern.
The court heard one of the factors in the downturn in the fortunes of MMN, which had only become loss-making in 2018 and enjoyed some 42 million “hits” a year on its platforms, was a controversy last year when it was revealed a company employee used a “click farm” to artificially inflate engagement numbers. Click farms involve a large group of low-paid workers being hired to click on paid advertising links.
Niall McGarry, former chief executive, said in an affidavit the click farm incident, which he said he only found out about afterwards, cost the business more than €1 million. He said it was the result of the irresponsible actions of “one rogue employee”.
Mr McGarry disputed claims by the petitioner that he only stood down as chief executive last December. He said he did so in 2016 and while he was still a driving force in the business and also working on the UK arm, he was not involved in the day-to-day running.
He was “deeply upset at how things transpired and a decade of work is now on the line”, he said. He supported the examinership,
Rent paid and underwritten
Andrew Walker, for the company, said his client also supported the examinership especially as it emerged there were expressions of interest from a number of investors and the rent will be paid and underwritten by BPC Lending.
Ms Smith, for BPC Lending, said liquidation had been considered but would leave a deficit of some €7 million and would be clearly detrimental to all creditors, in particular the unsecured creditors who would get nothing.
Mr Justice Quinn said, having heard from the parties, he was satisfied to appoint Mr McCarthy as examiner and made orders for the payment of certain petition liabilities. The case will be mentioned before the court again next month.
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