The Finance Bill 2013 introduces a number of provisions that impact on the VAT treatment of transactions involving liquidators, receivers and mortgagees in possession (the “Insolvency Practitioners”). These provisions were largely expected following the consultation process on the tax implications of appointing a receiver which has been ongoing since July 2012.

A recent High Court decision has further demonstrated that failure to comply with the Code of Conduct of Mortgage Arrears (the “Code”) is likely to result in the court refusing to grant an order for possession.

Summary

The long awaited Personal Insolvency Bill (the "Bill") was published on Friday, 29 June 2012 and provides for significant changes to the personal insolvency regime in Ireland. However, it does not differ greatly from the general framework for personal insolvency reform published earlier this year. Some key points are as follows:

In an insolvent winding up, preferential creditors are entitled to be paid first from assets subject to a charge which at the time of creation was floating, regardless of whether the floating charge has crystallised at the commencement of the winding up.

In January 2011, the High Court refused to approve an examiner’s rescue plan (“Scheme of Arrangement”) for construction company McInerney Homes Limited (“McInerney”), on the basis that the Scheme of Arrangement was unfairly prejudicial to the secured creditors consisting of a Banking Syndicate of Anglo Irish Bank Corporation Limited, Bank of Ireland plc and KBC Bank plc (the “Banks”).

Overview

In the recent High Court decision of McInerney Homes Limited, the court has ruled for the first time that proposals for a scheme of arrangement (the “Scheme”) entailing payment to a secured creditor of a written down sum in full satisfaction of its debt, could be approved. However, on the facts of the case the court held that the objecting secured creditors would be unfairly prejudiced if they were required to accept the sum proposed to be paid, and, accordingly, refused to approve the Scheme.