Mr Justice Denis McDonald made the order after New Look said its tax affairs needed to be up to date before it can avail of the Employment Wage Subsidy Scheme (EWSS) for workers.
Monday's hearing was in advance of an application the company is due to bring on Tuesday to have an examiner appointed.
Landlords who are owed rent arrears on New Look premises opposed the company's request to pay Revenue, saying its insolvency is “contrived,” and that the payment would reduce assets available to pay other creditors' claims.
New Look Retailers (Ireland) Limited, which operates 27 stores and employs 475 people, has already had an interim examiner appointed after it sought the protection of the courts due to its financial difficulties.
Today, Kelley Smith BL said to be eligible for the EWSS, the company must have a tax clearance certificate which would only be available when its taxes were fully paid.
“Revenue’s position is absolutely clear, that the tax affairs in the context of the insolvency process must be up to date before the subsidy can be claimed,” she said.
The court heard the bill included PAYE, PRSI and a VAT return of just over €1 million.
There would be a “real” cost to the company of €200,000 if the EWSS application was not made by the end of September, because it could not be backdated, Ms Smith said.
Arthur Cunningham BL, for the Revenue Commissioners, said it was the “factual position” that the company could not avail of the EWSS without a tax clearance certificate.
Warehousing, or deferral of tax debt was unavailable during the insolvency process.
Rossa Fanning SC, for a number of landlords, said New Look had cash reserves of €15.6 million and had been profitable for two years.
He said there was “something counterintuitive” in a company that was saying it is insolvent, “asking to pay €2.7m today so it can save €200,000 a month.”
“You can’t contrive your own bankruptcy while sitting on a big pile of €15.6 million in cash, having the capacity to pay your outstanding rent and declining to do so,” Mr Fanning said.
He said it was a decision on the part of the company not to pay its debts as they fell due.
“It’s absolutely open to this company on the basis of cash flow to pay all of its landlords in full,” he said. Either the company was not insolvent or the insolvency was “technical, contrived or strategic,” he said.
There was an “unseemly haste” in the application being made a day before the petition for examinership, Mr Fanning said.
He asked the judge not to make the order and to “at the very least defer a decision.”
Mr Justice McDonald said it was the court’s view that the entire amount had to be paid to qualify for the EWSS, and a case for urgency had been made out because after tomorrow, any benefit from the scheme for September would be lost.
He said while he acknowledged the “strongly held views” of the landlords, the “safer course” was to make the order authorising the payment.
Ken Fennell, of Deloitte was appointed as interim examiner earlier this month.
Mr Fanning, with Brian McGuckian BL, was appearing on behalf of companies which are the landlords of New Look’s stores in Liffey Valley shopping centre, Dublin; Navan Town Centre, Co Meath; Fairgreen Shopping Centre, Mullingar, Co Westmeath and the Castlewest Shopping Centre, Ballincollig, Co Cork.
The court has heard the landlords believed New Look was seeking “to ride on the coat-tails” of a Company Voluntary Arrangement undertaken by the UK parent company.
