Former Dragon’s Den TV star Ramona Nicholas and her husband Canice will now support the review process launched for their Cara drugstore chain by his lenders. However, the couple want to “set the record straight” on what they say are “materially incorrect” claims by the lender, which they say could damage their reputations if left unchallenged.
The lender, Elm Corporate Credit, a subsidiary of Dunport Capital, asked earlier this month that Ken Tyrrell be appointed as the 13-drugstore chain’s interim reviewer on a € 14 million debt. Cara’s founders, Mr. and Mrs. Nicholas, initially opposed it.
Elm told the High Court that his confidence in Cara’s leadership was undermined by budgetary difficulties. He also alleged that repayments had not been made and he raised concerns about loans to directors, the fate of 37 checks and € 100,000 which he said were sent outside the group.
The case is due to return to the High Court today to confirm the examiner’s appointment. Earlier this week, however, Canice Nicholas filed an affidavit with the court agreeing to support the process and suggesting that the owners would make an offer for Cara during the review.
He said the purpose of his affidavit was twofold: to show that the financial challenges alleged by Elm are “exaggerated” and to correct what he claims to be damaging errors in its application.
He acknowledges that four of the 20 reimbursements to Elm were late, but said three of them were with Elm’s agreement while the fourth, due March 31, was delayed “as a direct result” of the payment. Covid-19 crisis. He got paid later in the summer. He said a financial report with Elm’s candidacy assumed a zero cash balance, when Cara actually has € 1.4 million in reserves, enough to cover the cost of € 1.2 million. euros of the exam.
Mr Nicholas alleges that a 2021 forecast of a 57% drop in profits, cited by Elm to show the difficulties ahead for Cara, is “unrealistic”. Indeed, he claims, Elm insisted he had been prepared on the numbers for the second quarter of 2020, “the three worst trading months in Cara’s history” due to the pandemic.
He alleges that the concerns raised by Elm regarding debts owed to suppliers and homeowners are “overestimated or unfounded” and gave details of the payments he said were made. Elm’s concerns about a legal dispute between Cara and the HSE were also “baseless” as the case is not imminent.
Mr Nicholas dismissed concerns about 37 checks and payments outside the group. He said the € 804,000 in checks had been paid for rent and supplies, and he submitted the details to the court in a spreadsheet. He also provided bank statements which he said show € 100,000 was loaned to a third party in 2018 and reimbursed to Cara four months later. All of the directors’ loans have been repaid, he says.
He said Cara’s ability to hold board meetings had been affected by the pandemic, and he also dismissed concerns that Elm raised about the rent Cara paid him in a unit he owns in Co Sligo. He says Elm claimed the rent was too high at € 150,000, while the rent “actually paid by Cara to me” is only € 60,000.
The case is due to be in the High Court later Thursday.