In Re McInerney Homes Limited
In the McInerney case, the company and the examiner sought to have schemes confirmed which would result in an immediate payment to a banking syndicate of €25 million. The banking syndicate contended that the discounted current value which they expected to recover from their security outside any schemes was €50 million.
Kerr & Ors v Conduit Enterprises Ltd
In 1997 the two directors of the company and others purchased a building and leased it to the company. Ownership of the company changed hands a number of times and, in 2008, the then new owners purported to void the lease on the basis that it had never been approved by shareholder resolution. The landlords issued proceedings seeking a declaration that the lease was valid.
The court held that:
In a series of cases the High Court has:
In January 2010 an interim examiner was appointed to Missford Limited, which operated the Residence Club, a private members club in St. Stephen’s Green.
In a written judgment on the costs and expenses of the interim examiner, the court held that the interim examiner “simply did more with the best of motives than his warrant permitted”. The court proceeded to refuse the interim examiner’s application for remuneration in respect of any work carried out in excess of his statutory powers.
In the matter of Cognotec Ltd (in receivership)
Section 60(14) provides that a transaction in breach of section 60 is voidable against any person who had notice of the facts which constitute the breach.
The company sought to void the debenture which secured the loan on the basis that section 60 had not been complied with and the receiver appointed on foot of the debenture brought a motion for directions.
The court held that:
In the Matter of Bell Lines Limited (In Liquidation)
That decision has effectively been relied on since 2006 for the proposition that, except for the Social Insurance Fund, a party advancing monies for the payment of remuneration falling due before the commencement of an insolvency process but actually paid after such commencement is not entitled to subrogate to the employees’ preferential claims.
The Appeal
In January we posted on the impact of a case that ruled that landlords are able to claim rent as an expense of the administration when a tenant’s administrators are in occupation of all or part of a leasehold property.
A decision by the High Court in December has strengthened the position of landlords who sometimes do not get paid during the administration even where the administrator is running the business from the property.
Certain categories of expense which may be incurred by the company after it has gone into administration, and which an administrator has to pay are known as "expenses of the administration" and the assets of the company in administration must be applied towards payment of these expenses ahead of any payment to creditors under floating charges or to unsecured creditors.
This week we have seen the headlines about the Focus DIY Corporate Voluntary Arrangement (CVA). It is reported that landlords have accepted the CVA and that will enable Focus to continue a significant part of the business and to retain a large number of jobs. Welcome news in many respects.
CVAs can have a significant impact on a property investment so this posting considers how CVAs work and their impact on leases?