Examinership Flashcards
(25 cards)
What is the purpose of examinership?
To allow an insolvent company with a reasonable prospect of survival to restructure under court protection.
Under what legislation is examinership governed?
Part 10 of the Companies Act 2014, originally introduced by the Companies (Amendment) Act 1990.
What is the threshold for entering examinership?
The company must have a reasonable prospect of survival as a going concern.
Who can present a petition for examinership?
The company itself, its directors, its shareholders, creditors (including contingent creditors).
What document must support the petition?
An independent accountant’s report (s.511 CA 2014).
What case emphasized the need for objective evidence in support of the petition?
Re Vantive Holdings [2010] 2 IR 108
How long does the initial court protection period last?
70 days, extendable to 100 days, and up to 12 months (Regulations of 2022).
What are some key protections under s.520 CA 2014?
No winding-up or receivership (s.520(4)(a)-(b)), no enforcement of security without examiner consent (s.520(4)(d)), no lease repossessions or legal proceedings (s.520(4)(e)-(f)).
What case clarified the strict interpretation of s.520 protections?
Re Holidair Ltd [1994] 1 ILRM 481
What powers does the examiner have?
Call and attend board meetings, apply to the court for directions, propose a scheme of arrangement, repudiate contracts with court approval (s.537), override negative pledge clauses (s.525), dispose of assets subject to security (s.530).
What case allowed lease repudiation in examinership?
Re Linen Supply Company of Ireland (2009)
Can employee claims proceed during examinership?
Yes – per the 2022 Regulations, employee claims are excluded from the stay.
What must a scheme of arrangement contain (s.539 CA 2014)?
Classifications of creditors/members, impaired vs. unimpaired classes, equal treatment within classes, implementation details and management changes.
Who can vote on the scheme?
Only impaired creditors or members whose interests will be affected.
What majority is required for scheme approval by creditors?
A majority in number and value within each class (s.540(4) CA 2014).
What conditions must be met for court confirmation of a scheme (s.541(4))?
At least one class of impaired creditors accepts, proposals are fair and equitable, not unfairly prejudicial, not for tax avoidance.
What happens if there is no reasonable prospect of survival?
The court must refuse confirmation (s.541(4A)).
What case said creditors must do at least as well as in liquidation?
Re Antigen Holdings Ltd [2001] 4 IR 600
Do the examiner’s expenses have priority over creditors?
Yes – examiner’s remuneration and expenses have priority over all claims, including secured creditors (s.554(2)).
What case confirmed examiner’s costs have priority over a liquidator?
Re Springline Ltd [1997] 1 IR 467
What types of businesses are good candidates for examinership?
Viable trading companies with unsustainable debt (e.g., Fallon & Byrne), retailers with excessive leases (e.g., Mothercare, B&Q).
What types of businesses are poor candidates?
Companies with no path to profitability or left behind by technology shifts (e.g., Xtra-Vision, Chartbusters).
What case rejected a scheme for being a holding plan, not a rescue plan?
Re Tivway Ltd [2010] 3 IR 49
What case showed that secured debt can be written down in examinership?
Re McInerney Homes Ltd [2011] IESC 31
