Examinership is a legal procedure in Irish company law that provides court‑appointed protection to a financially distressed company, allowing it a period of respite from its creditors while an examiner attempts to develop a plan for the company's survival or restructuring. The process is designed to give viable businesses an opportunity to rescue themselves, similar to administration in other jurisdictions.
Legal framework
- Statutory basis: The procedure is governed primarily by the Companies (Amendment) Act 2015, which updated the earlier provisions of the Companies Act 1990 and subsequent amendments.
- Court involvement: A company must apply to the High Court for an order granting examinership. The court assesses whether the company is “unable to pay its debts” and whether there is a reasonable prospect of survival.
- Examination period: If the court grants the order, a statutory moratorium is imposed, typically lasting up to 100 days, during which the examiner can negotiate with creditors, formulate a restructuring plan, and seek approval of that plan.
Role of the examiner
- Appointment: The examiner is an independent, qualified professional—often an accountant or solicitor—appointed by the court.
- Duties: The examiner evaluates the company’s financial position, prepares a proposal (the “scheme of arrangement”) for debt restructuring, and may arrange new financing.
- Creditor engagement: The examiner must convene meetings of creditors and, if necessary, a meeting of the company’s shareholders to obtain approval for the proposal.
Outcome possibilities
- Approval of the scheme: If a majority in value (and at least 75 % in number) of the creditors who vote accept the scheme, the court may confirm it, giving the company a fresh start under the agreed terms.
- Failure of the scheme: If the scheme is not approved, the examinership order is typically lifted, and the company may proceed to liquidation, dissolution, or other insolvency procedures.
Comparison with other jurisdictions
- United Kingdom: The closest analogue is administration, which also provides a moratorium and a licensed insolvency practitioner to manage the company.
- United States: Chapter 11 bankruptcy serves a similar function, offering reorganization under court supervision.
Notable uses
- Examinership has been employed in high‑profile Irish cases, such as the restructuring of Aer Lingus (2006) and the furniture retailer IKEA Ireland (2021). These cases illustrate the mechanism’s capacity to preserve employment and maintain business continuity when feasible.
Criticisms and reforms
- Critics argue that the 100‑day moratorium may be insufficient for complex restructurings, prompting calls for longer periods or greater flexibility.
- Legislative reforms, notably the Companies (Amendment) Act 2015, introduced measures such as the ability to extend the examinership period by court order and clarified the examiner’s powers regarding asset disposition.
References
- Companies (Amendment) Act 2015, §§ 33–39.
- High Court Rules (Ireland), Order 53A (Examinership).
- Irish Statute Book, “Examinership” provisions.
The information presented reflects the status of examinership under Irish law as of the latest available legislative updates.
