A Q&A guide to restructuring and insolvency law in Ireland.
The Q&A gives a high level overview of the most common forms of security granted over immovable and movable property; creditors' and shareholders' ranking on a company's insolvency; mechanisms to secure unpaid debts; mandatory set-off of mutual debts on insolvency; state support for distressed businesses; rescue and insolvency procedures; stakeholders' roles; liability for an insolvent company's debts; setting aside an insolvent company's pre-insolvency transactions; carrying on business during insolvency; additional finance; multinational cases; and proposals for reform.
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This Q&A is part of the PLC multi-jurisdictional guide to restructuring and insolvency law. For a full list of jurisdictional Q&As visit www.practicallaw.com/restructurehandbook.
The most common forms of security granted over immovable property are:
Mortgage. A mortgage involves the transfer (or conveyance or assignment) of the legal title in the mortgaged property from the debtor to the creditor by way of security. This is subject to an express or implied term that the property will be transferred back to the debtor when he has fulfilled his obligations (usually the repayment of the loan, including capital and interest).
Fixed charge. A fixed charge involves a contractual agreement between the creditor and the debtor that a particular specific asset or assets (for example, land or specific machinery) is to be appropriated towards satisfaction of a debt in the event of the debtor's default. The charged property must be specifically identifiable. Unlike a mortgage, a charge does not involve a transfer of ownership, and title to the specific asset remains with the debtor. However, the debtor usually cannot dispose of the asset without the creditor's permission.
If a debtor defaults under a fixed charge or mortgage, the creditor has recourse to the identified asset charged, typically through the appointment of a receiver to realise the asset.
The most common forms of security granted over movable property are:
Mortgage and charge. See above, Immovable property: Mortgage.
Fixed charge. See above, Immovable property: Fixed charge.
Floating charge. A floating charge is a charge over a class of assets which vary over time. On crystallisation, the charge fastens onto the charged property or class of property and becomes a quasi-fixed charge. Until crystallisation, the debtor can use the assets which are the subject of the charge in the ordinary course of its business. The events that trigger crystallisation are provided for in the charging document.
Pledge. A pledge is a transaction under which a debtor delivers possession of goods to a creditor. The creditor retains these goods as security and for as long as the debtor has unsatisfied obligations to the creditor. A pledge confers a power of sale on a creditor if the debtor defaults.
Lien. A lien is a right given to a person, under a contract for the provision of services, to retain possession of goods belonging to another until he is paid for his services. Liens can arise in a number of ways. However, possession and delivery of the goods is critical in determining that a lien exists.
The formalities for the creation of a security interests depend on the type of asset over which security is to be granted. If the relevant security document has been validly executed, mortgages, fixed charges and floating charges must be registered with the Companies Registration Office within 21 days of their creation for the security to be effective. Failure to do so renders the charge void as against any liquidator or creditor of the company. The charge is not void against the company itself before liquidation. If the charge includes property, failure to register with the relevant land registry can effect its priority as against other securities.
Pledges and liens do not require registration. Security over certain assets, such as land, aircraft, ships and intellectual property, can require registration in relevant registries.
Funds are distributed in the following order on a company's insolvency:
Fees, costs and expenses of an examiner (where applicable) (see Question 6, Examination).
Mortgage or fixed charge holders. They are paid up to the amount realised from the assets covered by the security (net of the costs of realising the relevant assets). Any surplus can be claimed by the charge holder as an unsecured creditor.
Amounts certified by an examiner under section 10 of the Companies (Amendment) Act 1990.
Costs and expenses of the winding-up (which are subject to their own rules in relation to priority).
Certain social insurance deductions.
Preferential debts. These include rates and taxes, wages and salaries.
Floating charge holders. They are paid up to the amount realised from the assets covered by the floating charge.
Unsecured debts ranking equally with each other.
Deferred debts ranking equally with each other.
Debts due to shareholders.
All claims in one category receive full payment before remaining proceeds are distributed to the creditors in the following category. If the proceeds are insufficient to meet the claims of the one category in full, payments for that category are pro-rated.
The most common mechanism that trade creditors use to secure unpaid debts is a contractual retention of title clause. A retention of title clause reserves the title in the goods to the seller until certain conditions have been fulfilled. These conditions usually relate to payment for the goods or payment for all outstanding sums due to the creditor.
The validity of a retention of title clause depends on the type of clause that the seller uses and the facts of each case. Clauses which purport to give the seller rights beyond retaining title to the goods as delivered are generally not enforceable.
An unpaid creditor can apply to court seeking judgment for its debt. If there is no defence to the debt and the claim is not in dispute, judgment can be awarded summarily. Once judgment has been obtained, a number of enforcement options are available to the judgement creditor:
Judgment mortgage. If the debtor has property it may be possible to attach a judgment mortgage to that property to secure the judgment and enforce it in the future.
Appointment of a receiver. The judgment creditor can also apply to the court for the appointment of a receiver over assets that are about to come into the debtor's possession.
Seizure or attachment. This is a process of enforcing a money judgment by the seizure or attachment of debts due to the judgment debtor.
Execution order. The creditor can obtain an execution order to enable the sheriff to seize any tangible assets in the debtor's name. These are then auctioned and the proceeds paid to the creditor.
Since 30 September 2008, the Minister for Finance, among others, has been permitted to guarantee the liabilities of credit institutions (Credit Institutions (Financial Support) Act 2008).
The Credit Institutions (Stabilisation) Act 2010 (Stabilisation Act) became law on 21 December 2010. It is the first step in the legislative framework for the restructuring and stabilisation of the Irish banking system under the:
National Recovery Plan 2011 to 2014.
Joint European Union/International Monetary Fund Programme of Financial Support for Ireland.
The Stabilisation Act introduces provisions aimed at improving the stability of credit institutions and applies to relevant institutions (that is, typically, banks that have their registered office in Ireland, that are licensed in Ireland and that have received financial support from the Irish state). Subject to certain protections in favour of certain classes of netting, collateral and covered bonds (Stabilisation Act):
Shareholder rights can be altered.
Assets or liabilities can be disposed of (including partial transfers so as to cherry pick).
The rights of subordinated creditors can be affected.
Contractual rights of acceleration and termination can be removed.
What is its objective and, where relevant, what are the prospects for recovery?
How is it initiated, when, by whom and which companies can it be applied to?
Can the company obtain any protection from its creditors during the procedure?
What substantive tests apply?
How long does it take?
What consents and approvals are required?
Who supervises the procedure and controls the company's affairs (for example, an independent accountant or the court)?
How does it affect the company, shareholders, employees, trading partners and creditors?
How is the procedure formally concluded and what happens to the company on conclusion?
Objective. Liquidation is the main procedure for dissolving companies. It involves the appointment of a liquidator whose function is to:
Take control of all the property vested in the company.
Realise the assets.
Pay the creditors, if possible.
There are two types of insolvent liquidation:
Compulsory liquidation.
Voluntary liquidation, including members' voluntary liquidation (MVL) (for solvent companies) and creditors' voluntary liquidation (CVL) (for insolvent companies).
Initiation. Compulsory liquidation can only be commenced by court order and is the only type of liquidation which can be commenced by a creditor. Compulsory liquidation is usually sought by a creditor of the company. However, it can also be sought by:
The company itself.
A contributory.
The Director of Corporate Enforcement.
The Registrar of Companies.
The application is made through a petition to the High Court.
A voluntary liquidation is started by the members of the company passing a resolution that the company be wound up. In a CVL, the board of directors calls a meeting of the members and the liquidation commences by a resolution of the members. In an MVL, a declaration of solvency must be sworn before the resolution of the members is passed.
The rules relating to cross-border insolvencies are complex. However, CVL and compulsory liquidation are potentially available to both Irish and foreign-registered companies, provided they can demonstrate they have their centre of main interest or an establishment in Ireland, or potentially some other sufficient connection.
Protection from creditors. In a compulsory liquidation, no action or proceedings can be continued or commenced against the company except by leave of the High Court and subject to such terms as the High Court may agree. In a compulsory liquidation or a CVL, no further execution can be enforced against the company's assets. In an MVL there are no rules protecting the company from its creditors.
Substantive tests. In a compulsory liquidation, a petition can be presented to the High Court on the ground that the company is unable to pay its debts. This can be established by any one of the following:
Where a creditor can prove that the company is indebted in a sum of EUR1,269.74 (as at 1 February 2011, US$1 was about EUR0.7).
If execution or another process issued on a judgment or decree of any court in favour of a creditor is returned unsatisfied in whole or in part.
If it is proved to the court's satisfaction that the company is unable to pay its debts. In determining whether a company is unable to pay its debts, the court takes into account the contingent and prospective liabilities.
In a CVL, the board of directors calls a members' meeting if the directors are of the opinion that the company is insolvent and unable to pay its debts as they fall due.
In addition, a court can order that a company be wound up on just and equitable grounds.
Length of procedure. The procedure's length depends on the type of liquidation and the company's situation. There is no fixed time frame.
Consents and approvals. In a compulsory liquidation, a court orders that the company be wound up.
In a CVL, an ordinary resolution must be passed to place the company into voluntary liquidation. An ordinary resolution requires a simple majority of the members present in person or by proxy and entitled to vote. To begin an MVL, a 75% majority must be achieved.
Supervision and control. The liquidator is subject to a varying degree of supervision by the court, creditors, shareholders and the Director of Corporate Enforcement, depending on the type of liquidation.
The High Court controls compulsory liquidations.
Creditors' voluntary liquidations are supervised by either:
A committee of inspection comprising up to five creditors and three shareholder representatives.
The creditors, where no committee of inspection is appointed.
Members' voluntary liquidations are supervised by the shareholders.
Effect. In all types of liquidation, the liquidator assumes the functions of the directors and the directors' powers cease in respect of the company. The company ceases to trade and the trade creditors must prove their debts in the liquidation.
In a compulsory liquidation only, all employees are dismissed once the High Court orders the company to be wound up.
Conclusion. Once the liquidator has realised all of the company's assets and made any applicable distributions to creditors and shareholders (in a solvent liquidation, any surplus is distributed to the shareholders), the company is dissolved.
Objective. Examination is a court-based insolvency procedure introduced by the Companies (Amendment) Act 1990 to facilitate the rescue of insolvent and nearly insolvent companies.
The examiner's (see below, Initiation) task is to develop proposals for a scheme of arrangement. The scheme of arrangement usually involves a combination of new investment, a write-down of creditors' claims and payment of a dividend to creditors (possibly over a period of time). The company continues to trade during the examination period and the directors continue to run the company. If a scheme of arrangement is not successfully implemented, the court's protection is withdrawn and liquidation or receivership inevitably follows.
Initiation. An examiner is appointed by a High Court order following the presentation of a petition by any of the following:
The company.
The directors of the company.
A creditor, including a contingent or prospective creditor (including an employee) of the company.
Shareholders holding not less that 10% of shares carrying the power to vote at general meeting at the time of the presentation of the petition.
The petition must, except in certain defined circumstances, be accompanied by a pre-petition report compiled by an independent accountant (that is, an auditor of the company or someone qualified to be appointed as examiner of the company). This is to assist the court in deciding whether the company has a reasonable prospect of survival (see below, Substantive tests).
Protection from creditors. During the examination period, the company's creditors are effectively prevented from exercising their rights, including the enforcement of security.
See also, below, Effect.
Substantive tests. The court will not order the appointment of an examiner unless it is satisfied that there is a reasonable prospect of the company (and the whole or any part of its undertaking) surviving as a going concern. The company must also be unable to pay its debts as they fall due or likely to become unable to pay its debts as they fall due.
Length of procedure. Examination lasts up to 100 days, although this can be extended if the court needs time to consider the examiner's proposed scheme.
Consents and approvals. Once the examiner has formulated his proposals, he must convene and preside at meetings of the members and creditors, and report back to the High Court. The number of meetings depends on how many different classes of members and creditors are involved. The proposals are deemed to be accepted by a class of members or creditors if passed by a majority in value and number of that class.
For court approval of the scheme, at least one class of creditors whose rights are impaired must vote in favour (see below, Conclusion).
Supervision and control. The High Court supervises the process. An examiner is an officer of the court. The directors remain responsible for the day-to-day management of the company.
Effect. From the date of presentation of the petition, the company is effectively protected from any creditor action, including:
The commencement of winding-up proceedings.
The appointment of a receiver.
The attachment of assets.
The repossession of goods under hire purchase or retention of title arrangements.
Any action to realise security, except where the consent of the examiner is obtained.
Trade creditors cannot take any action against the company during the 100-day period (see above, Length of procedure). The effect on the shareholders depends on the terms of the scheme of arrangement presented to the members and creditors, and whether the High Court approved the scheme. As a scheme of arrangement often involves the injection of new capital into the company, shareholders' shareholdings are often diluted or transferred to the new investor.
Conclusion. The court:
Approves (or rejects) the scheme of arrangement. The court cannot approve the scheme unless both:
one class of creditors whose rights are impaired has voted in favour of the scheme (see above, Consents and approvals);
it is satisfied that the scheme is fair and equitable in relation to any class of members or creditors that has not accepted the proposals, and is not unfairly prejudicial to any interested party.
As a rule of thumb, a creditor should not get less in a scheme of arrangement than it would on a liquidation.
If it approves the scheme, fixes a date for the scheme's implementation. On the date of implementation, the company comes out of court protection and the examination ceases.
Objective. Irish law provides for several different types of receivership (including the appointment of a receiver by the court). The most common type occurs where a secured creditor (usually a lending institution) appoints a receiver under contractual powers granted in a debenture or charge. The receiver's primary function is to realise the charged assets and distribute the proceeds to the charge holder, subject to any other valid charges and priorities.
Initiation. A receiver is usually appointed by the holder of a debenture that constitutes a charge over the undertaking and assets of a company. This usually occurs when either:
The principal or interest under a debenture is in arrears.
Another event has happened as a result of which, under the terms of the debenture, the security has become enforceable.
A receiver is appointed under a deed of appointment, under the debenture.
Protection from creditors. There is no protection against creditors. However, all assets over which the receiver has been appointed no longer form part of the assets of the company and therefore no enforcement can be levied against those assets by creditors of the company.
Substantive tests. There are no specific substantive tests. Whether a receiver can be appointed usually depends on the terms of the debenture or charge.
Length of procedure. There is no time limit, but receivership is a temporary as it does not necessarily lead to liquidation.
Consents and approvals. No consents or approvals are required.
Supervision and control. The receiver has the legal right to receive property belonging to others. The receiver controls the assets over which he has been appointed. The charging documents can provide that the receiver is entitled to manage the company. The receiver is an independent office holder and must act in the interests of the secured charge holder and the company.
Effect. The directors cease to have control over the assets over which the receiver has been appointed. However, the directors' normal powers and duties continue in relation to any other assets and liabilities of the company, and the corporate entity.
Conclusion. Once the charged assets have been realised and the receiver has accounted to the secured creditor for the proceeds of sale (net of costs), the receiver is discharged and the directors either continue the company's operations of the company or place it into liquidation.
If at the conclusion of the receivership the receiver has a surplus over the debt due to the secured charge holder, he transfers this surplus to any subsequent charge holder, the company or its liquidator (if the company goes into liquidation).
Objective. A company can formulate proposals to compromise the rights of members or creditors, or any class of them, and apply to the High Court to have these approved (sections 201 to 203, Companies Act 1963). If a company is indebted to a large group of creditors, a company can enter into a restructuring process amounting to a formal scheme of arrangement. This allows a formal binding compromise or arrangement between a company and its creditors once it has received the requisite level of approval (see below, Consents and approvals).
Initiation. A scheme of arrangement can be commenced by the:
Company itself.
Liquidator, where the company has been put into liquidation.
Protection against creditors. The court has discretion to stay any proceedings against the company on any terms and for any period as it thinks appropriate.
Substantive tests. There are no specific substantive tests. It is not necessary to show that the company has a reasonable prospect of survival.
Length of procedure. The length of the procedure depends on the scheme's terms.
Consents or approvals. On application, the High Court can both (section 201, Companies Act 1963):
Order meetings of members and creditors, or any class of them, to be convened.
Approve a scheme, if a majority in members representing 75% in value of each class of creditors approve the scheme.
Supervision and control. The procedure is controlled by the company and the creditors. The company and the creditors negotiate the terms of the scheme.
Effect. If the court approves the scheme, the scheme is binding even on dissenting, absent or untraceable creditors. The effect on trade creditors, employees and shareholders depends on the terms of the approved scheme. Shareholders may find their shareholding diluted.
Conclusion. The conclusion of the scheme depends on its terms.
While Irish insolvency law favours senior lenders, most restructurings involve negotiations between creditors and the company which take place outside of any statutory procedure. Typically, the creditors (including bondholders and lenders) are required to vote on the acceptance of a restructuring proposal. Formal restructuring through examination or a scheme of arrangement can be defeated if the necessary statutory minimum creditor support is not reached (see Question 6, Examination and Scheme of arrangement).
A company's directors (including non-executive, de facto and shadow directors (including bodies corporate)) can be held liable to contribute to the company's assets in certain circumstances:
Misfeasance or breach of duty. If a company is being wound up and any officer of the company (or any person who has taken part in the formation or promotion of the company) is guilty of misfeasance or other breach of statutory duty, fiduciary duty or trust in relation to the company, the court can:
compel restoration of any funds misapplied or retained; or
require a contribution from that person by way of compensation.
In an insolvency, the directors' duties are owed to the creditors, and directors can be held accountable for actions taken (or for failures to act) before a formal insolvency procedure has commenced. The directors of an insolvent company have a duty to the creditors to preserve the assets to discharge its liabilities, or at least not to dissipate them.
Failure to keep proper books. In an insolvent liquidation, if there is a failure to keep proper books of account for a company, any officer of the company can be held personally responsible (without limitation of liability) for the debts or other liabilities of the company. This can apply where the court considers that the failure to keep proper books either:
contributed to the company's inability to pay its debts; or
resulted in substantial uncertainty as to the assets and liabilities of the company, or has substantially impeded its orderly winding-up.
Criminal penalties can also be imposed.
Fraudulent or reckless trading. Any officer of a company can be personally liable (without limitation) for all or any part of a company's debts or other liabilities if the court is satisfied that, while an officer of the company, that person knowingly carried on any business of the company:
in a reckless manner; or
with intent to defraud creditors of the company or creditors of any other person, or for any fraudulent purpose.
However, the directors will not face sanction unless the company is in insolvent liquidation or examination. The court can relieve an officer of personal liability for the debts of the company if it is satisfied that the officer acted honestly and responsibly in relation to the conduct of the company's affairs.
Breach of a restriction or disqualification order. A director can be personally liable for breaching a restriction or disqualification order, or for acting as a director on the board of a company which has directors who are acting in breach of a restriction or disqualification order.
Who can challenge these transactions, when and in what circumstances?
Are third parties' rights affected?
The following transactions by a company that subsequently becomes insolvent can be set aside:
Fraudulent preference. Section 286(1) of the Companies Act 1963 seeks to prevent companies from granting a preference to one creditor over another. A preference arises where a company enters into a transaction which puts a creditor in a better position than that creditor would have been in if the transaction had not taken place. Preferences that took place within six months before the company's liquidation can be set aside. This time limit is extended to two years where the disposal was in favour of a connected party. A connected party is any person who, at the time of the transaction was:
a director or shadow director of the company;
a director's spouse, parent, sibling or child;
a related company (this is very widely defined);
any trustee of, or surety or guarantor for, the debt due to any person referred to above.
The rights of a third party are not affected if he took title to assets that are the subject of a fraudulent preference both (section 286(4), Companies Act 1963):
in good faith and for valuable consideration;
through or under a creditor of the company.
Fraudulent disposition. If a disposition by a company has the effect of perpetrating a fraud on the company, its creditors or members, the High Court can order the return of the property to the liquidator, examiner or receiver on any terms or conditions it thinks fit (section 139, Companies Act 1963). In determining whether this order should be made, the court both:
considers whether it is just and equitable to do so;
looks at the effect of the transaction rather than the motives behind it.
In exercising its just and equitable discretion, the court must have regard to the rights of persons who have acquired in good faith and for value an interest in the property that is the subject matter of the application. This is not limited to persons who take from creditors and extends to those who are the direct recipients of the disposition.
Invalidation of floating charges. Section 288(1) of the Companies Act 1963 protects creditors from the creation of floating charges by companies which are insolvent or approaching insolvency. Floating charges created in the 12 months before the commencement of a winding-up are, unless it is proved that the company was solvent immediately after the creation of the charge, invalid except as to fresh monies advanced (that is, a floating charge given over both new and historic facilities can be invalidated in relation to the historic facilities but not the new facilities (section 288(1), Companies Act 1963)). Although these charges are invalid, the debt remains valid.
There are no protections for third parties.
Re Frederick Inns. If the directors of an insolvent company are aware or ought to have known of the company's insolvency, they hold the assets of that company in trust for the benefit of the company's creditors (Re Frederick Inns). Any disposition can therefore give rise to an obligation to return the property received (for example, where the recipient was aware of the insolvency of the transferor). Where a third party has in good faith and for value purchased the assets that are the subject of the disposition, the third party is usually protected from any claim in respect of their recovery.
Who has the authority to supervise or carry on the company's business?
What restrictions apply?
In a compulsory or court liquidation, the Official Liquidator can apply to the High Court for the power to carry on the company's business so far as may be necessary for its beneficial winding-up. The High Court only grants this power if it is satisfied that it would benefit the winding-up. This power cannot be applied for or given for other purposes, such as reconstruction or simply making a profit. If an Official Liquidator carries on a company's business with the High Court's approval, this both:
May be subject to certain limitations imposed by the High Court.
Is generally for a short period of time only. Extensions of time must be sought from and justified to the High Court.
This process is most often used where the Official Liquidator intends to sell the business and ceasing to trade would impair the value of the business. In these circumstances, the High Court must be kept informed of the sale's progress. The High Court is unlikely to allow the company to continue to trade if the sale is uncertain or becomes protracted.
In a voluntary liquidation, a company's liquidator can exercise the power to carry on the company's business without the High Court's approval. This power must be exercised in accordance with the provisions and purpose of the Companies Acts (that is, the liquidator's primary function is to unwind the company and distribute its assets among the creditors and members in accordance with statutory priorities).
In an examination, the company itself continues to trade. The examiner's role is not to run the company's business during the examination period; this power remains with the company's directors. The examiner can apply to the High Court for an order that the examiner exercise the directors' powers, on any of the following grounds:
The affairs of the company are being conducted in a manner which is calculated or likely to prejudice the interests of the company, its employees or its creditors.
It is expedient for the purpose of preserving the assets of the company.
The company or its directors have resolved that such an order should be sought.
Any other matter which the High Court considers relevant.
In a receivership, the receiver's powers depend on the security document under which the receiver was appointed. This may give the receiver the powers necessary to carry on the company's business. However, the receiver will only do this if there is a benefit in so doing for the secured charge holder. The receiver must act in accordance with his duty to the secured charge holder and the company to act in good faith.
A liquidator can raise finance on the company's assets without the High Court's approval (Companies Act 1963). This liability is considered to be an expense of the liquidation and ranks in priority to the company's debts and liabilities (see Question 2).
A receiver may be able to borrow in the name of the company if the charging document specifically grants this power. This power is often granted where there is a power to operate the company's business. If finance is sought, it is considered an expense of the receivership and will be paid out of the proceeds of charged assets. It does not form part of the company's unsecured debts.
A company in examination can raise finance during the examination period, acting through its directors. The directors must be satisfied that the liability is incurred for the benefit of the company and that the company will be able to meet this liability in due course (if not, the directors can be personally liable for the debt incurred (see Question 8)).
Only debts incurred before the petition to appoint an examiner can be written down in proposals for a scheme of arrangement. Liabilities incurred after this date are ordinary debts of the company and have no priority (see Question 2). The examiner can certify liabilities incurred during the examination period if he is satisfied that the company's survival as a going concern would otherwise be seriously prejudiced. These certified liabilities are treated as expenses of the examination and therefore have priority over all other debts apart from those secured by a fixed charge.
Do local courts recognise insolvency and rescue procedures in other jurisdictions, and court judgments made during these procedures? Is recognition given under specific legislation or under case law (for example, principles of comity)?
Do courts co-operate where there are concurrent proceedings in other jurisdictions?
Is your jurisdiction party to any international treaties, model laws or EU legislation (if applicable)?
Are there any special procedures that foreign creditors must comply with when submitting claims in local insolvency proceedings?
Regulation (EC) 1346/2000 on insolvency proceedings (Insolvency Regulation) forms part of Irish law. If a judgment specific to insolvency proceedings, such as the opening of insolvency proceedings, is obtained in an EU member state other than Denmark, Ireland must recognise and give effect to that judgment with no further formalities (Insolvency Regulation).
A foreign judgment is recognised in Ireland with no further formalities if both (Insolvency Regulation):
It is handed down by a court whose judgment relating to the opening of insolvency proceedings is recognised under the Insolvency Regulation.
The judgment concerns the course or closure of insolvency proceedings and compositions approved by that court.
The UNCITRAL Model Law on Cross-Border Insolvency 1997 (UNCITRAL Model Insolvency Law) has not yet been adopted in Ireland (see Question 13).
The Insolvency Regulation applies in Ireland.
There is no distinction between foreign creditors and Irish creditors in Irish insolvency proceedings. Foreign currency debts are converted into euro.
The Law Reform Commission is not currently discussing or implementing any proposals for reform of corporate insolvency procedures. The Company Law Review Group is considering adopting the UNCITRAL Model Insolvency Law. A Companies Consolidation and Reform Bill, which will bring together and update Irish company law, is expected to be introduced later this year. However, the detail of this bill is unknown and any bill is likely to be subject to substantial debate and amendment over a number of years.
T +353 1 618 0509
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E william.day@arthurcox.com
W www.arthurcox.com
Qualified. Ireland, 1992
Areas of practice. Corporate recovery and insolvency; restructuring; litigation and dispute resolution.
Recent transactions
T +353 1 618 0576
F +353 1 616 3812
E brendan.cooney@arthurcox.com
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Qualified. Ireland, 2000
Areas of practice. Corporate recovery and insolvency; restructuring.
Recent transactions
