Top chef Dylan McGrath’s Prime Steak Restaurant which trades as Fade Street Social owes Revenue €1.7 million “and maybe more” and is unable to pay its debts, the Circuit Civil Court has heard.
Judge O’Connor, who appointed Dessie Morrow of Azets Ireland as examiner of the company’s affairs, was also told that Mr Morrow had undertaken to provide a special report to Revenue in relation to inter-company loans of almost €4.5 million.
Barrister Ross Gorman said the company’s board of directors had decided on 26 June to seek the protection of the court from its creditors by the appointment of an examiner.
Mr Gorman, who appeared with BHSM Solicitors for the company, told Judge O’Connor that McGrath, of Mespil Road, Ballsbridge, Dublin 4 and Vincent Melinn of Howth Road, Dublin, own 50% of the company’s share capital.
He said the company has 86 employees whose jobs could be saved under a scheme of arrangement with its creditors and under such a scheme their jobs could be saved and creditors may be able to trade profitably with the company into the future.
Barrister Sally O’Neill, for Revenue, raised the matter of inter-company loans between four connected restaurants one of which closed after Covid and two others eventually failed.
Gary McCarthy SC, counsel for the examiner, told the court that since the appointment of an interim examiner had been advertised there had been nine expressions of interest by independent people for the purpose of making an investment.
Examiner believed company had prospect of survival
Mr Gorman said the examiner believed the company had a reasonable prospect of survival under a scheme of arrangement with all interested parties involved.
He said the company operates Fade Street Social, a very popular destination bar/restaurant on Fade Street, Dublin 2.
He told the court the premises covered 8,000 square feet and was set over three floors with different bars and restaurants on each level with two distinct restaurants, a cocktail bar, a rooftop terrace and a ground level terrace.
Counsel said the cost of living crisis had made customers more price sensitive and the number of patrons in the city centre had decreased and between 2023 and 2024 restaurants throughout Dublin and Ireland had experienced a 15% decline in sales.
He said the company had faced six main sources of difficulties – increasing labour costs; rising supply costs; amendment of the VAT rate from nine per cent to 13.%; the Covid-19 pandemic; increased rental obligations and related party loan losses.
Mr Gorman said the company was very significantly indebted to the Revenue Commissioners including VAT, PAYE and PRSI.
“The directors acknowledge that the company’s failure to pay tax was completely unacceptable and they unreservedly apologise for that,” the directors stated in a petition for the appointment of an examiner.
“While the directors accept the company is currently insolvent they believe it has a reasonable prospect of survival as suggested by an independent expert.”
Judge O’Connor granted protection of the court to the company and appointed Mr Morrow as examiner giving him full authority to carry out his duties in that role.
