Midlothian Council v Raeburn Drilling and Geotechnical Limited & Others
One area of practice where clarity by the government will be essential is whether directors are going to be held to all the same standards during this crisis as they are in any other recession.
Overview
The recent approval by the Irish High Court of a scheme of arrangement that restructured US$1.65bn of liabilities of Ballantyne Re plc (Ballantyne) confirms Dublin as one of the most effective restructuring venues in the EU. The detailed decision of Justice Barniville (available here) offers significant precedential value and is a clear endorsement that Irish schemes can be used to implement complex cross border restructurings. The Irish statute governing schemes is very similar to that of England and Wales.
Essence of the Ballantyne scheme:
Cash flow is the life blood of the construction industry, goes the mantra. Construction projects often have long supply chains. When cash stops flowing down the chain, businesses can fail. There is all too much recent evidence of this.
Someone in the chain (say, a main contractor) could seek to provide in a contract that it does not have to pay the party below (subcontractor) until it has been paid by the party above (employer). This is a 'pay-when-paid' clause.
If a transaction by a company amounts to an "unlawful distribution", and the company subsequently goes into liquidation, will an action for recovery of the benefits of that distribution, brought against the directors who authorised the transaction, be statute-barred if it is commenced by the liquidator of the company more than 6 years after the distribution was made?
DOMESTIC
Research on the impact of repossession risk on mortgage default
Terry O’Malley published an economic letter considering whether reducing the risk of repossession resulted in more Irish borrowers defaulting on their mortgages. The letter considers the impact of the ''Dunne judgment'' in 2011 which temporarily removed a bank's ability to lawfully repossess a home. One of the key findings was that borrowers defaulted on mortgages at a higher rate than if the repossession regime at the time was legally upheld.
Introduction
There are two principal mechanisms for the dissolution of a solvent Irish company:
- Voluntary Strike-Off (VSO); and
- Members' Voluntary Liquidation (MVL).
To the extent there are other Irish or EU entities in the group, it may also be possible to dissolve the company by way of merger with another group entity.
In Reilly & Personal Insolvency Acts 2012-2015 [2017] IEHC 558, Baker J, 5 October, 2017, the High Court held that applications to Court under Section 115A of the Personal Insolvency Acts 2012-2015 (the Acts), for approval of a Personal Insolvency Arrangement (PIA) despite its rejection by creditors, must be made by a Personal Insolvency Practitioner (PIP) and not by the Debtor themselves.
Baker J in the High Court has given three recent judgments in matters concerning Section 115A(9) of the Personal Insolvency Acts 2012 – 2015 (the Acts). This Section gives a Court power to review and approve a Personal Insolvency Application (PIA) rejected at a meeting of creditors.
Re JD (a debtor) [2017] IEHC 119, High Court, 21 February 2017
In a High Court decision of 22 May 2017 Baker J rejected a proposal by a secured lender to write down a portion of a debtor couple's mortgage debt and warehouse half of the debt as future repayment of the warehoused part of the loan was not predicated on an ability to repay. Thus, the proposal was capable of creating circumstances amounting to insolvency at the end of the mortgage term in approximately 23 years.
Facts