With the increase in global trade and business, often involving complex corporate structures in multiple jurisdictions, we expect to see a significant increase in cross-border insolvency and restructuring matters in coming years. This is especially the case with rapid advancements in technology and digital change driving “borderless” transactions and investments in every industry.
An extension to the Debt Warehousing Scheme has been announced by the Revenue Commissioners.
The Debt Warehousing Scheme (DWS) was introduced during the COVID-19 pandemic to provide support to businesses that were experiencing liquidity and trading difficulties. It has permitted businesses to “warehouse” or defer payment of their tax debts for a specified period.
The corporate insolvency aspects of Directive (EU) 2019/1023 on preventive restructuring were recently implemented in Ireland through the European Union (Preventive Restructuring) Regulations 2022.
Ordinarily, in civil proceedings a successful party in litigation will be awarded their costs.
This is known as the legal rule or principle that costs follow the event. But a decision of the Court of Appeal in 2021 suggests that this rule may not necessarily apply in examinership proceedings.
Since the Veolia case in the mid 2000s the Irish courts have taken the view that the costs follow the event rule need not necessarily be followed in every instance and that they have a certain discretion to depart from this default rule.
The existence of a personal guarantee over a debt may affect the enforceability of that debt after a company has gone through an examinership process.
A creditor’s ability to enforce a debt subject to a guarantee after a period of examinership is dependent upon that guarantor having been granted a right to vote at the creditors’ meeting approving the scheme of arrangement.
The new formal rescue process for small and medium sized companies, SCARP, is now formally a part of Irish law. The legislation underpinning the new rescue process was officially commenced on Tuesday 7 December 2021.
In Pharmagona Limited v Taheri,(1) the High Court refused to seal and issue a contempt application as the breach, if it had occurred, was only technical, and it was therefore inappropriate for the application to succeed.
Facts
The High Court recently refused a winding up petition brought by a landlord against a tenant company that had not paid rent on its commercial premises for more than a year.
Lestown Property Limited v The Companies Act 2014 [2021] IEHC 513.
A dispute arose between a landlord, Lestown Property, and a tenant that operated a Leisureplex in Charlestown Shopping Centre. The Leisureplex was only accessible through the lobby of an adjacent cinema. The cinema was leased to a separate entity and was closed during the COVID-19 pandemic.
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.