Key Changes in Insolvency Provisions

Significant changes compared to previous Companies Acts include:

Part 7 (Charges and debentures)

  • The ability to submit to the Registrar of Companies a notice of intention to create a charge (section 409(4)).

  • Identification of documents which the Registrar will not accept for registration (sections 412(6) and 427). 

  • Priority is determined by the date/time of receipt by the Registrar of the prescribed particulars (section 412).

  • Prescribed statement informing Registrar of release of charge, instead of statutory declaration (section 416(4)).

Part 8 (Receivers)

  • Expanded requirements applying to notification of receiver’s appointment (section 429).

  • Statutory prescription of certain powers of the receiver (section 437).

  • Ability of the High Court to order return of assets (section 443).

  • Reporting of offences to the Director of Public Prosecutions (section 447).                             

Part 9, Chapter 1 (Schemes of arrangement)

  • Reduced involvement of the High Court in the process (section 450).

Part 10 (Examinerships)

  • Petition to appoint an examiner to a “small company” can be made to the Circuit Court (section 509).

  • Expanded requirements applicable to notification of examiner’s appointment (section 531).

  • No liability shall attach to an examiner, nor will any legal or professional duty be contravened, where the examiner is exercising powers in compliance with section 524 (section 524(9)).

  • The examiner’s proposals can provide for a reduction in company capital (section 542(6)). 

Part 11 (Winding up)

  • Reduction in Court supervisory role once winding up order has been made (various in Chapter 5,7,8,9 and 10).
  • Director of Corporate Enforcement can petition for the winding up of a company “in the public interest”(section 569(1)(g)).
  • Minimum qualifying indebtedness to serve a statutory demand for payment is increased to €10,000 – a single creditor – and to €20,000 in aggregate for two or more creditors (section 570 (a),(b)).
  • Except for two circumstances, the Summary Approval Procedure applies to members’ voluntary liquidations (“MVLs”) (section 579).
  • Contents of notice of the meeting, with creditor’s right to get/inspect list of creditors, in a Creditors’ voluntary liquidation (“CVL”) (section 587(3)-(5)).
  • Expanded requirements applicable to notification of liquidator’s appointment (section 595).
  • Person in possession or control (without lawful authority) of “books, records or other property of the company” must give them to the liquidator (section 596(2)).
  • Person/s who provided funds to the company to discharge “costs, charges or expenses” of the winding up (except those relating to arranging the creditors’ meeting and the statement of affairs) acquires the priority rights of such debts (section 617(4)).
  • Maximum amount of wages of a single employee entitled to preferential status increased to €10,000 (section 621(4)).
  • Tabular summary – classified by category – of liquidator’s powers (section 627).
  • Exercise of certain powers specified in section 627 requires prior approval of the Court or Committee of Inspection, other powers must be notified to relevant persons within 14 days after they are exercised (section 629).
  • Five categories of persons who are entitled to act as liquidators (section 633).
  • Power to remove a liquidator in a MVL or CVL (section 636637).
  • Basis of liquidator’s remuneration to be agreed by members (MVL) or by the creditors/Committee of Inspection (all other liquidations) (section 646). 
  • Prior approval of remuneration by relevant persons before it is taken (section 647).
  • Without sanction of the Court/the creditors, a member of the Committee of Inspection cannot profit from the liquidation (section 668(9)).
  • Written notice of final meeting instead of advertisement in at least two daily newspapers (sections 705,706).

 

See also the Accountancy Ireland article from June 2015 by Jim Stafford: 'Insolvency Implications of the Companies Act'.

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