InDellway and Ors. v National Asset Management Agency & Ors., a number of companies and Paddy McKillen appealed a decision of the High Court in relation to the purported acquisition of €2∙1 billion in loans to the appellant companies by NAMA.

The appeal was brought on five grounds:

On 25 March 2011 the High Court delivered a judgment concluding that a notice of crystallisation served by a bank (who held fixed and floating charges) on three corporate borrowers shortly before they were placed into liquidation did not alter the order of priorities.

On 22 February the European Council published guidelines for the rescue and restructuring of financial institutions. The objective of the initiative is to maintain a level playing field between member states granting state aid measures for the rescue and/or restructuring of a financial institution in difficulty.

In Re McInerney Homes Limited

In the McInerney case, the company and the examiner sought to have schemes confirmed which would result in an immediate payment to a banking syndicate of €25 million. The banking syndicate contended that the discounted current value which they expected to recover from their security outside any schemes was €50 million.

Kerr & Ors v Conduit Enterprises Ltd

In 1997 the two directors of the company and others purchased a building and leased it to the company. Ownership of the company changed hands a number of times and, in 2008, the then new owners purported to void the lease on the basis that it had never been approved by shareholder resolution. The landlords issued proceedings seeking a declaration that the lease was valid.

The court held that:

In a series of cases the High Court has:

In January 2010 an interim examiner was appointed to Missford Limited, which operated the Residence Club, a private members club in St. Stephen’s Green.

In a written judgment on the costs and expenses of the interim examiner, the court held that the interim examiner “simply did more with the best of motives than his warrant permitted”. The court proceeded to refuse the interim examiner’s application for remuneration in respect of any work carried out in excess of his statutory powers.

In the matter of Cognotec Ltd (in receivership)

Section 60(14) provides that a transaction in breach of section 60 is voidable against any person who had notice of the facts which constitute the breach.

The company sought to void the debenture which secured the loan on the basis that section 60 had not been complied with and the receiver appointed on foot of the debenture brought a motion for directions.

The court held that:

In the Matter of Bell Lines Limited (In Liquidation)  

That decision has effectively been relied on since 2006 for the proposition that, except for the Social Insurance Fund, a party advancing monies for the payment of remuneration falling due before the commencement of an insolvency process but actually paid after such commencement is not entitled to subrogate to the employees’ preferential claims.

The Appeal

The Law Reform Commission (LRC) launched its Report on Personal Debt Management and Debt Enforcement, on 16 December 2010, at its Annual Conference. The Report makes 200 recommendations for reform, and also contains a draft Personal Insolvency Bill. Reform of personal debt law must be introduced next year to comply with the Government's agreement with the International Monetary Fund and the European Central Bank.

The Irish President has signed the Credit Institutions (Stabilisation) Act 2010 (the Act) into lrish law. The Act grants far reaching and unprecedented powers to the Irish Minister for Finance to facilitate the restructuring and stabilisation of the troubled Irish banking sector.