The scheme of arrangement (Rescue Plan) prepared by the examiner of Mac Interiors Limited (Company) has not been approved by the High Court following strong objections from the Revenue Commissioners (Revenue).
In its challenge, Revenue argued that there had been an error in “class composition” or, in other words, an error in the classification of creditors that voted on the Rescue Plan.
Class Composition
In a recent decision, the Court of Appeal upheld a High Court finding, which granted a declaration under section 819 of the Companies Act 2014 (CA 2014), restricting the appellant director (Appellant) from acting as a director or secretary of a company for a period of five years, unless the company meets the requirements set out in subsection (3) of section 819.
With effect from 9 May 2022, a new Order 74C of the Rules of the Superior Courts came into operation. Order 74C facilitates the operation of the Companies (Rescue Process for Small and Micro Companies) Act 2021, which inserted a new Part 10A into the Companies Act 2014 (Part 10A).
The Companies (Rescue Process for Small and Micro Companies) Bill 2021 (Bill) detailing the government's proposed rescue process for small and micro companies (SCARP) has successfully passed through the Oireachtas and is expected to be signed into law shortly by the President. The legislation will be commenced at a future date by the Minister.
The Department of Enterprise, Trade and Employment has published the outline of proposed legislation for a dedicated rescue and restructuring framework for insolvent or potentially insolvent small and micro companies – see here.
Background
In a recent High Court decision, it was ruled that the liquidator not only failed in his application before the court, but in bringing forward an application that was 'doomed to fail', the liquidator was acting negligently and breached his duty of care to the company as liquidator. As a result, the liquidator was held personally liable for the costs of the application.
The Revenue Commissioners have issued some recent welcome clarifications about certain provisions of the Government's temporary wage subsidy scheme.
Application for the Subsidy Scheme – An Admission of Insolvency?
The main provisions of the subsidy scheme are set out in Section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020.
That section also contains the criteria for an employer's eligibility to avail of the subsidy scheme. One such criterion is that:
Examinership A number of significant decisions were made by the High Court and Court of Appeal relating to different aspects of the examinership process in 2017. |
Congil Construction Limited & Companies Acts: Mannion -v- Connolly & Anor [2013] IEHC 544
On the 28 November 2013 the High Court restricted two directors of an insolvent construction company, Congil Construction Limited, for a period of five years.
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.