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Examinership is a process whereby a struggling but potentially viable company can seek a limited period of Court protection from its creditors in order to have an independent person, the examiner, appointed in order to formulate proposals for a compromise or scheme of arrangement with its creditors which, if accepted by the creditors and ultimately approved by the Court, will enable the company to continue to trade into the future and preserve employment.

Up until now that Court has been the High Court.  However when Section 2 of the Companies (Miscellaneous Provisions) Act 2013, which was signed into law by the President on the 24th December 2013, is commenced, the Circuit Court will have jurisdiction for the appointment of examiners to ‘small’ companies.  Small private companies are those that meet two of the following three conditions:

  • The Balance Sheet must not exceed €4.4 million
  • The turnover must not exceed €8.8 million
  • The number of employees must not exceed 50

By enabling small private companies to apply directly to the Circuit Court to have an examiner appointed instead of having to apply to the High Court first it is hoped that costs will be lowered thereby making the examinership process more accessible to small private companies.  It remains to be seen if this change, while welcome, will go far enough as the reform does not provide for any reductions in the non-legal costs including the preparation of the accountant’s report which costs form a significant part of the overall costs of examinership.

Norma Lane is a solicitor in the Commercial Department of FitzGerald Solicitors.  FitzGerald Solicitors are located at 6 Lapps Quay, Cork.

The above article is not intended to be legal advice and we would recommend that you seek advice from your solicitor which is tailored to your specific needs.

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