April 2, 2020
Covid-19 and Commercial Leases
As the Covid-19 health emergency continues to escalate in Ireland, many areas of society are being impacted in a way much similar to that of the financial crisis. One area...
Lavelle Partners is recognised as one of Ireland’s leading insolvency practices specialising in examinerships. Our insolvency team is headed up by Managing Partner, Michael Lavelle, a top insolvency expert for over thirty years. Michael has developed our insolvency team into a top-tier practice, as reflected by the large number of landmark insolvency cases in which the firm has acted.
Lavelle Partners have successfully advised and represented many examiners, small, medium, and large companies in Ireland through the examinership process. We understand that businesses making the decision to enter into examinerships need sharp and decisive legal guidance to represent their best interests. Examinerships in Ireland hold many advantages over other insolvency measures for a business struggling to pay its debts; our team of insolvency specialists can assess your precise circumstances and advise whether this would be the best route for you. As we are a full-service law firm, our insolvency specialists benefit from the combined knowledge and legal expertise of each of our legal practices, including commercial and corporate, property, banking, debt and asset recovery, litigation and dispute resolution, and employment law. In doing so, our legal advice is considered from all possible angles and provides the best chance of a favourable outcome for your company, its shareholders, employees and other stakeholders.
We act for any party who may be involved in the examinership process, whether it is the examiner, creditor, directors, shareholders or the purchaser of a business which is in examinership. We have been involved in many successful examinerships on behalf of various examiners and we have also successfully opposed the appointment of examiners or the implementation of schemes of arrangements on behalf of creditors who were being unfairly prejudiced.
Examinership affords companies struggling to pay their debts with protection from liquidation, typically for 70–100 days. Not all companies are eligible for examinership, but those that do can seek to trade their way back to viability. This mechanism is open to small, medium and large companies.
The examinership regime was first introduced by the 1990 Companies Act and was subsequently revised in the Companies (Miscellaneous Provisions) Act, 2013 to include small companies. Under this Act, small companies could choose to apply directly to the Circuit Court for the appointment of an examiner under the examinership regime.
Firstly, a petition is filed with the High Court or Circuit Court for examinership (depending on the size of the company) with an accompanying independent expert report (including recommendations for the approach to be taken). The petition can only be submitted by the company, its directors, a creditor or shareholders possessing over 10% of the company’s shareholding. The petition will name a person to be appointed examiner and must demonstrate that:
From the submission of the petition, the company then has 70 days (which may be extendable by a further 30 days) to trade without creditors taking action to seek what they are owed. During this time, the examiner must investigate the affairs of the company, prepare a compromise or ‘scheme of arrangement’; in other words, a plan to facilitate the survival of the company. This may include termination of specific contracts, writing-off of debt, the surrender of property leases, capital injection or further investment. This proposed scheme must be put to the creditors of the company and then may be approved by the creditors or by the Court.
For further information regarding examinerships and related insolvency issues in Ireland, please contact Lavelle Partners in confidence on (01) 644 5800.
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