The Personal Insolvency Bill has now passed through the Dail and will commence in the Seanad. The Minister for Justice has commented that the intention is still to have the Bill enacted by Christmas.

The Personal Insolvency Bill has completed its passage through the Dáil (lower house of the Oireachtas (the Irish Parliament)). The Bill is now moving through the Seanad (upper house of the Oireachtas), where its provisions are subject to debate and amendment. The Minister for Justice recently confirmed his intention that the Bill will become law by Christmas.

The Bill provides for: 

In a recent High Court case, a liquidator sought an order declaring that certain payments made by a company prior to its liquidation were a ‘fraudulent preference’ and invalid. The company had made payments to its overdrawn bank account which was personally guaranteed by one of its directors. It was alleged that the payments were made in order to reduce the company’s overdraft and therefore, the director’s own personal exposure under the guarantees.

An application by Quinn family members to have court-appointed receivers removed and their solicitors discharged on the basis of an alleged conflict of interest and partiality has been dismissed by the Commercial Court.

The Personal Insolvency Bill has completed its passage through the Dáil and the Seanad (the Irish Houses of Parliament) and will now be passed to the President for signing into law.

The new legislation has been described by the Minister for Justice as “the most radical and comprehensive reform of our insolvency and bankruptcy law and practice since the foundation of the State.”

It provides for:

This Briefing contains a general summary of developments and is not a complete or definitive statement of the law. It also updates the Briefing published in July 2012 on the Personal Insolvency Bill. Specific legal advice should be obtained where appropriate.

New legislation alters the law and procedures of personal insolvency in radical ways. The Personal Insolvency Act 2012 establishes an independent Insolvency Service of Ireland and introduces new insolvency procedures for addressing unsecured debts (of any value) and secured debts (up to €3 million in aggregate but without limit in the case of agreement). Current bankruptcy laws are amended, including a reduction of the bankruptcy term from 12 years to 3 and the carve-out of pension assets from the bankrupt’s estate.

On 26 December last, the Personal Insolvency Act 2012 was signed into law by the President.

The various provisions of the Act will come into force through commencement orders which will be made by the Minister for Justice. It is expected that certain sections of the Act relating to its Establishment Day and related provisions, will be commenced shortly.

The remaining provisions will then come into operation on a phased basis under Section 1(2) of the Act, as designated by orders to be made by the Minister.

The Personal Insolvency Bill was signed into law by the President on 26 December 2012.

The Act provides for:

On 9th January 2013 the National Pensions Reserve Fund (NPRF) announced the creation of three new funds to provide equity, credit and restructuring / insolvency investment in the Irish SME sector.

SME Equity Fund