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The Examinership process was introduced in the Companies (Amendment) Act 1990 as a means to allow viable companies to survive when facing insolvency.
What is Examinership?
Examinership is an effective tool that may be available to companies that are in financial distress, yet still have an underlying viable business. It is a formal process that provides breathing space to companies in distress, allowing for a rescue plan to be formulated by an independent, court-appointed Examiner. A successful examinership process will result in the survival of the company, and facilitate a restructure of the company’s financial affairs to achieve solvency and survival.
What does an Examinership process look like?
The examinership process runs for a period up to 70 days, with a potential to extend up to 100 days.
1. An application is brought before the Courts to appoint an Examiner. Accompanying this application is an Independent Expert’s Report, which states that the Company has a reasonable prospect of survival.
2. Once appointed, the Examiner will:
- Review the financial affairs of the Company
- Assess the Company’s viability
- If viable, formulate a scheme of arrangement, setting out how the debt is proposed to be restructured to facilitate the Company’s survival.
3. The scheme of arrangement is presented to the Company and the creditors for approval.
4. The Examiner presents the outcome of the scheme to court and the court will determine whether the examinership is ultimately a success.
5. The outcome of a successful examinership process is that the Company emerges with a restructured balance sheet, and has become solvent as a result.
Why opt for Examinership?
Some advantages of a successful examinership process include:
- Protection from creditors during the examinership period.
- Restructuring and write down of existing debt.
- Survival of the Company.
- Directors’ remain in control of the Company.
- Preservation of jobs.
- Avoids liquidation.
Examinership timeline
Day 1
Petition to appoint an Examiner is heard, and a hearing is sought for approval of the appointment of an Examiner. An interim Examiner is appointed.
Day 10
Interim Examiner seeks confirmation of their appointment, and if satisfied, the Court will approve the Examiner’s appointment. The Examiner will commence the rescue plan and report.
Day 35
The Examiner will provide their report to the Court, or seek an extension to 70 days in which to file their report.
Day 70
The Examiner will provide their report to the Court, or seek an extension to 100 days in which to file their report.
Day 100
Meetings with the creditors of the Company and the shareholders of the Company will have taken place, seeking approval of the rescue plan produced by the Examiner. The Examiner will seek Court approval of the proposed rescue plan.
We have the knowledge and expertise to guide your Company through an examinership process. Should you consider examinership to be a potential option for you, we would be delighted to discuss matters with you.
