Examiner appointed to Workman's Club, part of former Press Up group
The High Court has appointed an interim examiner to Workman’s Club Ltd, part of the former Press Up hospitality and entertainment group founded by Patrick McKillen junior and Matthew Ryan.
Ms Justice Eileen Roberts appointed Declan McDonald of PwC Ireland as interim examiner on foot of a petition for court protection on behalf of the company by Kelley Smith SC, instructed by Gavin Simons, partner in AMOSS solicitors.
The court heard the company has an excess of liabilities over assets and is unable to pay debts as they fall due. However, if a survival scheme is approved it can continue as a going concern.
Press Up was renamed the Eclective Group last February following its takeover and being run by Cheyne Capital.
The court heard the immediate cause of the court application was the receipt of a demand for some €4.5 million on March 7th, due under guarantees to financiers RELM Capital. Mr McKillen Jr and Liam Cunningham were removed as directors last Monday, April 28th, and are no longer involved in the day-to-day operation of the business, the company says.
Press Up, at its height, operated some 50 bars, restaurants and hotels with 1,600 employees.
In October 2021, the group was refinanced to the tune of €55.5 million by Cheyne Capital and deleveraging began with the selling off of the hotels in the group, the Dean and Clarence, the court petition stated.
Full deleveraging did not take place and Cheyne took over management in July 2024 when it says it discovered depleted stock levels, substantial arrears to suppliers, deferred maintenance and limited reinvestment.
It was decided that four of its operating entities would enter receivership so that the core business and a broader restructuring could take place along with an injection of new money from Cheyne, which took 95 per cent of the group's shareholding in a debt for equity swap and installed its own management team.
The company now operates 12 Dublin venues, including Peruke and Periwig in Dawson Street, Doolally in Richmond Street, and the Workman's Club on Wellington Quay. It has 55 full-time employees out of a total of 362.
The company claims that during a due diligence process after Cheyne took over the running of the business, it was discovered guarantees of some €10 million were given to entities outside the Press Up group.
"These guarantees did not benefit the company and were not aligned with its core operations and represent a material risk to the company's financial position", it said.
The guarantees are almost entirely related to properties owned by companies controlled by Mr McKillen junior, with exposure to alternative lenders RELM, Capitalflow, and Finance Ireland, it said.
Cheyne asked that the guarantees be removed in accordance with the debt-for-equity transaction, but they were never obtained, the company said.
It then received demands from RELM totalling some €4.5 million, but the company could not discharge them, and joint receivers were appointed over seven companies which had guaranteed the loans.
The company made a formal open offer of €250,000 in full and final settlement of its debt, but this was rejected by RELM.
The company owns the Odessa Club property in Dame Street under a lease from Goldstein Property ICAV. The Odessa has not traded since 2017, and it was planned to turn it into a boutique hotel and restaurant, but this did not go ahead.
It has arrears of €50,000 for first quarter rent and, on March 24th, the landlord Golstein issued a demand for payment, but it was not paid.
The company says it has been talking to Goldstein about voluntarily surrendering the lease, but accepts it may now be necessary to apply to court for lease repudiation.
It also has some €6.3 million in warehoused tax liabilities but has been adhering to an agreed monthly repayment plan with Revenue.
Independent expert Alan Large of EY has said in a report that the company has a reasonable prospect of survival if, with court protection, the Odessa lease can be surrendered/repudiated and that there is an investment of at least €2.4m to restructure the balance sheet and fund a scheme of arrangement with creditors.
Mr Large says that an attempt to continue the business, in whole or part, will likely be more advantageous to creditors than a winding up would be.
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