Corporate Recovery Team

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We are a leading domestic advisor in the areas of examinerships having acted in some of the country’s most high-profile matters in recent times. Our clients include, distressed companies, Accountants, Creditors, Investors and Private Clients.

We actively advise Insolvency Practitioners appointed to companies in all sectors, including construction, retail, security, bars and nightclubs ensuring the best commercial result is achieved at all times. In addition, we advise private clients seeking investment opportunities or a method of restructuring corporate debt.

Our team at Brady Kilroy have acted in 50+ Examinership cases at High Court and Circuit Court level, on behalf of companies, Examiners, creditors, investors and individuals. We are exceptionally experienced in the process and have strategic relationships with leading Insolvency Practitioners. A small sample of some recent cases we advised upon across a wide spectrum of industries, 100% of which were successful, include:

  • Donal MacNally Opticians Limited [2019/01213]

  • Stresslite Tanks Limited [2019/160];

  • Cool Cat Plant Services Limited [2019];

  • L&M Keating Limited [2021/297COS]

  • Karaoke Box Limited t/a Ukiyo Bar [2019/05062];

  • I Supply Limited [2019/98]

  • B&D Food Emporium Gorey Limited 2018/508CA;

  • Kitchen Innovations Limited [2021/102]

  • Denis Moriarty Civil Engineering Contractors [2018];

  • Conway Piling Limited 2018/370COS;

  • Avello Limited [2020/03939]

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The Process

  1. Call our office
  2. Discuss the details of your company – (i) which industry? (ii) level of debt? (iii) profile of creditors? (iv) number of employees?
  3. We evaluate all of the facts and make an assemment
  4.  In the case of Examinership and SCARP, bring the necessary motion/petition to the Relevant Court
  5. Guide you through the process with a view to returning your business to solvency and ultimately profitability

Examinership is a mechanism provided for the rescue and return to health of ailing but viable companies. The necessity for this process has never been more prevalent than now, during such harsh economic times. A company must be (a) insolvent and (b) have a reasonable prospect of survival to qualify for Examinership. A company can be afforded up to 100 days protection from its creditors (by the Circuit or High Court depending on its level of turnover), within which time they must formulate proposals for a Scheme of Arrangement which must be approved by an impaired class and ratified by the Court. The optimum outcome of the process is that creditor balances are reduced, the assets of the company are protected and investment is procured. The Company’s directors normally remain in control of the business during the examination process which is supervised by an expert Accountant under the advices of qualified lawyers. When successful, the company’s balance sheet will be in considerably better shape allowing it to retain employment and ideally thrive into the future.

Expert Advice 

The whole process from start to finish is a nuanced one, requiring expert guidance throughout. Not all companies are suitable candidates for Examinership and often an incorrect diagnosis can be detrimental. It is imperative that you obtain accurate, concise, trusted legal and accountancy advice.

An extremely cost-effective method for a company to continue as a going concern is to avail of a Scheme of Arrangement. This underutilised provision of the Companies Act 2014 (the “Act”) is the most efficient way to save a company on the brink of extinction, thus retaining employment and hopefully laying the path for a bright future. If your company meets the criteria, as an alternative to Examinership, this is an excellent option.

Part 9 of the Act; Sections 449 – 454: Schemes of Arrangement provisions provide that an arrangement may be entered into by a company about to be, or in the course of being, wound up. Such an arrangement is entered into between the company and its creditors and requires the consent of the members of the company, which must be given by special resolution (a majority of 75% of the members), and the consent of 75% in number and value of all creditors of the company.

A Scheme of Arrangement proposal must be prepared and sent to shareholders/creditors. If shareholders and creditors meetings vote in favour of the scheme to the requisite value, then it is necessary to bring an application to the High Court to have the scheme sanctioned and approved pursuant to Section 453 (2)(c) of the Act. Once sanctioned by the Court the scheme is binding upon creditors.

Unfortunately, sometimes a company is not suitable for an Examinership or a Scheme of Arrangement. In such circumstances it may be necessary to liquidate the company through a creditor’s voluntary liquidation (pursuant to section 585 of the Companies Act 2014) or a Court appointed liquidation (pursuant to Section 571 of the Act).

Although the company will cease to be a going concern, it is still absolutely imperative that accurate and trusted legal advice is obtained. Sound advice can make a significant difference in protecting various commercial interests.

Our team at Brady Kilroy have acted in multiple Liquidations in the High Court on behalf of companies, directors, creditors and the Revenue Commissioners. We also act in the prosecution and defence of restriction/disqualification of company directors. We are exceptionally experienced in the process and have strategic relationships with leading Insolvency Practitioners. A small sample of some recent cases we advised upon, include:

  • PGP Entertainment Limited [High Court Record Number 2019 No. 158 COS]
  • Business Mobile Security Services Limited [High Court Record Number 2019 No. 284 COS]
  • Lndos Wedding Limited [High Court Record Number 2019 No. 339 COS]
  • Tintri Ireland Limited [High Court Record Number 2019]
  • Webprint Limited [High Court Record Number 2018 No. 406 COS]
  • Hutton International [High Court Record Number 2017 294]
  • Ailesbury Capital Limited (In Creditors Voluntary Liquidation)
  • KLM Biotechnology Limited [2020/2COS]
  • Emuse Corporation Limited (In Creditors Voluntary Liquidation)

The Companies (Small Company Administrative Rescue Process and Miscellaneous Provisions) Bill 2021 will amend the Companies Act 2014 to provide for a new dedicated rescue process for small and micro companies. Small businesses facing insolvency will be able to cut debt with support from a simple majority of creditors.

The Small Company Administrative Rescue Process (SCARP) (or Examinership-lite) shall be an agreement between the company and its creditors to pay off its debts over a period of time, typically from one to five years, or, alternatively, by way of a lump sum payment. The lump sum mechanism will likely attract opportunity for fresh investment (with a return for equity) into struggling companies by willing investors. In order to qualify for a SCARP, a company must be financially viable and have a reasonable prospect of survival.

In order to avail of the SCARP process, a company must have:

  • An annual turnover of up to €12m;
  • A balance sheet total of up to €6m;
  • Up to 50 employees.

The Process

Shall have the primary purpose of saving a company and any jobs it provides;
Shall be commenced by way of a Director Resolution as opposed to a Court application;
Shall be overseen and assisted by an Insolvency Practitioner, known as a “Process Advisor”, in conjunction with specialist legal advisors, who prepare a rescue plan for presentation and approval by the creditors;
Requires a majority of value (over 50%) of the company’s creditors to support the rescue plan;
Will likely obtain approval without the requirement of a court application, provided no impaired class of creditors object (within the 21-day cooling off period which follows the vote);
Shall include safeguards against irresponsible, dishonest, and reckless behaviour by directors;
Shall provide for a format of cross-class cram down of debts designed to reduce costs. The approval mechanism is drawn from examinership and means that where one class of impaired creditor votes in favour of the plan, this decision can then be imposed on all classes of creditors;
Shall invite creditors to vote on the rescue plan on or before day 42 of the Process Advisor’s appointment;
Shall, where an objection to the rescue plan is lodged, bring about an automatic obligation on the company to seek Court approval;
Shall be concluded within 70 days, subject to any requirement for Court approval upon objection.

Trusted

Proficient

Expert Legal Team

MEET YOUR TEAM

A commercially minded firm specializing in corporate recovery.

PAUL BRADY
PAUL BRADYManaging Partner
JOHN KILROY
JOHN KILROYPartner
JAMES FLYNN
JAMES FLYNNSolicitor

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