BMR Slendertone SARL and Slendertone Distribution Inc are wholly owned subsidiaries of Bio Medical Research Limited, an Irish incorporated company involved in the manufacture of electronic muscle stimulation toning products in over 20 countries. Following an unsuccessful examinership, on 2 June 2022 Orders were made winding up the Irish company and appointing a liquidator.

In a recent judgment, which provides useful clarification to liquidators of companies, the High Court has held that section 631 of the Companies Act 2014 (the “Act”) does not confer a free-standing jurisdiction to order disclosure of information or documentation. Furthermore, the Court held that the inspection right conferred by section 684 of the Act cannot be used as a vehicle for carrying out a “fishing expedition” of a wide range of documents.

Background

On Aug. 30, 2021, in a significant decision that paves the way for additional substantial recoveries for the victims of Bernard L. Madoff’s Ponzi scheme, the Second Circuit Court of Appeals preserved the ability of Irving H. Picard, SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS), to pursue $3.75 billion of stolen customer property currently in the hands of participants in the global financial markets.

This briefing was originally published on 27 July 2021 following the enactment of the Companies (Rescue Process for Small and Micro Companies) Act 2021. The Act was commenced on 8 December 2021.

Introduction

Examinership is a well-established corporate rescue mechanism for ailing corporates and groups. It combines flexibility with a high degree of commercial and procedural certainty for all involved. It is a process which has evolved with the different economic cycles in Ireland since its inception in 1990 and has responded to downturns in different sectors.

Now that the UK has left the EU and the transition period ended on 31 December 2020, this briefing considers the key points of the legal and regulatory landscape from the perspective of Ireland.

Deal or no-deal?

In effect, there is both. The December 2020 EU-UK Trade and Cooperation Agreement¹ (the “TCA”) includes a ‘deal’ so far as concerns EU-UK trade in many types of good. However, the TCA makes little provision for trade in services and so, broadly, it is ‘no-deal’ as regards most types of service.

On January 12, 2021, the Department of Justice (the “DOJ”) settled its first civil action for alleged fraud against the Paycheck Protection Program (the “PPP”) – the primary lending program under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act for small businesses negatively impacted by the COVID-19 pandemic.

The High Court has recently struck out proceedings against a defaulting debtor where the bank made a unilateral commercial decision to delay to allow her co-debtor to recover financially so increasing its prospect of recovery.

Background

In Bank of Ireland v Wilson,¹ the bank commenced summary proceedings against the defaulting debtors in 2012. The debtors, who were jointly and severally liable on the debt, had been in a relationship but were now estranged.

Over the past four years, midstream firms have struggled to adapt their long-standing practices and adjust their long-held expectations, which were fundamentally disrupted by the outcome of the landmark bankruptcy case, In re Sabine Oil & Gas. Midstream providers have since developed and relied on certain mechanisms and carefully drafted contract language in order to bind upstream companies and their successors in interest to obligations and restrictions contained of midstream agreements.

When a business becomes insolvent, all of the creditors of the business are at risk, including its landlords. As COVID-19 continues to challenge businesses in Ireland and abroad, two recent decisions of Mr Justice McDonald in the High Court offer a timely reminder of the standards which tenants must meet when seeking to compromise their commercial lease obligations and the importance of procedural fairness for landlords affected by tenant insolvency.

The New Look case¹