The detailed procedures for placing a company into Examinership and the subsequent steps are outlined below. In summary, in order for a company to be suitable for Examinership, the High Court (or the Circuit Court as the case may be) has to be satisfied that the company, and the whole or any part of its undertaking, would have a reasonable prospect of survival. In essence, there must be a business that is either viable, or can be made viable.
The process itself begins with a petition presented to the High Court/Circuit Court.
The Companies (Miscellaneous Provisions) Act, 2013 (the “Act”) was signed into law on 24 December 2013 and has introduced what has become colloquially referred to as “examinership-lite”, or what it is hoped will be a new SME-friendly examinership regime.
Prior to the Act being signed into law, there was no option for a company to apply directly to the Circuit Court for the appointment of an examiner under the examinership regime as set out in the Companies (Amendment) Act 1990. Instead, the High Court could choose to remit the matter to the Circuit Court, where it is satisfied that the total liabilities of the company do not exceed £250,000 (€317,500).
The Act prescribes the statutory criteria to be satisfied in order for the Circuit Court to have jurisdiction. The Circuit Court has jurisdiction where the company is a “small company”, which is defined as one which satisfies the qualifying conditions for a given year and the preceding financial year. The qualifying conditions are satisfied where two or more of the following criteria are met for a particular year:
- The turnover for that year does not exceed €8.8 million;
- The balance sheet total for that year does not exceed €4.4 million;
- The average number of employees in the company for that year does not exceed 50.
Importantly, the Act enables a “small company” to elect to apply directly to the Circuit Court (rather than the High Court) for the appointment of an examiner. In such a situation the powers and jurisdiction of the High Court in relation to examinership may be exercised by the Circuit Court.
The High Court, however, still retains jurisdiction to deal with the examinership of a “small company”.
Who May Present A Petition
A Petition for the appointment of an Examiner may be presented by:
- The company; or
- The directors of the company; or
- A creditor, including a contingent or prospective creditor (including an employee), of the company; or
- Shareholders holding not less than one-tenth of shares carrying the power to vote at general meetings at the time of presentation of the Petition.