A number of recent High Court decisions suggest an increase in the number of interlocutory applications being brought by receivers seeking to obtain vacant possession of the properties over which they have been appointed.
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.
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.
In its decision in In re Davis Joinery Ltd [2013] IEHC 353, the High Court identified the difficulties that employees of corporate employers may face when their employer ceases trading without taking any steps to formally wind-up the company.
The Government, has announced that it is examining potential changes to the law to clarify the position of residential tenants where a receiver is appointed to rented accommodation. Concern has been expressed that there is a lack of clarity as to whether a receiver appointed to such a property assumes any of the responsibilities of the landlord or whether he should be solely concerned with recovering value from the asset, as would be conventional.
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.
Borrowers are increasingly seeking to challenge or frustrate the validity of an appointment of a receiver on technical grounds. While each case will be determined on its own merits and facts, a recent decision of the High Court is illustrative of the Court’s attitude towards some such arguments.
The Companies (Miscellaneous Provisions) Act, 2013 (the “Act”) was signed into law on 24 December 2013 and has introduced what has become colloquially referred to as “examinership-lite”, or what it is hoped will be a new SME-friendly examinership regime. Examinership is the legal mechanism by which an ailing but potentially viable company can be rescued.
The Act introduces a number of amendments to existing company law legislation, the most significant of which alters the regime in respect of the role of the Circuit Court in the examinership process.
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.
124 members of the Element Six pension scheme are suing the trustees of the scheme in the Commercial Court for alleged breach of duty arising out of the decision to close the scheme with a significant deficit. The members claim that the trustees breached their duty to the members by failing to demand that the employer fully fund the deficit in the scheme before wind up. A number of general issues relating to the obligations of trustees were raised during the 3-week hearing of the case.
Background