Each week we are seeing stories in the news about construction companies becoming "insolvent", going into "liquidation" or having "administrators" appointed. But what do these terms mean? Insolvency is a complex area of law with its own terminology, so we've broken down what all the terms mean below.
What is insolvency and what happens to a company when it is insolvent?
Insolvency and Asset Recovery partner Tim Symes appeared on Sky News’ Business Live with Ian King as the latest government figures revealed that company and individual insolvencies in England and Wales remain close to an all time high.
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A recent High Court decision in Mac Interiors[1] determined whether a company needs to be formed and registered in this jurisdiction in order to enter into the examinership rescue process.
Mac-Interiors Limited (the "Company”), which has its registered office in Newry, Co. Down, Northern Ireland, presented a petition to the Irish High Court for the appointment of an examiner. Where the registered office of the Company is outside Ireland it does not fall within the definition of a 'company' under the Companies Act, 2014 being one which is formed and registered within the State.
Claimant law firms are working hard to develop routes for holding parent companies and their boards responsible for trading activities carried out through subsidiary companies. The recent decision in Aston Risk Management v Jones and others provides clarity on when a registered director of a parent company can be found to be a de facto director of an operating subsidiary.
Companies registered in Myanmar can be voluntarily wound up by its shareholders or creditors or compulsorily wound up by a court order. The voluntary winding up is more common and easier than the compulsory winding up. The key legislations governing the company liquidation are the Insolvency Law 2020 and the Insolvency Rules 2020.
Procedures
A floating charge debenture holder has the advantage that they can enforce their security by appointing their choice of administrators. This is a powerful and useful tool for lenders but is subject to the caveat that the debenture has to be “qualifying”.
On 11 July 2023, Mr Justice Michael Quinn delivered his judgment in the matter of Mac-Interiors Limited (High Court Record No. 2023/90 COS) (the “Company”), which confirmed and clarified ‘a significant and previously undecided point’ regarding the jurisdiction of the Irish courts to appoint an Examiner to a non-EU registered company with its centre of main interests (“COMI”) in Ireland. McCann FitzGerald act for the Company which brought the application.
A previously unsettled aspect regarding the High Court’s (Court) jurisdiction to appoint an examiner to a company which is not formed or registered under the Companies Act 2014 (2014 Act), has been considered in the recent case of In the matter of MAC Interiors Ltd [2023] IEHC 395.
„Lieber den Spatz in der Hand als die Taube auf dem Dach“ ist eine alt Redewendung. In anderen Ländern lautet das Sprichwort: "Ein Vogel in der Hand ist besser als zehn in der Luft". Auch in Italien wir bei diesem Sprichwort auf Geflügel abgestellt: "Besser ein Ei heute als ein Huhn morgen." Die Bedeutung der Sprichwörter ist identisch. Man sollte sich mit einem kleinen, aber sicheren Vorteil zufrieden geben, selbst wenn es so erscheint, als wäre dies nicht sehr viel wert.