In the matter of Cognotec Ltd (in receivership)

Section 60(14) provides that a transaction in breach of section 60 is voidable against any person who had notice of the facts which constitute the breach.

The company sought to void the debenture which secured the loan on the basis that section 60 had not been complied with and the receiver appointed on foot of the debenture brought a motion for directions.

The court held that:

Overview

In the recent High Court decision of McInerney Homes Limited, the court has ruled for the first time that proposals for a scheme of arrangement (the “Scheme”) entailing payment to a secured creditor of a written down sum in full satisfaction of its debt, could be approved. However, on the facts of the case the court held that the objecting secured creditors would be unfairly prejudiced if they were required to accept the sum proposed to be paid, and, accordingly, refused to approve the Scheme.

As part of the IMF/EU bailout, Ireland will need to put draft legislation before the Dail to facilitate the creation of a legal framework for dealing with financial institutions on the verge of collapse. This legal framework is known as a Special Resolution Regime (SRR).

The continuing harsh economic conditions see more and more businesses going into examinership. Examinership has serious implications for landlords.

Toward the end of 2009 the Republic of Ireland’s then government passed legislation which would lead to the creation of the National Assets Management Agency (NAMA). The role of NAMA was a simple one: to remove toxic debt from the books of the Irish banks to assist in attempts to revive the national economy. The security would be acquired at a discount and purchased with Government backed bonds. In the first phase of NAMA (focusing on mortgages and other secured facilities with a minimum value of £20m) over £80bn in toxic debts were acquired.

On 25 March 2011 the High Court delivered a judgment concluding that a notice of crystallisation served by a bank (who held fixed and floating charges) on three corporate borrowers shortly before they were placed into liquidation did not alter the order of priorities.

InJ.D. Brian Ltd (in liquidation) & Others the High Court held that, where a floating charge crystallised prior to the commencement of a winding-up, the preferential creditors still had priority pursuant to in section 285 of the Companies Act 1963 over the holder of what had become a fixed charge.

In this recession like no other, enforcement over complete and incomplete residential and other property developments is a common scenario faced by both bank and Insolvency Practitioner alike. The dilemma initially appears quite stark; Should the bank advance further monies to complete out developments in order to maximise realisations or sell the site "as is" to another developer but at a significantly discounted price? The purpose of this article is to consider the issues which warrant consideration before devising an enforcement strategy in relation to incomplete developments.

The Central Bank is working on a proposal, agreed with the other authorities as part of the package of measures, to submit a revised re-structuring proposal in compliance with EU competition law for Anglo Irish Bank. The objective is to submit an agreement by the end of January 2011.

Ireland has a temporary insolvency process known as “court protection” and commonly called examinership. This provides a breathing space within which a court will determine whether parts of the business can survive after restructuring. This may entail existing leases being disclaimed. The recent case of Bestseller Retail Ireland Limited gives an interesting example of how the court will exercise its discretion in considering an application to disclaim a lease.

Background