Summary

The claim against the liquidator was abandoned due to the fact that he was an insolvency practitioner and had no personal responsibility for the present state of the site and there was nothing to suggest that the “liquidator did anything wrong”.  What is involved in the concept of doing nothing wrong is not explained.  Interpreting the risk to liquidators in light of this case and the leading Irish Ispat case (in which a liquidator also escaped clean up costs), liquidators need to carefully consider what actions to take, or not to take, if it transpires that issues arise about unl

In Re: Michael McLoughlin Pharmacy Ltd. The examiner sought the High Court’s approval for a scheme of arrangement which limited his liability for negligence. The secured creditor objected as a matter of principle because such limitations of liability had become commonplace in schemes. The secured creditor made it clear that there was no suggestion of any negligence by the examiner in the particular case.

The court considered:

In an insolvent winding up, preferential creditors are entitled to be paid first from assets subject to a charge which at the time of creation was floating, regardless of whether the floating charge has crystallised at the commencement of the winding up.

InDellway and Ors. v National Asset Management Agency & Ors., a number of companies and Paddy McKillen appealed a decision of the High Court in relation to the purported acquisition of €2∙1 billion in loans to the appellant companies by NAMA.

The appeal was brought on five grounds:

In January 2011, the High Court refused to approve an examiner’s rescue plan (“Scheme of Arrangement”) for construction company McInerney Homes Limited (“McInerney”), on the basis that the Scheme of Arrangement was unfairly prejudicial to the secured creditors consisting of a Banking Syndicate of Anglo Irish Bank Corporation Limited, Bank of Ireland plc and KBC Bank plc (the “Banks”).

Introduction

Prior to 25 March 2011, there was no judicial decision in Ireland on whether the holder of a floating charge could validly improve its position in the order of priority of payments, vis-à-vis preferential creditors, in circumstances where its floating charge crystallises (i.e. converts into a fixed charge) prior to commencement of the winding up of a company.

The Civil Law (Miscellaneous Provisions) Act 2011 was signed into law by the President on 2 August 2011.  The Act provides for certain provisions, concerning private security services, bankruptcy and family mediation services, to come into operation on such days as the Minister for Justice and Equality, by order, appoints. All other provisions of the Act came into force on 2 August.

The Act introduces a number of important reforms across a broad range of areas, including:

In a series of cases the High Court has:

In January 2010 an interim examiner was appointed to Missford Limited, which operated the Residence Club, a private members club in St. Stephen’s Green.

In a written judgment on the costs and expenses of the interim examiner, the court held that the interim examiner “simply did more with the best of motives than his warrant permitted”. The court proceeded to refuse the interim examiner’s application for remuneration in respect of any work carried out in excess of his statutory powers.

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: