The Government has issued a press release stating that it has approved the publication of an upcoming Bill providing the legislative basis for a new insolvency process: the Small Company Administrative Rescue Process (“SCARP”). The announcement follows the publication of the General Scheme of the Bill last month and its indications that it would be prioritising this legislation.

General Scheme Published.

The General Scheme of the Companies (Small Company Administrative Rescue Process and Miscellaneous Provisions) Bill 2021 was published this month. When enacted, this Bill will provide the legislative basis for a new corporate restructuring process that will be available to small companies: it is the Small Company Administrative Process (SCARP).

A General Scheme sets out the proposals for the text of a forthcoming Bill and the Government has granted approval for the priority drafting of this legislation (as discussed here).

Nordic Aviation DAC [2020] IEHC 445

In late 2020 the Commercial Division of the High Court approved a Scheme of Arrangement (Scheme) in respect an Irish-based aircraft leasing business Nordic Aviation Capital (NAC). The approved Scheme is of particular interest as it was recognised in the EU, UK and USA. NAC had secured and unsecured creditors in those jurisdictions on foot of loan or debenture instruments which were subject to New York, UK or German law.

The Minister of State for Trade Promotion, Digital and Company Regulation, Robert Troy TD, announced earlier this week the priority drafting of new legislation to introduce a new restructuring process. The Companies (Small Company Administrative Rescue Process and Miscellaneous Provisions) Bill 2021 will provide the statutory footing for what is now proposed to be termed the Small Company Administrative Rescue Process (“SCARP”).

Background

Most companies now hold large volumes of personal data – it is almost inevitable due to the interplay between technology and business. This includes companies that become insolvent, but what obligations does a liquidator have in relation to the personal data held by a company?

Insolvency relief extended to 31 December 2020

On Sunday, the Federal Government announced that it will extend until the end of the year insolvency relief measures which were put in place from March 2020 as part of its response to the COVID-19 pandemic which were due to expire on 25 September 2020.[1]

Some businesses may soon (and indeed already) be faced with sudden cash flow and liquidity issues as a result of the sudden economic disruption caused by the COVID-19 pandemic.

Some of these businesses may be well advised to first seek to renegotiate arrangements with creditors whilst others may require formal court protection from creditors to assist them while arrangements with creditors are being put in place.

The three main legal avenues which are available to businesses seeking to restructure their debt under Irish law are as follows:

Covid-19 is top of the agenda for businesses globally — and for good reason.

It has now been classified as a worldwide pandemic and numbers of those affected are on the rise each day. It has already had some devastating effects on the markets and now with some countries being on complete lockdown, issues such as survival of businesses and trading while potentially becoming insolvent need to be seriously considered by companies and their directors.

The dialogue is changing yet is the law enabling the practical change Directors need?

Achieving significant cultural shift in any business environment is no easy task, so it’s by no means ground-breaking to declare that after 1 year in operation, it still cannot be said that the new “Safe Harbour” legislation has resulted in a cultural change among directors.