The High Court has appointed an interim examiner to look after the affairs of Golden Discs, the 20-store Irish music retail chain that’s €9.5 million in debt.
€1.38 million of this is owed to Sony Music Entertainment Ltd. who initiated Friday’s court proceedings, which led to the appointment of the Examiner.
Represented by Lyndon MacCann SC, Sony argued that Golden Discs would be in a position to address their debts if they were to close six of their loss-making outlets in Dublin (St. Stephen’s Green, Mary Street, Jervis Street and Stillorgan); Limerick (Jetlands Shopping Centre); and Maynooth (Manor Mills Shopping Centre). It was central to Sony's case that, given the protection of an Examiner, it would be possible to turn Golden Discs into a profit making company capable of surviving.
MacCann also stated that at a February 2 meeting with Sony, Golden Disc M.D. Stephen Fitzgerald proposed a voluntary scheme of arrangement whereby major creditors would receive between 35 and 40% of the monies owed to them.
Sony said they had requested more detailed financial information from Golden Discs, which, as of Friday’s High Court action, had not been provided.
Along with the general economic downturn, and the impact of illegal downloading on CD sales, Golden Discs’ financial difficulties appear to have been exacerbated by increased rents.
"This won't come as a surprise to people in the business," one industry insider told Hot Press, during the course of monitoring the story over the past few weeks. "People knew that there were difficulties there. However, it is important to the industry to see if Golden Discs can be saved. It isn't just about maintaining jobs, which is of course significant for everyone who works in the chain. It's about overall volume of sales. To lose twenty outlets would be a very big blow to the industry."
A petition for the interim examinership, which is being handled by Michael McAteer of Grant Thornton, to be made permanent will be heard on February 23. In the meantime, Golden Discs are continuing to trade.