On 23 August 2013, the High Court granted the petition of Bank of Ireland to have Brian O’Donnell and his wife, Mary Patricia O’Donnell adjudicated bankrupt.  One of the issues before the Court was the appropriate date for determining the centre of main interests (COMI) of a debtor.  Two possibilities were put forward: (i) the date of presentation of the bankruptcy petition to the Examiner’s Office of the High Court; or (ii) the date of the hearing of the application by the High Court.

In its decision in In re Davis Joinery Ltd [2013] IEHC 353, the High Court identified the difficulties that employees of corporate employers may face when their employer ceases trading without taking any steps to formally wind-up the company.

The Government, has announced that it is examining potential changes to the law to clarify the position of residential tenants where a receiver is appointed to rented accommodation. Concern has been expressed that there is a lack of clarity as to whether a receiver appointed to such a property assumes any of the responsibilities of the landlord or whether he should be solely concerned with recovering value from the asset, as would be conventional.

Borrowers are increasingly seeking to challenge or frustrate the validity of an appointment of a receiver on technical grounds. While each case will be determined on its own merits and facts, a recent decision of the High Court is illustrative of the Court’s attitude towards some such arguments.

124 members of the Element Six pension scheme are suing the trustees of the scheme in the Commercial Court for alleged breach of duty arising out of the decision to close the scheme with a significant deficit.  The members claim that the trustees breached their duty to the members by failing to demand that the employer fully fund the deficit in the scheme before wind up.  A number of general issues relating to the obligations of trustees were raised during the 3-week hearing of the case.

Background

On 24 December 2013 the Companies (Miscellaneous Provisions) Act 2013 was signed into law by the President.  The purpose of the legislation is to expedite a number of amendments to existing legislation pending the enactment of the Companies Bill.

Circuit Court Examinership

A former director of Custom House Capital Limited (CHC) was recently found by the High Court to have fraudulently misrepresented to an investor that her €145,000 investment in the company was “safe” a year before CHC's collapse.

In March 2010 Ms Tressan Scott entered into a Subordinated Loan Agreement with CHC pursuant to which she loaned the sum of €145,000 to CHC. At the time the agreement was signed, Ms Scott was recovering from treatment for Lymphoma.

On 22 January 2014 the High Court ordered the winding up of a property company, Fuerta Limited, on the unusual ground that it was just and equitable to do so. Resort to this ground for winding up is usually reserved for the most intractable of situations and it is thought to be the first time the Court has done so on foot of a creditor petition.  

Section 222 of the Companies Acts 1963 provides that leave of the High Court must be obtained in order to bring or prosecute proceedings against a company which is the subject of a winding-up order.  In In re MJBCH Ltd: Mary Murphy [2013] IEHC 256, the High Court confirmed it has jurisdiction to grant leave retrospectively under this section.

The High Court has granted a creditor’s petition to wind-up a company, notwithstanding the claim that the company could survive as a “going concern” following a restructuring, on the grounds that such a claim should have been advanced by way of application for examinership: In re Heatsolve Ltd [2013] IEHC 399.