There are certain circumstances where liquidators can be held personally liable for costs orders made in proceedings taken by them.

Under the so called “Ballyrider Principles[1]”:

The Irish High Court has determined that the liquidation of an Irish aircraft leasing company, which was a 100% subsidiary of a Russian company expressly subject to EU sanctions, rebuts the presumption that the company was controlled by the Russian parent for the purpose of EU sanctions.

This enables the liquidators to deal with the assets without costly and time-consuming derogation applications.

Background

A combination of continued high prices and rising interest rates has heaped pressure on already struggling businesses through the summer of 2023. The challenging circumstances have lead to an overall rise in creditors’ voluntary liquidations (CVLs) compared to both earlier months and the previous year, though the picture borne out by the statistics is more complicated than might be expected.

Insolvency and Asset Recovery partner Tim Symes appeared on Sky News’ Business Live with Ian King as the latest government figures revealed that company and individual insolvencies in England and Wales remain close to an all time high.

Recent economic challenges have triggered significant developments for household name companies in 2023.

Irish company law provides that if a charge granted by a company is not registered in the Companies Registration Office (CRO) within 21 days of its creation, it is void against a liquidator and any creditor of the company. There is a duty imposed on a company which grants a charge to register the charge in the CRO but the creditor taking the charge can also do so.

Diamond Rock Developments Ltd (the Company) granted a mortgage over a property. That mortgage was registered in the Land Registry but was not registered in the CRO.

If you supply goods, the simplest step that you can take to reduce your exposure to a customer’s insolvency is to use effective retention of title (RoT).

However not all RoT clauses are effective and we see many RoT claims rejected in insolvency.

By default, once you sell goods on credit:

• the goods belong to the customer; and
• the customer owes you the purchase price.

This means that if an insolvency practitioner (IP) is appointed to the customer:

The latest insolvency statistics in the UK make for grim reading. Per the government’s official assessment, 1,964 corporate insolvencies took place in December 2022, 32% higher than in the same month in the previous year and 76% higher than the number registered three years previously pre-pandemic. With inflation and energy costs remaining high and government support rolling back, companies will be taking whatever steps they can to remain in business.

Corporate Enforcement Authority Issues Helpful Guidance Note

The Preventative Restructuring Directive

In July 2022, the European Union (Preventive Restructuring) Regulations 2022 (the Regulations) transposed the requirements of EU Directive 2019/1023 (the Preventative Restructuring Directive) into Irish law.

Certain of the consequential amendments to the Companies Act 2014 (the Act) relate to the duties and responsibilities that directors of companies have in circumstances of financial difficulty and/or insolvency.

Corporate insolvency numbers continued to appear artificially low in 2022. The expectation is that they will rise once businesses need to deal with the aftermath of Government pandemic supports and, in particular, start to pay warehoused taxes.