A recent decision of the Supreme Court to award legal costs against a director of an insolvent company demonstrates the Courts' approach to directors who do not act in good faith and seek to use litigation through the company for their own personal benefit.

A recent decision of the Irish High Court puts the spotlight on Ireland as a key restructuring venue in the EU.

Mr Justice Barniville's thorough judgment is a clear endorsement of the use of Irish schemes of arrangement to implement complex cross border restructurings.

Part 9 Scheme of Arrangement

The High Court recently considered the scope of an interim examiner's powers in Re M.D.Y. Construction Ltd [2018] IEHC 676.

Binding actions by the Interim Examiner

Of interest to the High Court was the timeline within which certain actions were taken by the interim examiner appointed to M.D.Y. Construction Limited (the Company). Prior to confirmation of his appointment as examiner, the interim examiner entered into a binding investment agreement with a third party to fund proposals for a scheme of arrangement.

In a recent judgement, the Supreme Court has upheld a High Court order for costs against a director of a number of companies (theCompanies) which were involved in proceedings with First Active plc (First Active), despite the fact that the director was not a party to the proceedings.

The Court took the view that the director (Mr Cunningham), who also owned or controlled the Companies, had funded the proceedings and should be held accountable for the costs.

Background to the order for costs

Two significant decisions in relation to personal insolvency applications were made recently in the Dublin Circuit Court and the High Court. The decisions relate to “locus standi”, which means who has the right to bring an application before a court.

Circuit Court case

Receivers are plagued by the registration of lis pendens on lands over which they have been appointed. There is increasing frustration on the part of receivers as the bar to removing alis pendens is considerably higher than that required to register it.

Registering a lis pendens

A recent decision of the Court of Appeal is a useful reminder to receivers that contracts of employment between the company in receivership and employees continue to subsist.

A receiver must properly comply with the termination provisions in a contract of employment and has no additional powers to dismiss an employee over and above what powers the employer entity has to dismiss.

Employee dismissal by receiver

The High Court, in a recent decision, applied new Company Law provisions governing how banks deal with corporate customers who are in the process of liquidation.

Old provision

Letters of demand frequently request a party to comply with certain obligations by “close of business”. However, due to the uncertainty surrounding what this phrase means, the Supreme Court was recently asked to determine what time is close of business. 

Background

A mortgage deed provided that money owed by the borrower to the bank was repayable on demand and that if a demand was not satisfied, the bank could enforce its security by appointing a receiver. 

A termination notice served on a tenant is invalid if it does not specifically state that the landlord intends to enter into a binding agreement to sell the property within three months of the termination of the lease, the High Court held on 5 April 2016.

Details of the Case