Insolvent companies often hold a large volume of personal data, such as customer lists or user data. Who is responsible for this information? Recently, the Irish High Court decided a case concerning the transfer of patient records from a private hospital in liquidation.

With the current financial difficulties faced by the oil & gas industry, directors of companies incorporated in England and Wales must be mindful of their duties and responsibilities to the company as well as the potential personal liability that could arise from breaching those duties and responsibilities in the context of an insolvency.

Who qualifies as a director?

The High Court has found two former directors of a car dealership in Dublin, Appleyard Motors Limited (In Liquidation) (Appleyard), personally liable to a former customer who paid for but did not receive three vehicles in the weeks leading up to the company’s liquidation. This case is particularly noteworthy as it is only the second time a director has been held personally liable for a company’s debts for reckless trading.

On 13 May 2015, the Government announced that it intends to give the courts the power to overrule the rejection by secured creditors of arrangements under the Personal Insolvency Act 2012 (the “Act”).

There is scant detail in the announcement save that it is intended to “support mortgage holders who are in arrears” and that legislation is to be brought forward before the Summer recess. How is such legislation likely to work and what potential frailties could it have?

The Issue

The recent decision of the Supreme Court in the case of In the matter of Sean Dunne (a bankrupt) has confirmed that it is possible for a debtor to be adjudicated a bankrupt under the laws of Ireland notwithstanding the fact that the debtor has already been adjudicated a bankrupt in another jurisdiction which is not subject to the European Insolvency Regulation.

Summary

The Department of Justice and Equality has announced that the Government is to introduce legislation before the summer recess giving Courts the power to review and, where appropriate, approve insolvency deals that have been rejected by banks. This process will represent a reform of the Personal Insolvency framework and "seeks to ensure that fair and sustainable deals are upheld for struggling borrowers willing to work their way out of difficulties with a view to keeping their family home."

A bank has recently successfully challenged the coming into effect of a debt settlement arrangement (“DSA”) on grounds that inaccuracies existed in the debtor’s statement of affairs such that its approval would cause material detriment and prejudice to his creditors. 

The High Court has confirmed that it does not have a role in examining the reasonableness of a creditor’s vote on a personal insolvency arrangement when considering if a bankruptcy petition should be adjourned.

In a number of recent cases, debtors:

Introduction

The recent decision of the High Court in the case of In the matter of Ladbroke (Ireland) Limited and Others has, in the first written judgment in relation to the matter, reaffirmed the principles established in the eircom examinership regarding an examiner’s engagement with potential investors. The decision upholds the primacy of the examiner’s commercial judgment, which is subject to review by the court only to the extent that it is so “utterly unreasonable and absurd that no reasonable man would have done it”.

The Role of the Liquidator