On 23 August 2013, the High Court granted the petition of Bank of Ireland to have Brian O’Donnell and his wife, Mary Patricia O’Donnell adjudicated bankrupt. One of the issues before the Court was the appropriate date for determining the centre of main interests (COMI) of a debtor. Two possibilities were put forward: (i) the date of presentation of the bankruptcy petition to the Examiner’s Office of the High Court; or (ii) the date of the hearing of the application by the High Court.
The Minister for Justice, Equality and Defence, Alan Shatter, TD, announced the commencement of section 4 of the Personal Insolvency Act 2012 dealing with bankruptcy on 3 December 2013. Other elements of the act, including the introduction of alternative insolvency arrangements such as personal insolvency arrangements, have already been introduced.
Ireland’s new insolvency regime came into effect on 3 December 2013. The new regime revamps the existing bankruptcy laws and brings Ireland closer into line with our European neighbours. It focuses on negotiating an arrangement with creditors where possible, with bankruptcy as a last resort.
This update focusses upon two recent High Court decisions dealing with (respectively) the ability of the court to retrospectively extend court-appointed receiverships, and the issue of whether COMI had shifted to England for a German national seeking bankruptcy here.
Extension of court-appointed receiverships
The case of Bank of Ireland v (1) Edeneast (2) Cosgrove and (3) Maguire (17/09/2013) concerned an application by the bank to retrospectively continue and extend the appointment of a courtappointed receiver.
The Courts and Civil Law (Miscellaneous Provisions) Act 2013 was signed into law by the President on 24 July 2013. While certain sections of the Act commenced immediately on its signing into law, other provisions have yet to be commenced by ministerial order.
A summary of the key changes brought about by the Act are set out below.
Increase in the Monetary Jurisdiction of District and Circuit Courts
The Act increases the monetary jurisdiction of:
The Personal Insolvency Act 2012 (the “PI Act”) was signed into law on 26 December 2012 and introduces significant changes to the personal insolvency regime in Ireland, as described in our previous client briefing concerning the PI Act (issued in December 2012 and available on our website). All provisions of the PI Act, other than Part 4 which relates to bankruptcy, have now been commenced and it is expected that debtors will shortly be able to avail of the new insolvency measures.
The Personal Insolvency Act 2012 was signed into law on 26 December 2012. The Act provides for the introduction of three new non-judicial debt settlement arrangements and reforms to the current bankruptcy legislation.
How will it impact on pensions?
Under the Bankruptcy Act 1988, the general rule is that all property “belonging” to a person adjudicated bankrupt on the date of adjudication vested in the Official Assignee. The extent to which this rule extended to pension assets depended on the type of pension vehicle the person being declared bankrupt participated in and the actual terms of the pension scheme or policy.
The 1988 Act has now been amended to include detailed and prescriptive provisions relating to the treatment of pension assets on bankruptcy.
The proposed Personal Insolvency Bill, published on 25 January 2012, provides for significant changes to the personal insolvency regime in Ireland.