An order providing for the commencement of certain provisions of the Personal Insolvency Act 2012 brings the following three new debt settlement arrangements into operation with effect from 31 July 2013:

The High Court has made an order disqualifying the two directors of Mossway Limited (In Liquidation) for a period of 12 months.

Background

The principal business of the company had been the provision of haulage services with a warehousing and distribution facility. On 3 June 2011, the Revenue Commissioners presented a petition to wind up the company on the basis that it was unable to pay its debts as they fell due. The Court made the order sought and appointed an Official Liquidator.

The Court of Appeal’s decision in the matters of Nortel GMBH and Lehman Brothers International (Europe) (both in administration) and other companies has been overturned by the Supreme Court. Liabilities imposed on insolvent companies by the Pensions Regulator (“tPR”) will not be treated as an expense of the insolvency, which would be payable by the office holder in advance of making payment of his own remuneration or to floating charge holders. The liability will rank as an unsecured debt rateably with all other unsecured creditors.

The Courts and Civil Law (Miscellaneous Provisions) Act 2013 was signed into law by the President on 24 July 2013.  While certain sections of the Act commenced immediately on its signing into law, other provisions have yet to be commenced by ministerial order.

A summary of the key changes brought about by the Act are set out below.

Increase in the Monetary Jurisdiction of District and Circuit Courts

The Act increases the monetary jurisdiction of:

The majority of businesses have periods of stress and distress during their life cycle. The keys to managing these periods to achieve a successful profitable business are recognition, decision and implementation.

In most cases, management are aware (from available internal management information) of issues arising before they do in terms of a potential reduction in revenue or increase in cost. Once these periods are recognised management can move to address them by taking decisions to manage the situation to a positive outcome.

The judgment handed down on 6 June 2013 by the Court of Appeal in the case of The Trustees of the Olympic Airlines SA Pension and Life Assurance Scheme v Olympic Airlines SA [2013] EWCA Civ 643 reversed a High Court decision made in May 2012 that a winding up order could be granted in the UK in respect of Olympic Airlines, the Greek national airline, which was in liquidation in Greece as a result of it receiving illegal state aid and the privatisation of the airline business.

The Landlords of units occupied by Game have been given permission by the Court to appeal to the Court of appeal against the principles laid down in Goldacre (Offices) Ltd v Nortel Networks UK Ltd (In Administration) [2009] EWHC 3389 (Ch) [2010] Ch 455 that rent falling due before the commencement of an administration does not fall to be paid as an expense of the administration.

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.