A recent judgment finds a Personal Insolvency Arrangement (the PIA) is not permissible where the term of the restructured loan is likely to exceed the lifespan of the debtor.

The key facts

The PIA in question involved a mortgage term extension of 372 months (ie 31 years) which would have required the Debtor to continue making repayments until she was 98 years of age which is well beyond the Central Bank's recommended age of 70 years of age.

General Scheme Published.

The General Scheme of the Companies (Small Company Administrative Rescue Process and Miscellaneous Provisions) Bill 2021 was published this month. When enacted, this Bill will provide the legislative basis for a new corporate restructuring process that will be available to small companies: it is the Small Company Administrative Process (SCARP).

A General Scheme sets out the proposals for the text of a forthcoming Bill and the Government has granted approval for the priority drafting of this legislation (as discussed here).

The recent restructuring of the Norwegian Group by the Irish High Court helpfully clarifies the application of the Cape Town Convention in Irish restructuring. It is also an interesting case study regarding the circumstances in which the Irish courts will restructure a group of companies, which is not headquartered in Ireland.

This case is significant as it involved the appointment of an Examiner to Norwegian Air Shuttle ASA (NAS) a company incorporated in Norway with its centre of main interests in Norway rather than Ireland.

The Norwegian Air Group comprised 65 companies and the protection of the Court was sought in respect of 5 Irish incorporated companies (the Petitioners) and NAS the ultimate parent company in the Group.

Almost everyone knows the tale of Kodak. After over 100 years of market dominance in film and camera production, it was forced into bankruptcy in 2012 after Kodak’s management failed to understand the threat of digital photography on their business.

A similar story befell Blockbuster. A market leader in the late 1990s, by 2010 its business was in tatters as Netflix and online streaming soared in popularity.

Two recent High Court judgments could benefit an estimated 20,000 people with long-term mortgage arrears in Ireland. The judgements show how workable solutions can be found without having to go to Court, with significance being placed on the proposed solutions being reasonably achievable and not strongly opposed by creditors.

Fennell v Personal Insolvency Acts 2012-2015

Nordic Aviation DAC [2020] IEHC 445

In late 2020 the Commercial Division of the High Court approved a Scheme of Arrangement (Scheme) in respect an Irish-based aircraft leasing business Nordic Aviation Capital (NAC). The approved Scheme is of particular interest as it was recognised in the EU, UK and USA. NAC had secured and unsecured creditors in those jurisdictions on foot of loan or debenture instruments which were subject to New York, UK or German law.

Yesterday, the Department of Enterprise, Trade and Employment announced that the Government has approved the extension until 31 December 2021 of the period during which the interim measures introduced under the Companies (Miscellaneous Provisions) (Covid-19) Act 2020 (the 2020 Act) (link to announcement here) will apply.

The Department of Enterprise, Trade and Employment has published the outline of proposed legislation for a dedicated rescue and restructuring framework for insolvent or potentially insolvent small and micro companies – see here.

General Scheme of Companies (Small Company Administrative Rescue Process and Miscellaneous Provisions) Bill 2021 (“SCARP”) just published