The Supreme Court has recently confirmed that a debtor can be adjudicated a bankrupt in Ireland and be subject to the Irish bankruptcy regime notwithstanding that the debtor has already been adjudicated a bankrupt in another jurisdiction, in this case the US.

Background

Introduction

The Supreme Court, in a judgment delivered today, in J.D. Brian Motors Limited, trading as Belgard Motors, (In Liquidation) (and related companies) allowed the appeal of the Official Liquidator, Tom Kavanagh of Deloitte, to set aside two declarations made by Ms Justice Finlay Geoghegan in the High Court in two separate judgments in 2011.

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:

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

By order dated 20 January 2009, the Supreme Court, in the first case on examinership to come before it in over 10 years, allowed an appeal against the order of the High Court dated 13 January 2009 (McGovern J) which refused the petition of Gallium Limited (trading as the First Equity Group) (under the protection of the Court) for the appointment of an examiner and appointed Mr Kieran Wallace of KPMG as examiner of the Company. The Supreme Court delivered its reasoned judgment on 3 February 2009.  

Supreme Court Judgment (ex tempore), 20 February 2009

A return of no goods (nulla bona) no longer required for issue of bankruptcy summons

A decision of the High Court, affirming a rule of practice which required a return of no goods (or a good reason for the absence of same) before it would issue a bankruptcy summons to a creditor, has been successfully appealed to the Supreme Court.  

BACKGROUND

Supreme Court clarifies law in relation to repudiation of leases (Re Linen Supply Ireland Ltd, 10 December 2009)

The Supreme Court has recently clarified the law in relation to a company’s ability to repudiate/disclaim leases during the course of an examinership. Recent decisions of the High Court, including the O’Brien’s Sandwich Bar decision had created uncertainty in this area.

Last week the Supreme Court overturned Mr Justice McGovern's recent decision in the Linen Supply of Ireland examinership that the current legislation does not permit the repudiation of leases in an examinership. The case has now been remitted back to the High Court to consider whether, in the specific case before it, the leases ought to be repudiated in order for a scheme of arrangement to be formulated.

In a recent decision of the Supreme Court in the Matter of Linen Supply of Ireland Limited (the “Company”) and the Companies (Amendment) Act 1990 (as amended), the Court finally clarified the law in relation to a company’s ability to repudiate and/or disclaim leases during the course of an examinership process. Earlier decisions of the High Court, including quite recently the O’Brien’s Sandwich Bar decision, had created uncertainty in this area.

Bell Lines Limited (in Official Liquidation)

LK Shields Solicitors acted for the Secretary of State for the Department of Business Innovation and Skills of the Government of the United Kingdom (the Secretary of State) in a Supreme Court Appeal which raised a succinct technical point in a liquidation.