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

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

Liability management transactions which may favour a subset of creditors over another are increasingly common in the US leveraged finance markets. 2024 may be seen as the year in which these US imports began to make a real impact in Europe. Which strategies could creditors employ to protect themselves from unfavourable treatment where such transactions are attempted?

The Employment (Collective Redundancies and Miscellaneous Provisions) and Companies (Amendment) Act 2024 (Act) has been signed into law but awaits a commencement order to bring it into operation.

In summary, the Act amends the Companies Act 2014 (Companies Act) by modifying the attribution test for related companies to contribute to the debts of the company being wound up, broadening the operative time for unfair preferences, and varying the test for reckless trading.

1. Related company contribution

In the current market, investors are increasingly considering their options in relation to the stressed and distressed credits in their portfolios. Whilst mindful of stakeholder relationships, secured lenders may, in some circumstances, wish to consider the "nuclear option": enforcing their share pledge over a holding company of the operating group (ideally, such pledge being over a single company which directly or indirectly holds the entire business - a "single point of enforcement").

Following on from the UK Supreme Court decision in Sequana (discussed here), the recent UK High Court (UKHC) decision in Hunt v Singh [2023] EWHC 1784 (Ch), further considered the duty of directors to take into account the interests of creditors in certain circumstances.

The number of company insolvencies in 2023 increased by over a third compared to 2022. The hospitality sector was particularly badly affected, with 53% more insolvencies than in 2022.

It appears that 2024 will be similarly challenging for companies in the hospitality sector. The Restaurant Association of Ireland (RAI) has set out the main challenges faced by the industry, including increased energy and labour costs, and the VAT rate reverting to 13.5% after having been reduced to 9% during the covid-19 pandemic.

The High Court (Court) recently dismissed a petition seeking the winding up of a biofuel company (Company).

The ex tempore judgment is of note because it considers the standing of the Petitioner to bring the application and the consequences of a relevant witness not being cross-examined by the Petitioner on his affidavit evidence regarding the solvency of the Company.

Background

The High Court has reaffirmed the test to be applied in considering an application to dismiss a bankruptcy summons grounded on a judgment.

The bankruptcy process in Ireland involves multiple steps and the debtor can seek to bring it to a halt at each step. Debtors often seek to rerun effectively the same arguments at each step, ignoring previous findings by the courts. One such step is an application to dismiss a bankruptcy summons.

The Irish High Court has determined that the liquidation of an Irish aircraft leasing company, which was a 100% subsidiary of a Russian company expressly subject to EU sanctions, rebuts the presumption that the company was controlled by the Russian parent for the purpose of EU sanctions.

This enables the liquidators to deal with the assets without costly and time-consuming derogation applications.

Background