In Harrington v Purdue Pharma,¹ the United States Supreme Court held that so-called “non-consensual third-party releases” were not permitted in restructuring plans proposed under Chapter 11 of the US Bankruptcy Code. A “third-party release” arises where creditors are asked to vote on a restructuring plan or scheme which not only proposes to release the debtor company (i.e. the company that has petitioned for bankruptcy or is proposing the scheme) from all liability but to also release other third parties from any associated liability.

The Employment (Collective Redundancies and Miscellaneous Provisions) Act 2024 (the “Employment Act”) was signed into law on 9 May 2024 albeit the provisions have not yet commenced. The General Scheme of Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024 (the “Companies Bill”) was published in March this year and is expected to be enacted later this year. Both make significant changes to the restructuring and insolvency regime. We will continue to keep you apprised of developments regarding the commencement of the Act.

On 11 July 2023, Mr Justice Michael Quinn delivered his judgment in the matter of Mac-Interiors Limited (High Court Record No. 2023/90 COS) (the “Company”), which confirmed and clarified ‘a significant and previously undecided point’ regarding the jurisdiction of the Irish courts to appoint an Examiner to a non-EU registered company with its centre of main interests (“COMI”) in Ireland. McCann FitzGerald act for the Company which brought the application.

On 30 May 2023, Mac-Interiors Limited (the “Company”), a private limited company incorporated and registered in Northern Ireland, but with its COMI in Ireland, presented a petition seeking the appointment of an examiner. On the same day, orders were made, amongst other things, appointing Kieran Wallace of Interpath Advisory as examiner on an interim basis pending the hearing of the Petition.

The High Court has made an order appointing an inspector to investigate alleged fraud and unlawful activity by a company. It appears that this is the first time the order has been made on the application of a creditor seeking to recover its “investment”.

Part 13 of the Companies Act 2014¹ sets out the mechanism for the statutory investigation of the affairs of a company. Chapter 2 provides for the court appointment of an inspector to carry out a fact-finding investigation and report to the court. This is a discretionary relief.

A recent High Court decision has a useful discussion of the law on common interest privilege in Ireland.

In these proceedings,¹ the plaintiff trustee in bankruptcy sought to recover funds from the defendant. The trustee claimed that these funds formed part of a bankrupt’s personal property and should be recovered for the benefit of his creditors.

Yesterday, 17 October 2022, Revenue announced a significant update to the Debt Warehousing Scheme (DWS). Under the DWS, taxpayers with deferred liabilities had until the end of 2022 (and for certain qualifying business, 30 April 2023) to either settle their outstanding liabilities (at 0% interest) or to establish a Phased Payment Arrangement with Revenue (at 3% interest). In light of the current challenging economic environment, Revenue have now extended this deadline to 1 May 2024.

In both jurisdictions the general consensus was that where a company is insolvent, the fiduciary duty of its directors to act in the interest of the company (Irish law), or in the way they consider, in good faith, would be most likely to promote the success of the company in the interests of its members as a whole (English law), altered such that directors were required to treat creditors' interests in priority to shareholders' interests. Directors must consider the interests of creditors as a whole, and not just the interests of any individual creditor or class of creditors.

The director of an insolvent company appealed a restriction order made against him. The order prevented the appellant from acting as a company director or secretary for a 5-year period under section 819 of the Companies Act 2014 (the “2014 Act”). The Court of Appeal dismissed the appeal as the appellant failed to satisfy the court that he acted responsibly in the conduct of the company’s affairs.

The EU Directive on Preventive Restructuring Frameworks (the“Directive”) precipitated a pan-European review by Member States of their corporate restructuring statutes. Several Member States (including Germany and the Netherlands), as well as the United Kingdom, made sweeping changes to their insolvency processes, in some cases introducing entirely new restructuring mechanisms. By contrast, Ireland preserved its examinership regime, introduced over 30 years ago.