“To achieve great things, two things are needed: a plan, and not quite enough time.” – Leonard Bernstein

To paraphrase, great things happen when there is a plan and a deadline.

Examinership is one of Ireland’s key rescue processes for insolvent companies. It has been used successfully in very many cases since its introduction almost 20 years ago.

Crucially, it encompasses a deadline with no flexibility.

100 days

Less than an hour after an oxygen tank exploded on Apollo 13, mission control told the crew to isolate a small tank, containing 3.9 pounds of oxygen.^[1] Days later, that tank provided the oxygen to keep the crew alive while landing back on Earth.

If they had left that tank for even another hour the oxygen in it would have been almost gone.

The appointment of a receiver by way of equitable execution has generally been considered a “remedy of last resort”[1] and, for over a hundred years, courts have expressed differing views as to when they could appoint such a receiver.

The Land and Conveyancing Law Reform (Amendment) Bill 2019 (the “Bill”) proposes to broaden the factors that the courts can consider in refusing orders for possession sought by lenders.

The Bill has its roots in the Keeping People in their Homes Bill, 2018, introduced by Kevin “Boxer” Moran T.D., as a private member’s bill. However, the Bill does not go as far as Mr Moran’s bill and, for instance, does not require disclosure of the price paid by a purchaser of the loan.

Background

Overall 2018 has produced a number of positive judgments from the perspective of lenders and insolvency practitioners.

In particular, the courts delivered many useful judgments disposing of numerous challenges to the enforceability of loans and security and, also, restricting abuse of the courts’ processes.

Contemptuous McKenzie Friends

To no great surprise, the Global Corporate v Hale appeal decision has gone against the director. The Court of Appeal handed down the eagerly awaited judgment on 27 November 2018.

Must the legal owner of securitised debt and related security disclose in proceedings it brings that it is a bare trustee for the beneficial owner? In addition, is that trustee obliged to join the beneficial owner as a party to those proceedings?

In our recent article on restructuring options for retail businesses, we outlined how a number of companies in that sector had implemented or were considering Company Voluntary Arrangements (CVAs).

Directors against whom claims for a misfeasance have been intimated often turn to limitation and set off in defence of a request for the repayment or restoration of the relevant sums or property.

Misfeasance and limitation

While overall insolvencies fell in number in 2017 compared with 2016, the last quarter of 2017 showed an increase compared with the previous quarters which had been stable.

In those insolvencies, the vast majority are voluntary liquidations, but there is a trend of retail businesses which are struggling turning to the Company Voluntary Arrangement restructuring option, often accompanied by a managed reduction in operations.