Legislation enabling the immediate liquidation of IBRC (formerly Anglo Irish Bank) was signed into law in the early hours of 7 February. Draft legislation was published on 6 February following media speculation that the Irish Government was preparing plans to liquidate IBRC and was promptly brought before both Houses of the Oireachtas (the Irish Parliament). The Minister for Finance stated that immediate action was necessary in order to prevent any action being taken which could have put IBRC’s assets at risk.

The Minister for Justice and Equality has made an order providing for the commencement of certain provisions of the Personal Insolvency Act 2012 with effect from Friday 1 March 2013.

The provisions to be commenced with effect from this date are as follows:

The Ward and Anderson families have been involved in the cinema business in Ireland for over sixty years. Several of the families’ principal cinema assets were operated through a jointly–owned company, Dublin Cinema Group Ltd (DCG). Following a number of disagreements over the years, including the bringing of a derivative action for alleged beach of fiduciary duty against one of the company directors, a petition to wind up the company was brought before the Commercial Court in January 2013.

The Personal Insolvency Bill has completed its passage through the Dáil (lower house of the Oireachtas (the Irish Parliament)). The Bill is now moving through the Seanad (upper house of the Oireachtas), where its provisions are subject to debate and amendment. The Minister for Justice recently confirmed his intention that the Bill will become law by Christmas.

The Bill provides for: 

In a recent High Court case, a liquidator sought an order declaring that certain payments made by a company prior to its liquidation were a ‘fraudulent preference’ and invalid. The company had made payments to its overdrawn bank account which was personally guaranteed by one of its directors. It was alleged that the payments were made in order to reduce the company’s overdraft and therefore, the director’s own personal exposure under the guarantees.

An application by Quinn family members to have court-appointed receivers removed and their solicitors discharged on the basis of an alleged conflict of interest and partiality has been dismissed by the Commercial Court.

The Personal Insolvency Bill has completed its passage through the Dáil and the Seanad (the Irish Houses of Parliament) and will now be passed to the President for signing into law.

The new legislation has been described by the Minister for Justice as “the most radical and comprehensive reform of our insolvency and bankruptcy law and practice since the foundation of the State.”

It provides for:

The Personal Insolvency Bill was signed into law by the President on 26 December 2012.

The Act provides for:

Once a company has entered into a formal insolvency process, all its assets must be realised and distributed in accordance with the Companies Acts. An attempt to prefer a particular creditor up to two years prior to an insolvent liquidation can be declared void by the courts on the application of the liquidator of the insolvent company. To succeed on such an application, however, the liquidator must prove that the dominant intention of the insolvent company at the time it entered into the transaction was to prefer the creditor in question.

The usage of pre-pack insolvency sales is less developed in Ireland than in other jurisdictions, but there has been an increasing number of asset sales structured through pre-pack receiverships over the last year. The most recent successful example was the sale of the A-Wear retail chain by its receiver Jim Luby of McStay Luby. In July 2011 the Superquinn grocery chain was sold to Musgraves by its receivers Kieran Wallace and Eamonn Richardson of KPMG, in what was probably the largest ever pre-pack transaction in this market.