Corporate Recovery & Insolvency 2019

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ICLG

The International Comparative Legal Guide to: Corporate Recovery & Insolvency 2019

13th Edition

A practical cross-border insight into corporate recovery and insolvency work

Published by Global Legal Group, in partnership with INSOL International and the International Insolvency Institute, with contributions from:

Ali Budiardjo, Nugroho, Reksodiputro Macfarlanes LLP Allen & Gledhill LLP McCann FitzGerald AZB & Partners Miyetti Law Barun Law LLC Mori Hamada & Matsumoto Benoit Chambers Noerr LLP Cleary Gottlieb Steen & Hamilton LLP Paul, Weiss, Rifkind, Wharton & Garrison LLP De Pardieu Brocas Maffei Aarpi Pirola Pennuto Zei & Associati Dirican | Gozutok SCA LEGAL, SLP ENGARDE Attorneys at law Schindler Rechtsanwälte GmbH Gall SOLCARGO Gilbert + Tobin Stibbe Hannes Snellman Attorneys Synum ADV INSOL International Thornton Grout Finnigan LLP International Insolvency Institute (III) Zepos & Yannopoulos Kennedys Law Office Waly & Koskinen Ltd. Lenz & Staehelin Loyens & Loeff Luxembourg The International Comparative Legal Guide to: Corporate Recovery & Insolvency 2019

Editorial Chapters: 1 INSOL’s Role Shaping the Future of Insolvency – Adam Harris, INSOL International 1

2 International Insolvency Institute – An Overview – Alan Bloom, International Insolvency Institute (III) 4 General Chapters: 3 Directors and Insolvency: Dangers and Duties – Jat Bains & Paul Keddie, Macfarlanes LLP 7 Contributing Editor Jat Bains, Macfarlanes LLP 4 “Cross”-Border Wall? Not for U.S. Recognition of Foreign Insolvency Proceedings – Cleary Gottlieb Steen & Hamilton LLP 12 Publisher Rory Smith Country Question and Answer Chapters: Sales Director Florjan Osmani 5 Australia Gilbert + Tobin: Dominic Emmett & Alexandra Whitby 18 Account Director 6 Austria Schindler Rechtsanwälte GmbH: Martin Abram & Florian Cvak 26 Oliver Smith Senior Editors 7 Belgium Stibbe: Pieter Wouters & Paul Van der Putten 32 Caroline Collingwood 8 Bermuda Kennedys: Alex Potts QC & Mark Chudleigh 38 Rachel Williams Sub Editor 9 Canada Thornton Grout Finnigan LLP: Leanne M. Williams & Alexander Soutter 48 Jane Simmons 10 England Macfarlanes LLP: Paul Keddie & Timothy White 55 Group Consulting Editor 11 Finland Law Office Waly & Koskinen Ltd.: Tuomas Koskinen & Sami Waly 62 Alan Falach Published by 12 France De Pardieu Brocas Maffei Aarpi: Joanna Gumpelson & Philippe Dubois 68 Global Legal Group Ltd. 13 Germany Noerr LLP: Dr. Thomas Hoffmann & Isabel Giancristofano 75 59 Tanner Street London SE1 3PL, UK 14 Greece Zepos & Yannopoulos: Emmanuel Mastromanolis & Giorgos Vavatsioulas 81 Tel: +44 20 7367 0720 Fax: +44 20 7407 5255 15 Hong Kong Gall: Nick Gall & Ashima Sood 90 Email: [email protected] URL: www.glgroup.co.uk 16 India AZB & Partners: Bahram N. Vakil & Gausia Shaikh 96

GLG Cover Design 17 Indonesia Ali Budiardjo, Nugroho, Reksodiputro: Theodoor Bakker & Herry N. Kurniawan 101 F&F Studio Design 18 Ireland McCann FitzGerald: Michael Murphy & Grace Armstrong 106 GLG Cover Image Source iStockphoto 19 Italy Pirola Pennuto Zei & Associati: Massimo Di Terlizzi 112 Printed by Ashford Colour Press Ltd 20 Japan Mori Hamada & Matsumoto: Daisuke Asai & Dai Katagiri 120 May 2019 21 Korea Barun Law LLC: Thomas Pinansky & Joo Hyoung Jang 125

Copyright © 2019 22 Luxembourg Loyens & Loeff Luxembourg: Anne-Marie Nicolas & Véronique Hoffeld 132 Global Legal Group Ltd. All rights reserved 23 Mauritius Benoit Chambers: Anjeev Hurry 137 No photocopying 24 Mexico SOLCARGO: Fernando Pérez Correa Camarena & ISBN 978-1-912509-72-0 Abimael Hernández Hernández 141 ISSN 1754-0097 25 Netherlands Stibbe: Job van Hooff & Daisy Nijkamp 147 Strategic Partners 26 Nigeria Miyetti Law: Dr. Jennifer Douglas-Abubakar & Jude Odi 153

27 Russia Synum ADV: Alexander Zadorozhny & Artem Kazantsev 159

28 Singapore Allen & Gledhill LLP: Kenneth Lim & Edward Tiong 166

29 Spain SCA LEGAL, SLP: Pedro Moreira & Isabel Álvarez 172

30 Sweden Hannes Snellman Attorneys: Carolina Wahlby & Fredrik Olsson 179

31 Switzerland Lenz & Staehelin: Tanja Luginbühl & Dr. Roland Fischer 185

32 Turkey Dirican | Gozutok: Gökben Erdem Dirican & Ali Gozutok 194

33 Ukraine ENGARDE Attorneys at law: Dmytro Donenko & Artem Parnenko 201

34 USA Paul, Weiss, Rifkind, Wharton & Garrison LLP: Alan W. Kornberg & Elizabeth R. McColm 208

Further copies of this book and others in the series can be ordered from the publisher. Please call +44 20 7367 0720

Disclaimer This publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice. Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication. This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified professional when dealing with specific situations.

WWW.ICLG.COM chapter 18 ireland michael murphy

mccann Fitzgerald grace armstrong

1 Overview Troubled companies will typically seek to resolve their financial difficulties through consensual discussion and agreement with creditors, whether documented by way of a formal standstill or 1.1 Where would you place your jurisdiction on the settlement agreement. Failing such resolution, examinership, spectrum of debtor to creditor-friendly jurisdictions? receivership and liquidation are commonly availed of under Irish law. Corporate insolvency and restructuring law in Ireland has developed to respond to the needs of both creditors and debtors by balancing 2 Key Issues to Consider When the the protection of both parties’ rights. Our framework provides a Company is in Financial Difficulties broad range of flexible legislative remedies, with perhaps a marginal emphasis on the stability engendered by the protection of the rights of secured creditors. Where previously such secured 2.1 What duties and potential liabilities should the creditors overwhelmingly comprised regulated financial directors/managers have regard to when managing a institutions, with the recent advent of loan sales in the market, company in financial difficulties? Is there a specific private institutions have become the holders of security and have point at which a company must enter a restructuring frequently been involved in restructuring and enforcement actions. or insolvency process? Where such proceedings come before the courts, the courts are mindful to ensure careful adherence to contractual and statutory When a company is insolvent, or close to insolvent, its directors owe rights, to ensure that debtors are protected notwithstanding that their fiduciary duties to the creditors of the company and not to its obligations have been assigned to third parties. shareholders. Recent amendments to company law have codified directors’ duties in a non-exhaustive list of formerly pre-existing Unsecured creditors do not enjoy priority in a winding up. common law (fiduciary), equitable and statutory duties. These However, retention of title clauses are valid as a matter of Irish law include but are not limited to the duty to act honestly and and may permit the unsecured creditor to recover goods supplied. responsibly and in good faith in the interests of the company, to act in accordance with the company’s constitution and the law, not to 1.2 Does the legislative framework in your jurisdiction use the company’s property for his/her benefit, to avoid conflicts of allow for informal work-outs, as well as formal interest and to exercise due skill, care and diligence. restructuring and insolvency proceedings, and to what extent are each of these used in practice? The thrust of Irish company law sanctions against directors (which includes shadow and de facto directors) of an insolvent company is There are a comprehensive range of procedures available to an insolvent to penalise individuals who are recklessly incurring credit or who Irish company. These include liquidation, either following a court order deplete the company’s assets where the directors cannot, on any or a shareholders’ resolution, receivership (the appointment of a receiver reasonable or objective basis, believe that the company will be able by a secured creditor pursuant to contractual rights in a security to operate as a going concern, or who were knowingly party to document) and examinership, a court-managed restructuring procedure. fraudulent trading. Personal liability may be imposed for all or part of the liabilities of the company. In addition, criminal sanctions Examinership is a corporate rescue and restructuring procedure may apply. whereby an insolvent company is provided with court protection for a limited period to enable it to negotiate with creditors, seek new Directors of companies in insolvent liquidation are at risk of being investment and write down its liabilities. subjected to restriction orders where they cannot show that they acted honestly and responsibly in relation to the affairs of the Irish company law also provides a mechanism for a company to company. If restricted, a director is prevented from continuing to reach a compromise with its creditors on a less structured basis than act as a director unless the company meets certain minimum paid up examinership and the recently revised company legislation reduced share capital requirements. the number of court appearances required for such compromises. These scheme of arrangement provisions are very similar to the No specific mandatory triggers exist under Irish law for entry into English scheme provisions. Until recently, such arrangements have restructuring or insolvency procedures. There are two tests for not been widely availed of. However, there has been a noticeable insolvency: the balance sheet test; and the cash flow test. If a focus on our scheme provisions. company is considered to be insolvent under either of the above

106 www.iclg.com iclg to: corporate recovery & insolvency 2019 © Published and reproduced with kind permission by Global Legal Group Ltd, London apply tothecourtforrelief. may interests their to oppressive is which manner a in conducted being are company the of affairs the show can who Shareholders the liquidator’s feesandexpenses. approve and liquidator the of activities the oversee to is committee of committee a of duty a main The creditors. by liquidation, appointed typically is inspection every In proceedings. oppression of Director the contributories, Corporate Enforcement or and any person entitled to bring shareholder creditors its of any creditors, its itself, company the by presented be may petition up winding A appointment. his of days the three within for presented petition is examiner a an if of appointment removed be will receiver a and petition the of presentation of date the to prior days continuous three a of period a for to appointed been relation has receiver in a which examinership of respect for in company petition a hear to refuse will main method the by which a is secured creditor receiver will enforce its a security. of Aappointment court The receiver. a appoint to prevent the appointment of an examiner will typically move quickly Secured creditors who apprehend a risk of examinership and wish to any kindagainstthecompany. of action enforcement take to or security their enforce to action any includes term (which taking from prevented company are landlords) and creditors title of retention the of creditors the protection, court under placed been has company a once examinership, an In directors, acreditorormember. the for its itself, company the by made be can examiner an application of appointment An creditors. a its obtain by can action difficulty from moratorium financial in company a which by only means the is examinership An situation. company’s the influence Secured creditors, unsecured creditors and shareholders can directly Whichotherstakeholdersmayinfluencethe 2.2 how to reduce the balance sheet deficit in the long on the cash flow test in the short term while at th bank borrowings. It is therefore more important fo compan the ifparticularly triggered, be easily can testrevolves around thevaluation theofcompany’s under constant review. The difficulty with applyin tests, its directors will need to keep their decisi mccann Fitzgerald iclg to: corporate recovery &insolvency 2019 such must bebrought. of return the direct may property. There is no prescribed period within which court an application the members, or creditors the effectthat of such disposal was to perpetrate a fraud on the company,show its to possible is it and of disposed is property Where aside. set be may transactions the successful, is challenge such where and company the to appointed liquidator a others, among by, attacked Certain transactions to which an insolvent company is party may be Inwhatcircumstancesaretransactionsenteredinto 2.3 © Published and reproduced with kindpermission byGlobal LegalGroup Ltd, London of yourjurisdiction? Are moratoriaandstayson retention oftitlearrangements)applicabletothelaws (such aslandlords,employeesorcreditorswith which applytoparticulartypesofunsecuredcreditor For example,arethereanyspecialrulesorregimes the actionthattheycantakeagainstcompany? company’s situation? Are thereanyrestrictionson enforcement available? challenge? Whatremediesareavailable? by acompanyinfinancialdifficultiesatriskof on to continue to trade e same time planning er term. g the balance sheet r directors to focus assets. This test y has significanthas y u wee t eivs t a a esnbe rset f survival, of prospect reasonable a has examinership maybeamoreviableoption. it believes it where but a where Accordingly, company perceives a significant threat Commissioners. of liquidati Revenue the including creditors, non-secured by actions to vulnerable be will and period standstill provide to difficulty will not be able to avail of immunity from suit during this willing financial be in company a negotiation, of period may a during agreements creditors While frequently creditors occur. and debtors between as work-outs Informal is nocurrentlegislative basisforapre-packagedsale. on the basis that a pre-ordained outcome is to be implemented, there in practice the appointment of a receiver or examiner may take place while and occur, do sales pre-packaged and swaps Debt-for-equity proposals the confirm liquidation is the inevitable consequence not of a fail will court a prejudicial, arrangemen of scheme a for proposalsexaminer’s the not have a reasonable prospect of survival as a goi If an objecting party establishes that a company in the proposedinvestor. to issued be will shares new and cancelled be will shares Existing company. the of ownership of change a in result will examinership company’s liabilities. Unless an existing shareholder the is the investor,of guarantors against or creditors secured including creditors, by taken be can action enforcement no examinership, of period the During days. 100 of maximum a to up of period a for company the against taken being action enforcement any prevents which period protection company’sor the stay” of “legal a and liabilities; current insolvent main three an comprises components: new investment which into for the company; a forced companies) write down procedure of group rescue (or company main the is Examinership . Isitpossibletoimplementaninformal work-outin 3.1 . Whatformalrescueproceduresareavailableinyour 3.2 certain circumstancesbedeclaredinvalid. in can up winding the of created commencement the charge of months floating 12 within a up, wound being is company a Where such giving to view creditor apreferenceareliabletobesetaside. a with made person) connected a of in favour if years two within (or up winding a of commencement the of months six within place taking creditor a of favour in Transactions certain voidable andadirectormayriskpersonalliability. within except is company transaction a such breach, a of event the In conditions. specified the with transactions entering from restricted also are Directors offence. criminal a is legislation of the company against a third party with notice and a breach of the shares in that company. Such transactions are voidable at the option of acquisition the with connection in assistance financial provides company a where transactions certain prohibits law company Irish RestructuringOptions 3 your jurisdiction? cram-down dissentingclassesofstakeholder? to cram-downdissentingstakeholders?Canyou to seekanadvantage?Doyourproceduresallowyou or threatenaction(includingenforcementofsecurity) creditors and/orshareholdersblocksuchprocedures packaged salespossible?To whatextentcan companies? Are debt-for-equityswapsandpre- jurisdiction torestructuretheliabilitiesofdistressed www.iclg.com ed examinership. examinership does on or receivership, ng concern or that t are unfairly are t However, . ireland 107 ireland 108 ireland © Published andreproduced withkindpermission byGlobalLegal GroupLtd,London www.iclg.com be circumstances certain in crammed down. can creditor secured a of liabilities The charge. the of holder the the to of accounted be value must sold property market The company. the of survival the facilitate would this that basis the on charge floating property a or of fixed a to dispose subject to approval court obtain may examiner The scheme. an unsecured creditor, the liability on him being d companies to repudiate expensive leaseholds. The l av frequently is provision This loss. his of value unsecured creditor in the examinership and the court may assess the an becomes repudiation the of result a as loss suffers who person Any parties. both by rendered be to remains payment than other performance of element some which under contract any repudiate court, the of approval the may,with examinership in company The any claimfordamageswhichmayarise. as such company, the against rights exercising from prevented are creditors its court, the of protection the under is company a where provide that examinership activates a right of term Examinership does not itself terminate contracts, a Whatimpactdoeseachrestructuringprocedurehave 3.5 if itisunfairlyprejudicialtoanyclassofcreditors. or tax avoid to is purpose its if scheme a approve not will court the and proposals the of favour in voted has creditors impaired of one class least at if so do only may It proposals. the confirming order an make must court the company, a of creditors and members the which is filed in court. In order for a scheme to become binding on of or against the proposals. The examiner will then prepare a report convene meetings of each class of creditors who may vote in favour must examiner the proposals, his formulated has he Once survival. company’s the facilitate will of implemented, if scheme which, a arrangement for proposals prepare to shareholders and creditors investors, with negotiates and rescued be can business the of parts which establishes finances, company’s the analyses examiner the the of directors The the company remain in place and the company continues to court. trade, while and the Court) by monitored Circuit closely is the process circumstances, certain in (or Court High the to petition a of way by commenced is examinership An Whomanageseachprocess? Isthereanycourt 3.4 going a as survival be of concern. prospect reasonable circumstances) a has exceptional company the in (save that verifies expert’swhich independent report, an by accompanied must examiner an concern. going of a appointment as the business for application An there is a reasonable prospect of survival of the whole or part of the and company; the up wind to made) been order any has (nor passed been has resolution no insolvent; become to likely or insolvent is company the threefold: are examinership into entry for criteria The Whatarethecriteriafor entry intoeachrestructuring 3.3 mccann Fitzgerald involvement? procedure? provisions beupheld? outstanding obligations?Will terminationandset-off are thereforthosewhoforcedtoperformtheir perform outstandingobligations?Whatprotections on existingcontracts? Are thepartiesobligedto lbeit most contracts ischarged under the ination. However, ailed of by tenant by of ailed andlord becomes iclg to: corporate recovery &insolvency 2019 any newfinanceprovidedtoacompanybywayofrescuefunding. for law Irish under exists protection specific No company. the of liability over other creditor claims in the event of the subsequent liquidation such any to priority affords certification Such incurred. be should debt the that company the is of survival it the that for view necessary the forms he if incurred is it time the at liability a company.the of assets certify the to of power the has examiner An out met be will and significant be can examinership an of costs The rdtr’ outr lqiain cmay a b pae i a in placed be may company a A as up liquidation. wound voluntary creditors’ be it that and business, its continue liabilities its of reason by cannot it that resolving meeting, general a in company the by initiated be may Agrounds. creditors’liquidation voluntary interest public or equitable and just on or insolvent, is company the if court the by liquidation compulsory in placed be Acan company receivership isnotaprocessforthedissolutionofcompany. main the is method document by which a secured creditor enforces its security. 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Howiseachrestructuringprocess funded?Isany 3.6 that acompanyisinexaminership. Set-off provisions will be upheld and can be applie favourable more receivership. a in result or liquidation a in case the be would than creditors the for outcome should proposals examiner’s the Further, due. fall they as incurred liabilities new all discharge and itself fund to able be must company the examinership, the During underlying debtiscrammeddownintheexaminership. the if thereby even guarantor, the guarantees, pursue to the right creditor’s the under protecting rights secured their by preserve taken to be creditors must steps certain and examinership an in the company. commenced Particular rules govern the enforcement of guarantees be may of proceedings debts of respect in liable parties third other or guarantors against no examinership, an During . Onwhatgroundscanacompanybeplacedintoeach 4.2 Whatis/arethekeyinsolvencyprocedure(s)available 4.1 InsolvencyProcedures 4 protection giventorescuefinancing? winding upprocedure? to windupacompany? d, notwithstanding ireland h lqiao t raie t scrt ad con t i fr the rank for will it claims ahead offloatingcharge realisations. preferential to of account claims the and However, security proceeds. its realise to liquidator the allow to or receiver a appoint to elect may creditor secured the and provisions avoidance liquidation, any of a foul fall not by do rights unaffectedsuch assuming are creditors secured of rights The against thecompany. proceedings continue or commence to order in required is court the of leave liquidator,the provisional a or liquidator a of appointment the company, if it is initiating the winding up process. Following the or creditor petitioning the by nominated Typically,is liquidator the expenses. the by and costs fees, powers liquidator’s the of certain payment sanction and liquidator of exercise the the liquidation, authorise court can a of committee case the the in by a As formed by is creditors. overseen committee company’s a be such may if but inspection, of liquidator committee a liquidation, by voluntary managed is insolvent which an to contrast in shareholders, company’s the by controlled be can liquidation Avoluntary solvent involvement. court without place take liquidations Voluntary a of directors the of conduct the company inliquidation. to relation in Director the to report ensuring to obliged is liquidator a with and law company with compliance tasked is Enforcement Corporate of Director The and costs fees, expenses. liquidator’s the of payment sanction and certain powers of exercise the the authorise throughout can committee committee The the liquidation. to report to obliged is liquidator recent the and formed be now may company) the of creditors (comprising Court, High the inspection of Acommittee position. by this altered change legislative managed actively previously were liquidations compulsory While claims. of distribution and assets A liquidator is appointed to manage the realisation of the company’s Whomanageseachwindingupprocess?Isthereany 4.3 months. will be in a position to meet its liabilities in full within a period of 12 it that confirm to position a in are directors its if liquidation solvent mccann Fitzgerald iclg to: corporate recovery &insolvency 2019 the in interested person any – forced be may hand liquidator’s The money. of payment the to or act onerous the any of to performance possessor the binding its of reason by saleable readily not (a) unprofitable contracts, or (b) any property which is unsaleable or the things, other of amongst of, consists which up wound being property company any disclaim liquidation, the of commencement may,liquidator The the after months 12 within approval, court with restructuring or process arecommonandenforceableagainstaliquidator. insolvency an into company the by entry the on contract the of termination for allow which provisions Contractual Whatimpactdoeseachwindingupprocedurehave 4.5 How arethecreditorsand/orshareholdersableto 4.4 © Published and reproduced with kindpermission byGlobal LegalGroup Ltd, London the enforcementofsecurity)? court involvement? set-off provisionsbeupheld? perform outstandingobligations?Will terminationand on existingcontracts? Are thepartiesobligedto restrictions ontheactionthattheycantake(including influence eachwindingupprocess? Are thereany euiy ouet usat o hc te eevr a been has receiver the which to appointed. pursuant document security The order of priority of claims in a receivership will be set out in the examiner willrankinprioritytoafloatingcharge creditor. the an by certified examinership, expenses Any creditors. secured of those including an claims, following over all over priority liquidation have expenses and a costs examiner’s of event the In membersandcontributories. (5) unsecuredcreditors;and (4) floatingcharge holders; (3) preferential creditors (comprising employee entitlements and (2) thecostsandexpensesofliquidation; (1) as are liquidation a in follows: priorities of rights order the set-off apply, of may application which the trust following and tax), returned withholding monies employee unpaid (comprising creditors preferential super charge, fixed a of have holders the to assets distributed been Once realisation. such of out retained be agreement by will realisation such of respect in expenses and costs holder,his passu Irish law is that claims, subject to certain exceptions, shall rank under company a of property of distribution of principle key The The commencement of insolvency proceedings does not are rare. applications such both practice, In resolution. or order up winding a of annulment the for apply to possible also is It void. been have or liquidator the by to made dissolution the declaring order an party,make interested another being application an on period year two- a within may court the dissolved, been has company a Where . 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In addition, contractual credits “mutual of off set rules, set-off insolvency statutory Under disclaim. to court to apply to intends he that days 28 within notice give must he circumstances, such in disclaim to wishes liquidator the if and disclaim will he not or whether decide to him require may property n ay r-xsig a laiiis il e el wt i the in with dealt be will liabilities liquidation or receivership and are likely to have preferential status. tax pre-existing any and appointment their on tax for register will receiver or liquidator A withholding taxes,capitalgainstax andstampduty. restructuring or insolvency an VAT,tax, corporation example, for including, in procedure, employee way ordinary the be in to continue incurred will liabilities tax however, liability; tax a to rise Tax 5 . Where a liquidator realises assets on behalf of a fixed charge unpaid taxes); including thecostsofprocedure? restructuring orinsolvencyprocedure? future? www.iclg.com ireland per se give pari 109 ireland 110 ireland specific be applicabledependingonthecircumstances. under may provides certain exemptions for insolvency proceedings which may employees legislation The purchaser. its the to transfer automatically legislation to the and liabilities employees the the employers’ liquidation, of in effected company be the to of proposed business or effected is transfer a Where to paid amounts all for employees and will rank as a preferential creditor in the liquidation. liquidation the in claim to entitled then © Published andreproduced withkindpermission byGlobalLegal GroupLtd,London www.iclg.com the in provided otherwise as subject have, proceedings” “main Regulation, Insolvency the Under court. Irish an before instituted main certain (“ of interests” “centre its to has incorporated) Irish subject is company insolvent Regulation, Insolvency the not the or (whether company insolvent foreign a where exclusions, of virtue By Cancompaniesincorporatedelsewhereuse 7.1 “ (the fund insolvency government-funded thresholds) certain which cannot be met to by the insolvent company will be paid out of a up payments redundancy and wages, pay unpaid holiday example, for a Certain of, respect as (in creditors. employees rank by charge claims floating typically of will ahead claim, claims preferential Employee liquidator. the by terminated generally are employment of contracts liquidation, a In in theexaminer’s proposals. employees, by claims down crammed be can Pre-existing claims, contingent or prospective including traded. be to continue will not terminate employment contracts as the business of the company Similarly, in an examinership, the appointment of the examiner will his to appointment willhavepreferentialstatusinthereceivership. prior accrued which wages) to unpaid of choose respect in example, may receiver (for a employees by claims any and contracts employment terminate However, contracts. employment terminate not will receiver a of appointment the receivership, a In Whatistheeffectofeach restructuringorinsolvency 6.1 tax rate of 25%, as opposed to the standard rate of ca which inreceived is currently ceased, taxed as a have post-cessation rec to likely is trade assets, simpl is receiver or liquidator a liq If areceivership. in ceased has trade whether is question key A finalising theliquidation. before clearance tax obtain to obliged be will liquidation voluntary the by down solvent a to pursuant written appointed Aproposals. examiner’sliquidator subsequently invoices of value full the for tax gains liability or a VAT capital a trigger liability where VAT may debt deductions have been of claimed down write the However, scheme a confirm not which is unfairly prejudicial to any creditor, including the Revenue. will court the however, down; crammed In an examinership, liabilities to the Revenue Commissioners can be mccann Fitzgerald Cross-Border Issues 7 Employees 6 proceedings inyourjurisdiction? restructuring proceduresorenterintoinsolvency employees haveandwheredotheyrank? procedure onemployees?Whatclaimswould COMI ) n rln, mi poedns cn ny be only can proceedings” “main Ireland, in ”) Fund eipt at a corporation y realising trading realising y 12.5%. ) Te ud is Fund The ”). e h income the se iain r a or uidation iclg to: corporate recovery &insolvency 2019 law Irish means thatinpracticethisisrare. under available procedures and remedies of range The the of recognition process undercommonlawprinciples. for Court High insolvency the to the apply Regulation, may officeholder Insolvency the of scope the outside fall proceedings the Where Ireland. in recognised be automatically will proceedings such applies, Regulation Insolvency the insolvency which to or restructuring of those are proceedings the elsewhere. Where commenced processes recognition a contain the not for does mechanism legislation domestic cross- and on Law insolvency Model border UNCITRAL the adopted not has Ireland more related companies. The court must have regard to whether the or one to him appoint to made be may application an later, or time same the at either company, a to appointed is examiner an Where the firstcompany. have relied on the fact that another company is or has up been related to wound being company the of creditors the because or another, An order will not be made simply because one company is related to the of businesses the companies havebeenintermingled. which to extent the the and of companies; other any of up winding the of any of the omissions or actions the to attributable are companies to rise gave the that which to circumstances extent the companies; other the of any of creditors the towards companies the of any of the conduct the companies; of other any of management the in part took companies the of any a court will have regard to (among other things): the extent to which In deciding whether it is just and equitable to make a pooling order, This isknownasapoolingorder. companies may be wound up together as if they were one company. up, and if a court is satisfied that it company.is wound just and being equitable to group are do so, companies both related another more or by two where However, on taken be automatically not will liquidation in company a of liabilities and assets the accordingly and entity legal separate a as with dealt be will company Irish Each . Docompaniesincorporatedinyourjurisdiction 7.3 Istherescopeforarestructuring orinsolvency 7.2 up bytheIrishCourt. company may,Regulation Insolvency the wound be circumstances, certain in foreign a of provisions the Further,to subject not is which country a in incorporated court). Irish the by confirmation creditors’and examinership court, Irish (with up winding voluntary of the Insolvency Regulation include compulsory winding up by the the Denmark). In the case of of Ireland, main proceedings for the purposes all encompass such debtors’ assets as and creditors located in the EU and (with the exception of scope universal Regulation, . Howaregroupsofcompaniestreatedonthe 8.1 Groups 8 other jurisdictions?Isthiscommonpractice? your jurisdiction? for co-operationbetweenofficeholders? restructure orenterintoinsolvencyproceedingsin process commencedelsewheretoberecognisedin insolvency ofoneormoremembers?Istherescope ireland oriae jit etutrn pa ad ek sa o asset of stay a seek and realisation measures. plan restructuring joint can a practitioners Insolvency coordinate possible. where a whole, a as and group the companies rescuing of chance greater group a afford to procedure insolvent coordination insolvency various and from courts practitioners insolvency of cooperation cross-border on provisions including a proceedings, insolvency contains group on chapter Proceedings Insolvency on regulation EU recast The The period available forthefirstcompany. the to limited company. is company related related the a the of period is protection of there survival that of satisfied be prospect must reasonable and both or company the or related company the of survival the facilitate would appointment mccann Fitzgerald iclg to: corporate recovery &insolvency 2019 © Published and reproduced with kindpermission byGlobal LegalGroup Ltd, London domestic businessesandemergingIrish companies.We alsohavemanyclientsintheStateandsemi-Statesectors. major corporations, international include clients Our companies. services financial and industrial commercial, to primarily services, legal of range full market a provide and WeYork. New clients and Brussels London, by in offices endorsed overseas have is we and pre-eminence Dublin in located its is office and principal Our areas alike. practice commentators many in leader market the being as recognised consistently is firm The McCann FitzGeraldisoneofIreland’s premierlawfirms,with77partnersandalmost350lawyersprofessionalstaff. the area ofcorporaterecoveryandinsolvency.in extensively lectured and written has He Europe. INSOL and Practitioners Insolvency of Society Irish on the of member a is and Michael reorganisations solvent on mitigating insolvencyriskintransactionsthemaking. advises are difficulties Michael financial when all identified, advising as well of As creditors. behalf other on liquidations stakeholders including companies, directors, office and holders, banks and receiverships examinerships, restructurings, significant of number a in advising of experience wide has He team. Restructuring and Insolvency the of Head is Michael R:www.mccannfitzgerald.com URL: michael.murphy@ +35318290000 Email: Tel: Ireland Dublin 2 Riverside One,SirJohnRogerson’s Quay McCann FitzGerald Michael Murphy mccannfitzgerald.com rln i pry o h rcs E rglto o Insolvency on regulation EU recast the to Proceedings. party is Ireland the of examinership or60-dayperiod,whicheveristheearlier. end the at creditor the to aircraft the of the possession deliver perform to agree must he then to that do not does and he If full. defaults in obligations company’s all cure to days 60 at have, most, will examiner the Convention, Town Cape the of scope or leases or has mortgaged aircraft under interests that fall within the the event of an examinership of an airline or a company which owns The most significant change arising from this is in examinership. In Convention. Town Cape in the to Protocol contained Aircraft the of XI A” Article “Alternative so-called incorporate to amended also was law insolvency Irish anticipated. not is reform legislative the in which deal with corporate provisions rescue and resulting insolvency. all including Accordingly, substantive 2015, one, into acts in 12 of modernised consolidation was law company Irish . Arethereanyothergovernmental proposalsfor 9.1 eaf f rne f ate i rsrcuig atr, insolvency matters, bankruptcy anddebtcollectionproceedings. restructuring in parties and examinership and receivership of liquidation, including proceedings range a on acting of experience has behalf Grace such, As FitzGerald. McCann at Grace is a Senior Associate on the Insolvency and Restructuring team Reform 9 in yourjurisdiction? reform ofthecorporaterescueandinsolvencyregime R:www.mccannfitzgerald.com URL: grace.armstrong@ +35318290000 Email: Tel: Ireland Dublin 2 Riverside One,SirJohnRogerson’s Quay McCann FitzGerald Grace Armstrong canizeadcmmccannfitzgerald.com www.iclg.com ireland 111 ireland Current titles in the ICLG series include:

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