Supreme Court Judgment (ex tempore), 20 February 2009

A return of no goods (nulla bona) no longer required for issue of bankruptcy summons

A decision of the High Court, affirming a rule of practice which required a return of no goods (or a good reason for the absence of same) before it would issue a bankruptcy summons to a creditor, has been successfully appealed to the Supreme Court.  

BACKGROUND

The Companies (Amendment) Act 1990 (the 1990 Act) provides the statutory framework for petitioning the High Court for the appointment of an examiner to a company and providing the company concerned with a certain level of protection from its creditors. In practice, a significant issue which often arises is the enforceability of the provisions of a guarantee in the context of an examinership. The purpose of this article is briefly to look at the enforceability of a guarantee both during the period of protection and once it ends.  

DURING THE EXAMINERSHIP

As we are all well aware, there has been a major slowdown in economic activity in Ireland with many businesses now facing an uncertain future. A combination of factors has led to a tightening of purse strings which has placed many businesses under severe financial pressure.

Recent attempts by the Zoe Group to seek court protection have raised the profile of examinerships. The main legal test to enter the process is: does the company have a reasonable prospect of survival. But what are the key ingredients for a successful examinership?

Supreme Court clarifies law in relation to repudiation of leases (Re Linen Supply Ireland Ltd, 10 December 2009)

The Supreme Court has recently clarified the law in relation to a company’s ability to repudiate/disclaim leases during the course of an examinership. Recent decisions of the High Court, including the O’Brien’s Sandwich Bar decision had created uncertainty in this area.

The economic turbulence stirred up by our most recent credit crunch has thrown up a myriad of difficult legal questions for financiers everywhere. This anxious economic environment which has restrained the financial independence of many Irish companies from their financiers is fraught with legal conundrums.

Workout Agreements

Under the Companies Acts, the liquidator of every insolvent company is obliged to bring a court application to have the insolvent company’s directors restricted from acting as director or secretary of any other company for a period of five years unless that other company has a paid-up share capital of approximately €63,500. The relevant provision of the Companies Acts (Section 150) applies to any person who was a director of the insolvent company either at the date of or within 12 months of the start of the company’s winding-up. Section 150 also applies to shadow directors.

INTRODUCTION

Many practitioners may not think of stamp duty as a particular risk when taking on a liquidation or a receivership and there is limited published guidance on the topic. Against a background of an increasing number of business failures including companies operating in property development it is likely that liquidators and receivers will be faced with stamp duty issues on a more frequent basis. The purpose of this article is to identify some areas where practitioners may encounter stamp duty issues.

PROOF OF TITLE

The first anniversary of the credit crunch passed in recent weeks and the economic turbulence in this country has been reflected in the sharp increase in the number of insolvencies over the past 12 months.

The Employment (Collective Redundancies and Miscellaneous Provisions) and Companies (Amendment) Act 2023 (Act) came into effect on 1 July 2024.