This Act provides for the winding up of IBRC, the appointment of a Special Liquidator and other connected matters. This legislation was signed into law by the President on 7 February 2013.

A recent High Court decision has further demonstrated that failure to comply with the Code of Conduct of Mortgage Arrears (the “Code”) is likely to result in the court refusing to grant an order for possession.

Summary

The Central Bank of Ireland (the “Central Bank”) has declared its intention to strengthen the protection of client assets and has now published its “Review of the Regulatory Regime for the Safeguarding of Client Assets” (the “Review”).

The Review identifies three main objectives which should form the basis of a client asset protection regime:

Summary

In January 2011, the High Court refused to approve an examiner’s rescue plan (“Scheme of Arrangement”) for construction company McInerney Homes Limited (“McInerney”), on the basis that the Scheme of Arrangement was unfairly prejudicial to the secured creditors consisting of a Banking Syndicate of Anglo Irish Bank Corporation Limited, Bank of Ireland plc and KBC Bank plc (the “Banks”).

TheCentral Bank and Credit Institutions (Resolution) Bill 2011 seeks to establish a more permanent and a wider framework for dealing with insolvent banks and banks in financial difficulty. It is intended that the legislation would replace and extend the provisions contained in the Credit Institutions (Stabilisation) Act 2010.

The new Bill was published to meet the end of February deadline set under the terms of the EU-IMF Financial Support Agreement.

Introduction

Prior to 25 March 2011, there was no judicial decision in Ireland on whether the holder of a floating charge could validly improve its position in the order of priority of payments, vis-à-vis preferential creditors, in circumstances where its floating charge crystallises (i.e. converts into a fixed charge) prior to commencement of the winding up of a company.

Toward the end of 2009 the Republic of Ireland’s then government passed legislation which would lead to the creation of the National Assets Management Agency (NAMA). The role of NAMA was a simple one: to remove toxic debt from the books of the Irish banks to assist in attempts to revive the national economy. The security would be acquired at a discount and purchased with Government backed bonds. In the first phase of NAMA (focusing on mortgages and other secured facilities with a minimum value of £20m) over £80bn in toxic debts were acquired.

Overview

In the recent High Court decision of McInerney Homes Limited, the court has ruled for the first time that proposals for a scheme of arrangement (the “Scheme”) entailing payment to a secured creditor of a written down sum in full satisfaction of its debt, could be approved. However, on the facts of the case the court held that the objecting secured creditors would be unfairly prejudiced if they were required to accept the sum proposed to be paid, and, accordingly, refused to approve the Scheme.

As part of the IMF/EU bailout, Ireland will need to put draft legislation before the Dail to facilitate the creation of a legal framework for dealing with financial institutions on the verge of collapse. This legal framework is known as a Special Resolution Regime (SRR).