Fade Street Social Likely to Survive Examinership
Dublin’s Fade Street Social is expected to remain open, even with Revenue seeking €1.7 million from the restaurant business. An examiner was appointed following a “competitive bidding process.”
Examinership Appointed to Avoid Liquidation
**Dessie Morrow** of Azets Ireland was appointed examiner of Prime Steak Restaurant 2012 Limited, which operates as Fade Street Social. The business sought examinership to avoid liquidation, which it claimed would result in 86 job losses.
In an affidavit, **Dylan McGrath** stated he was “anxious”
for an examiner to be appointed to “reassure staff.”
Factors Contributing to Financial Strain
The company petition blamed several factors for its financial difficulties:
- Rising supply costs.
- The cost of living crisis, impacting the hospitality sector.
- An increase in the VAT rate.
- The Covid-19 pandemic.
Increased rental obligations, stemming from the sale of the premises by a related party to decrease overall liabilities, also played a role. A minimum wage increase led to approximately €171,902 in additional labor costs; the company restructured to reduce employee hours.
Intercompany Loans a Key Concern
Loans to other companies owned by **Mr. McGrath** emerged as a significant issue. Shelbourne Social Limited, behind the Shelbourne Social, owed the company over €1.39 million when it was wound up in September 2022.
Loans to Rustic Stone and Brasserie Sixty6 were written off during their administrative rescue processes.
While a debt warehousing facility from the Revenue Commissioners initially aided cash flow, the accumulating debt eventually became unmanageable.
Debt to Revenue a Significant Hurdle
The total debt to Revenue amounts to €1.74 million, a substantial portion attributed to warehoused tax. Unpaid VAT payments from 2020 to 2025 total nearly €1.2 million, in addition to just under €550,000 in PAYE and PRSI payments.
Just six days before the examinership filing, the company received a 21-day letter of demand for tax and interest.
Recent data indicates that restaurants are struggling with rising costs. According to a report by the National Restaurant Association, 85% of restaurant operators say that their restaurant is less profitable than it was in 2019 (National Restaurant Association).
Path to Survival
Despite these challenges, sources close to the company believe it has a strong chance of survival, citing recent profitability before losses from intercompany loans and consistent business in a popular location.
An independent examiner’s report highlighted a “significant recovery”
in turnover post-pandemic, with revenue increasing from €1.47 million in the year ending June 2021 to over €5 million in each of the subsequent two financial periods. However, turnover remains below pre-pandemic levels.