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

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.  

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.

The first anniversary of the credit crunch passed in recent weeks and the economic turbulence in this country has been reflected in the sharp increase in the number of insolvencies over the past 12 months.

In a recent judgment, the Supreme Court ruled that both the debtor and any counterparty performing the legal act have knowledge of prejudice to creditors if, at the time of performing the legal act, the bankruptcy of the debtor and a shortfall in the bankruptcy estate is foreseeable. This judgment confirms the Supreme Court's decision of 22 December 2009 (ECLI:NL:HR:2009:BI8493).