In its decision in In re Davis Joinery Ltd [2013] IEHC 353, the High Court identified the difficulties that employees of corporate employers may face when their employer ceases trading without taking any steps to formally wind-up the company.

The Government, has announced that it is examining potential changes to the law to clarify the position of residential tenants where a receiver is appointed to rented accommodation. Concern has been expressed that there is a lack of clarity as to whether a receiver appointed to such a property assumes any of the responsibilities of the landlord or whether he should be solely concerned with recovering value from the asset, as would be conventional.

Borrowers are increasingly seeking to challenge or frustrate the validity of an appointment of a receiver on technical grounds. While each case will be determined on its own merits and facts, a recent decision of the High Court is illustrative of the Court’s attitude towards some such arguments.

124 members of the Element Six pension scheme are suing the trustees of the scheme in the Commercial Court for alleged breach of duty arising out of the decision to close the scheme with a significant deficit.  The members claim that the trustees breached their duty to the members by failing to demand that the employer fully fund the deficit in the scheme before wind up.  A number of general issues relating to the obligations of trustees were raised during the 3-week hearing of the case.

Background

On 24 December 2013 the Companies (Miscellaneous Provisions) Act 2013 was signed into law by the President.  The purpose of the legislation is to expedite a number of amendments to existing legislation pending the enactment of the Companies Bill.

Circuit Court Examinership

A former director of Custom House Capital Limited (CHC) was recently found by the High Court to have fraudulently misrepresented to an investor that her €145,000 investment in the company was “safe” a year before CHC's collapse.

In March 2010 Ms Tressan Scott entered into a Subordinated Loan Agreement with CHC pursuant to which she loaned the sum of €145,000 to CHC. At the time the agreement was signed, Ms Scott was recovering from treatment for Lymphoma.

On 22 January 2014 the High Court ordered the winding up of a property company, Fuerta Limited, on the unusual ground that it was just and equitable to do so. Resort to this ground for winding up is usually reserved for the most intractable of situations and it is thought to be the first time the Court has done so on foot of a creditor petition.  

A number of recent High Court decisions suggest an increase in the number of interlocutory applications being brought by receivers seeking to obtain vacant possession of the properties over which they have been appointed.

The Courts and Civil Law (Miscellaneous Provisions) Act 2013 was signed into law by the President on 24 July 2013.  While certain sections of the Act commenced immediately on its signing into law, other provisions have yet to be commenced by ministerial order.

A summary of the key changes brought about by the Act are set out below.

Increase in the Monetary Jurisdiction of District and Circuit Courts

The Act increases the monetary jurisdiction of:

An order providing for the commencement of certain provisions of the Personal Insolvency Act 2012 brings the following three new debt settlement arrangements into operation with effect from 31 July 2013: