Examinership, which was first introduced in 1990 as part of the Companies (Amendment) Act, is a process in Irish law whereby the protection of the courts is obtained to assist the survival of a potentially viable company.
The process offers protection to an insolvent business from its creditors for a finite period enabling it to put in place a survival plan and restructure its debts, where normal recovery measures have not been available.
Benefits of examinership
During the examinership period the company has the protection of the courts and the examiner can also certify costs of critical suppliers during the post-petition period to help safeguard payment and the continuity of trade during the examinership period.
During this period, creditors are precluded from litigating for pre-petition creditor balances or advancing claims for retention of title to goods and the company is protected against any seizure actions by the Sheriff on foot of existing judgements.
A successful examinership results in reduced creditor balances, protection of the assets of the company and an injection of new investment into the company.
Many examinerships involve new board members who will add strength to the management. Alternatively, if the business is assimilated into another company, it can benefit from synergies created by the enlarged entity.
Examinerships for SMEs
The introduction of the Companies Acts 2014 has allowed for examinership to be heard by the Circuit Court in addition to the High Court, meaning that the process is now cheaper and more flexible. This ensures that that examinership is now a viable option for struggling SMEs to consider.
Our experienced team can:
- Assist a company in determining whether it is suitable for examinership
- Provide advice and assistance for High Court or Circuit Court application for the appointment of an examiner
- Prepare the independent expert’s report in support of a petition to the court for protection
- Act as examiner on the nomination of the shareholders, directors or creditors
*A Scheme of Arrangement is a process used by a company in financial difficulty to reach a binding agreement with its creditors to pay back all, or part, of its debts over an agreed timeline.