CHARTBUSTERS Ltd, which runs 37 home entertainment stores employing 267 workers, has gone bust.

Gary McCarthy, counsel for the company and six related firms including tanning and weight loss outlets, told Mr Justice John Edwards in the High Court that Chartbusters had debts of about €20m.

He said the Bank of Scotland (Ireland), KBC Bank, Lombard Ireland and Friends First Finance Ltd, were owed €12m with landlords being owed €2m.

Judge Edwards appointed Neil Hughes, of Hughes Blake Chartered Accountants, as interim examiner to protect the company's assets.

Extensive

Director Richard Murphy told the court that in 1979 he founded XtraVision, which built up a very extensive business in the retail sale and rental of videos. He sold his shares in XtraVision to Cambridge Group in 1990 with a three-year non-competition clause.

Chartbusters was incorporated in July 1993, opening stores in Blanchardstown and Tallaght.

By 2002, it had 50 stores grossing a profit of €11m. Two years later, profits had risen to €17.5m.

The company, as a result of competition and changes in technology, had diversified into internet services and tanning booths.

Today, the company has 19 stores in Dublin and 18 throughout the rest of the country.

Murphy said the projection for the future was the retention of about 20 stores currently operating profitably.

Turnover had dropped to €12.2m for the period ending 30 April, 2008 and costs, had eroded profits.

"The directors are aware that for the company to survive it will be necessary to radically cut costs and close a number of underperforming stores," Mr Murphy said in an affidavit.

He said the company was currently unable to repay the interest due on the loans and was servicing about €900,000 a year in leasing payments.

Survival

Mr Murphy said an independent accountant believed the company would have a reasonable prospect of survival as a going concern with new investment, closure of under-performing stores, negotiations with landlords and acceptance of an appropriate scheme of arrangement by the creditors under the protection of the High Court.

He said in recent times a number of creditors had taken actions against the company and there was a petition before the court, due to be heard on January 12, for the winding-up of the company.

- Ray Managh