As at 5 February 2018

by Emilie Ghio
doctoral student at the University College Cork

Proceedings Elements of the Directive already included into the national legislation
Main features:
Confirmation by the court of an advanced negotiated restructuring plan (scheme of arrangement).
The objective is the rescue of the company as a going concern.
- Compliance with articles 5; 6; 7; 8 (section 539(1) Companies Act 2014); 9; 11; 12; 14.
The Examinership procedure is a pre-insolvency proceeding, available when the company “is or is likely to be unable to pay its debts” section 509 Companies Act 2014). It is therefore a preventive restructuring measure.
It is a measure leaving the debtor-in-possession since an insolvency professional is appointed with a general monitoring role only, for drafting a restructuring plan.
There is a stay on enforcement actions. The stay generally lasts so long as the debtor is in examinership, i.e. 4 months. The initial period of moratorium is 70 days, which can be extended to up to 100 days.
Creditors are placed in separate classes. The restructuring plan should distinguish between classes of members and creditors, whose claims and interests will, or will not, be impaired by the proposal.
Cross-class cram-down is possible, if the scheme is not unfairly prejudicial and is fair and equitable towards any impaired class. At least one impaired class must accept the plan.
Objection to and revocation of plans are possible, but a right to appeal is not mentioned in the legislation.
Proceedings Elements of the Directive which may be included into the national legislation
Examinership - Article 4(3): limit on the involvement of judicial authorities to where it is necessary and proportionate in order to safeguard the interests of creditors and other interested parties likely to be affected. This provision is vague and it is not sure whether the examinership procedure complies with the limit on judicial involvement.
- Article 4(4): restructuring procedure could not be started absent of consent of debtor. In an examinership, the court makes the decision to appoint an examiner.
- Article 5(2): no mandatory appointment of a practitioner. In an examinership, the procedure is necessarily managed by an examiner, in every case.
- Article 6: stay may be ordered. In an examinership, the stay is mandatory.
- Article 15: right to appeal. In an examinership, objections to and revocations of plans are possible, but a right to appeal is not mentioned.