Given the commonality in today’s marketplace of complex corporate capital structures that employ multiple layers of secured debt, existing and potential creditors need to be increasingly aware of the rights and limitations provided for in subordination or intercreditor agreements. These agreements are often entered into between the existing lender or debt holder and a new lender. They often restrict the actions of subordinated lenders upon the debtor’s filing for bankruptcy protection, including denying their right to vote on the debtor’s plan of reorganization.

The High Court has approved a Scheme of Arrangement in respect of Monsoon Accessorize Ireland Limited which entered into the examinership process in March 2013 and was under the Court’s protection for the maximum period of 100 days. This period afforded the company time to attract investment and allow for its restructuring so that it could continue to survive as a going concern after the protection of the Court was lifted.

As a result of the restructuring, a number of stores will close, however, the Scheme of Arrangement should result in approximately 200 jobs being saved.

The EU Court of Justice has held that the Irish State is obliged to protect the pension benefits of former employees of Waterford Crystal who were left with only 18-28% of their pension benefits when the company became insolvent.  

Recent attempts by Bank of Scotland plc. to enforce its security over the company operating Foley’s Bar and O’Reilly’s Bar in Dublin city centre have been frustrated following various challenges in the High Court culminating in the appointment of an examiner.

Bank of Scotland plc. appointed a receiver to The Belohn Limited, the company operating the two bars, in October 2012. The Belohn Limited and its parent company, Merrow Limited, are reported to owe the bank in the region of €4 million and €1 million respectively.

The Central Bank has announced a pilot scheme for the restructuring of secured and unsecured distressed consumer debt across multiple lenders. The scheme aims to prevent borrowers entering the insolvency process by agreeing debt solutions with various lenders.

The scheme will not apply to business debt, debt involving buy-to-let properties or debts where the borrower is deemed to be “non-co-operating” under the Code of Conduct on Mortgage Arrears.

In a recent decision¹, the United States Bankruptcy Court for the Southern District of New York found the standard for sealing under § 107 of the Bankruptcy Code was not met and declined to seal a settlement agreement, despite requests from the Chapter 7 trustee (the "Trustee") and the counterparties to the settlement agreement to do so. Confidentiality was an essential condition of the settlement. In addition, the United States trustee supported the motion to seal, arguing that the standard for sealing had been met.

Recent attempts by Bank of Scotland plc to enforce its security over the company operating Foley’s Bar and O’Reilly’s Bar in Dublin city centre have been frustrated following various challenges in the High Court, culminating in the appointment of an examiner.

The Belohn Limited is the company which operates Foley’s Bar and the adjoining O’Reilly’s Bar. Its parent company is Merrow Limited. The two companies are reported to owe the bank in the region of €4 million and €1 million respectively.

Congress enacted the ordinary course of business defense to the avoidance of preferential transfers to protect recurring, customary transactions in order to encourage the continuation of business with and the extension of credit to a financially distressed customer.

The High Court has recently held that a former employee of a construction company, which was in liquidation, had no reasonable cause of action against the company’s insurer. This was despite the fact that he had obtained judgment for negligence against the employer and the insurance policy covered the employer for such a claim in negligence.