Companies (Amendment) Act , 1990

1 Definitions.

1.—In this Act, unless the context otherwise requires—

“the Companies Acts” means the Principal Act, and every enactment (including this Act) which is to be construed as one with that Act;

“examiner” means an examiner appointed under section 2;

“interested party”, in relation to a company to which section 2 (1) relates, means—

(a) a creditor of the company,

(b) a member of the company;

“the Minister” means the Minister for Industry and Commerce;

“the Principal Act” means the Companies Act, 1963.

2 Power of court to appoint examiner.

2.—(1) Where it appears to the court that—

(a) a company is or is likely to be unable to pay its debts, and

(b) no notice of a resolution for the winding-up of the company has been given under section 252 of the Principal Act more than 7 days before the application hereinafter referred to, and

(c) no order has been made for the winding-up of the company,

it may, on application by petition presented, appoint an examiner to the company for the purpose of examining the state of the company's affairs and performing such duties in relation to the company as may be imposed by or under this Act.

(2) Without prejudice to the general power of the court under subsection (1), it may, in particular, make an order under this section if it considers that such order would be likely to facilitate the survival of the company, and the whole or any part of its undertaking, as a going concern.

(3) For the purposes of this section, a company is unable to pay its debts if—

(a) it is unable to pay its debts as they fall due,

(b) the value of its assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities, or

(c) section 214 (a) or (b) of the Principal Act applies to the company.

(4) In deciding whether to make an order under this section the court may also have regard to whether the company has sought from its creditors significant extensions of time for the payment of its debts, from which it could reasonably be inferred that the company was likely to be unable to pay its debts.

3 Petition for protection of the court.

3.—(1) Subject to subsection (2), a petition under section 2 may be presented by—

(a) the company, or

(b) the directors of the company, or

(c) a creditor, or contingent or prospective creditor (including an employee), of the company, or

(d) members of the company holding at the date of the presentation of a petition under that section not less than one-tenth of such of the paid-up capital of the company as carries at that date the right of voting at general meetings of the company,

or by all or any of those parties, together or separately.

(2) (a) Where the company referred to in section 2 is an insurer, a petition under that section may be presented only by the Minister, and subsection (1) of this section shall not apply to the company.

(b) Where the company referred to in section 2 is the holder of a licence under section 9 of the Central Bank Act, 1971, or any other company supervised by the Central Bank under any enactment, a petition under section 2 may be presented only by the Central Bank, and subsection (1) of this section shall not apply to the company.

(3) A petition presented under section 2 shall—

(a) nominate a person to be appointed as examiner, and

(b) be supported by such evidence as the court may require for the purpose of showing that the petitioner has good reason for requiring the appointment of an examiner, and

(c) where the petition is presented by any person or persons referred to in subsection (1) (a) or (b), include a statement of the assets and liabilities of the company (in so far as they are known to them) as they stand on a date not earlier than 7 days before the presentation of the petition.

(4) A petition presented under section 2 shall be accompanied—

(a) by a consent signed by the person nominated to be examiner, and

(b) if proposals for a compromise or scheme of arrangement in relation to the company's affairs have been prepared for submission to interested parties for their approval, by a copy of the proposals.

(5) The court shall not give a hearing to a petition under section 2 presented by a contingent or prospective creditor until such security for costs has been given as the court thinks reasonable, and until a prima facie case for the protection of the court has been established to the satisfaction of the court.

(6) The court shall not give a hearing to a petition under section 2 if a receiver stands appointed to the company the subject of the petition and such receiver has stood so appointed for a continuous period of at least 14 days prior to the presentation of the petition.

(7) On hearing a petition under this section, the court may dismiss it, or adjourn the hearing conditionally or unconditionally, or make any interim order, or any other order it thinks fit.

(8) Without prejudice to the generality of subsection (7), an interim order under that subsection may restrict the exercise of any powers of the directors or of the company (whether by reference to the consent of the court or otherwise).

(9) (a) Where it appears to the court that the total liabilities of the company (taking into account its contingent and prospective liabilities) do not exceed £250,000, the court may, after making such interim or other orders as it thinks fit, order that the matter be remitted to the judge of the Circuit Court in whose circuit the company has its registered office or principal place of business.

(b) Where an order is made by the court under this subsection the Circuit Court shall have full jurisdiction to exercise all the powers of the court conferred by this Act in relation to the company and every reference to the court in this Act shall be construed accordingly.

(c) Where, in any proceedings under this Act which have been remitted to the Circuit Court by virtue of this subsection, it appears to the Circuit Court that the total liabilities of the company exceed £250,000, it shall make, after making such interim orders as it thinks fit, an order transferring the matter to the court.

4 Related companies.

4.—(1) Where the court appoints an examiner to a company, it may, at the same or any time thereafter, make an order—

(a) appointing the examiner to be examiner for the purposes of this Act to a related company, or

(b) conferring on the examiner, in relation to such company, all or any of the powers or duties conferred on him in relation to the first-mentioned company.

(2) In deciding whether to make an order under subsection (1), the court shall have regard to whether the making of the order would be likely to facilitate the survival of the company, or of the related company, or both, and the whole or any part of its or their undertaking, as a going concern.

(3) A related company to which an examiner is appointed shall be deemed to be under the protection of the court for the period beginning on the date of the making of an order under this section and continuing for the period during which the company to which it is related is under such protection.

(4) Where an examiner stands appointed to two or more related companies, he shall have the same powers and duties in relation to each company, taken separately, unless the court otherwise directs.

(5) For the purposes of this Act, a company is related to another company if—

(a) that other company is its holding company or subsidiary; or

(b) more than half in nominal value of its equity share capital (as defined in section 155 (5) of the Principal Act) is held by the other company and companies related to that other company (whether directly or indirectly, but other than in a fiduciary capacity); or

(c) more than half in nominal value of the equity share capital (as defined in section 155 (5) of the Principal Act) of each of them is held by members of the other (whether directly or indirectly, but other than in a fiduciary capacity); or

(d) that other company or a company or companies related to that other company or that other company together with a company or companies related to it are entitled to exercise or control the exercise of more than one half of the voting power at any general meeting of the company; or

(e) the businesses of the companies have been so carried on that the separate business of each company, or a substantial part thereof, is not readily identifiable; or

(f) there is another company to which both companies are related;

and “related company” has a corresponding meaning.

(6) For the purposes of this section “company” includes any body which is liable to be wound up under the Companies Acts.

5 Effect of petition to appoint examiner on creditors and others.

5.—(1) During the period beginning with the presentation of a petition for the appointment of an examiner to a company and (subject to section 18 (3) or (4)) ending on the expiry of three months from that date or on the withdrawal or refusal of the petition, whichever first happens, the company shall be deemed to be under the protection of the court.

(2) For so long as a company is under the protection of the court in a case under this Act, the following provisions shall have effect—

(a) no proceedings for the winding-up of the company may be commenced or resolution for winding-up passed in relation to that company and any resolution so passed shall be of no effect;

(b) no receiver over any part of the property or undertaking of the company shall be appointed, or, if so appointed before the presentation of a petition under section 2, shall, subject to section 6, be able to act;

(c) no attachment, sequestration, distress or execution shall be put into force against the property or effects of the company, except with the consent of the examiner;

(d) where any claim against the company is secured by a charge on the whole or any part of the property, effects or income of the company, no action may be taken to realise the whole or any part of such security, except with the consent of the examiner;

(e) no steps may be taken to repossess goods in the company's possession under any hire-purchase agreement (within the meaning of section 11 (8)), except with the consent of the examiner;

(f) where, under any enactment, rule of law or otherwise, any person other than the company is liable to pay all or any part of the debts of the company—

(i) no attachment, sequestration, distress or execution shall be put into force against the property or effects of such person in respect of the debts of the company, and

(ii) no proceedings of any sort may be commenced against such person in respect of the debts of the company.

(3) Subject to subsection (2), no other proceedings in relation to the company may be commenced except by leave of the court and subject to such terms as the court may impose and the court may on the application of the examiner make such order as it thinks proper in relation to any existing proceedings including an order to stay such proceedings.

(4) Complaints concerning the conduct of the affairs of the company while it is under the protection of the court shall not constitute a basis for the making of an order for relief under section 205 of the Principal Act.

6 Effect on receiver or provisional liquidator of order appointing examiner.

6.—(1) Where the court appoints an examiner to a company and a receiver stands appointed to the whole or any part of the property or undertaking of that company the court may make such order as it thinks fit including an order as to any or all of the following matters—

(a) that the receiver shall cease to act as such from a date specified by the court,

(b) that the receiver shall, from a date specified by the court, act as such only in respect of certain assets specified by the court,

(c) directing the receiver to deliver all books, papers and other records, which relate to the property or undertaking of the company (or any part thereof) and are in his possession or control, to the examiner within a period to be specified by the court,

(d) directing the receiver to give the examiner full particulars of all his dealings with the property or undertaking of the company.

(2) Where the court appoints an examiner to a company and a provisional liquidator stands appointed to that company, the court may make such order as it thinks fit including an order as to any or all of the following matters—

(a) that the provisional liquidator be appointed as examiner of the company,

(b) appointing some other person as examiner of the company,

(c) that the provisional liquidator shall cease to act as such from the date specified by the court,

(d) directing the provisional liquidator to deliver all books, papers and other records, which relate to the property or undertaking of the company or any part thereof and are in his possession or control, to the examiner within a period to be specified by the court,

(e) directing the provisional liquidator to give the examiner full particulars of all his dealings with the property or undertaking of the company.

(3) In deciding whether to make an order under subsection (1) (a) or (b), or subsection (2) (c), the court shall have regard to whether the making of the order would be likely to facilitate the survival of the company, and the whole or any part of its undertaking, as a going concern.

(4) Where the court makes an order under subsection (1) or (2), it may, for the purpose of giving full effect to the order, include such conditions in the order and make such ancillary or other orders as it deems fit.

(5) Where a petition is presented under section 2 in respect of a company at a date subsequent to the presentation of a petition for the winding-up of that company, but before a provisional liquidator has been appointed or an order made for its winding-up, both petitions shall be heard together.

7 Powers of an examiner.

7.—(1) Any provision of the Companies Acts relating to the rights and powers of an auditor of a company and the supplying of information to and co-operation with such auditor shall, with the necessary modifications, apply to an examiner.

(2) Notwithstanding any provision of the Companies Acts relating to notice of general meetings, an examiner shall have power to convene, set the agenda for, and preside at meetings of the board of directors and general meetings of the company to which he is appointed and to propose motions or resolutions and to give reports to such meetings.

(3) An examiner shall be entitled to reasonable notice of, to attend and be heard at, all meetings of the board of directors of a company and all general meetings of the company to which he is appointed.

(4) For the purpose of subsection (3) “reasonable notice” shall be deemed to include a description of the business to be transacted at any such meeting.

(5) Where an examiner becomes aware of any actual or proposed act, omission, course of conduct, decision or contract, by or on behalf of the company to which he has been appointed, its officers, employees, members or creditors or by any other person in relation to the income, assets or liabilities of that company which, in his opinion, is or is likely to be to the detriment of that company, or any interested party, he shall, subject to the rights of parties acquiring an interest in good faith and for value in such income, assets or liabilities, have full power to take whatever steps are necessary to halt, prevent or rectify the effects of such act, omission, course of conduct, decision or contract.

(6) The examiner may apply to the court to determine any question arising in the course of his office, or for the exercise in relation to the company of all or any of the powers which the court may exercise under this Act, upon the application to it of any member, contributory, creditor or director of a company.

(7) The examiner shall, if so directed by the court, have power to ascertain and agree claims against the company to which he has been appointed.

8 Production of documents and evidence.

8.—(1) It shall be the duty of all officers and agents of the company or a related company to produce to the examiner all books and documents of or relating to any such company which are in their custody or power, to attend before him when required so to do and otherwise to give to him all assistance in connection with his functions which they are reasonably able to give.

(2) If the examiner considers that a person other than an officer or agent of any such company is or may be in possession of any information concerning its affairs, he may require that person to produce to him any books or documents in his custody or power relating to the company, to attend before him and otherwise to give him all assistance in connection with his functions which he is reasonably able to give; and it shall be the duty of that person to comply with the requirement.

(3) If the examiner has reasonable grounds for believing that a director, or past director, of any such company maintains or has maintained a bank account of any description, whether alone or jointly with another person and whether in the State or elsewhere, into or out of which there has been paid—

(a) any money which has resulted from or been used in the financing of any transaction, arrangement or agreement particulars of which have not been disclosed in the accounts of any company for any financial year as required by law; or

(b) any money which has been in any way connected with any act or omission, or series of acts or omissions, which on the part of that director constituted misconduct (whether fraudulent or not) towards that company or its members;

the examiner may require the director to produce to him all documents in the director's possession, or under his control, relating to that bank account; and in this subsection “bank account” includes an account with any person exempt by virtue of section 7 (4) of the Central Bank Act, 1971, from the requirement of holding a licence under section 9 of that Act.

(4) An examiner may examine on oath, either by word of mouth or on written interrogatories, the officers and agents of such company or other person as is mentioned in subsection (1) or (2) in relation to its affairs and may—

(a) administer an oath accordingly,

(b) reduce the answers of such person to writing and require him to sign them.