The furniture company’s founding shareholder Frank Carroll was also its main creditor when it entered examinership last autumn. This is how he kept control of the business.
he owner and co-founder of the Dublin luxury furniture manufacturer Alfrank Designs bought his own company out of examinership after foregoing over €1 million in shareholder loans, new company information shows.
The company, which specialises in architectural furniture, including its signature marble-top tables, entered examinership last September after four decades in business. As reported at the time, an independent expert report, prepared by accountant Cormac Mohan of Fitzwilliam Corporate, found that Alfrank Designs was facing a €1.7 million deficit.
This amount was on the assumption that it continued trading, which Mohan found was the best option on the condition that it could secure new investment and agree scheme of arrangement with its creditors.
New company documents show that such a scheme of arrangement, prepared by examiner Joe Walsh of JW Accountants, was approved and the company successfully exited examinership at the end of November 2024.
The main participant in the scheme was Alfrank’s co-founder Frank Carroll, who was the sole ultimate owner of the company through ordinary shares he held either directly or through another company, Alfrank Holdings. Through the same structure, Carroll also owned a sister company, Alfrank International.
Under the scheme, Carroll agreed to write off the entire €1.03 million debt owed by Alfrank Designs to him and to Alfrank International. He also cancelled his entire shareholding in Alfrank Designs and invested a fresh €90,000 to receive new shares giving him a 100 per cent stake in the company. In addition, he had to provide personal guarantees.
2.5 cents on the euro
The bulk of other creditors received just 2.5 per cent of sums owed. They include unsecured tax liabilities of €150,197.31 in Ireland and €183,526 in the UK; €44,426 owed to Enterprise Ireland under the issuance of preference shares to the state agency; and over €150,000 owed to trade creditors.
AIB, too, received just 2.5 per cent of €206,196.97 in secured debt advanced to Alfrank Designs and agreed to lift its security over the assets of the company. However, the bank will recover the totality of an invoice discounting facility worth over €130,000, which it kept open for the business through the examinership period.
Other tax liabilities were to be paid either in full, in the case of around €20,000 owed to the Revenue Commissioners, or at a 75 per cent rate for another €9,322 owed to Revenue and Fingal County Council.
In total, the scheme provided for €40,436 in dividends to be paid in lieu of €1,666,780 in historical liabilities, the company reported.
After Carroll’s re-investment covered those dividends and the cost of examinership, and its key suppliers and main customer maintained support during the period, Walsh concluded last November: “In my opinion, subject to the confirmation of the proposals, the company has a reasonable prospect of survival.”
With such confirmation obtained a few days later, Alfrank Designs exited examinership with a clean slate and Carroll retained the keys to the business, albeit €1.1 million out of pocket.