Skip to main content
Normal View

Proposed Legislation

Dáil Éireann Debate, Thursday - 21 February 2013

Thursday, 21 February 2013

Questions (21, 49)

Dara Calleary

Question:

21. Deputy Dara Calleary asked the Minister for Jobs, Enterprise and Innovation if he will support the proposed structured non-judicial debt settlement system outlined in the report submitted to him by the Company Law Review Group in September; and if he will make a statement on the matter. [9096/13]

View answer

Timmy Dooley

Question:

49. Deputy Timmy Dooley asked the Minister for Jobs, Enterprise and Innovation when he will make a decision on the structured non-judicial debt settlement system proposed by the report submitted to him by the Company Law Review Group in September; and if he will make a statement on the matter. [9082/13]

View answer

Written answers

I propose to take Questions Nos. 21 and 49 together.

The Company Law Review Group (the CLRG) spent several months last year considering the feasibility of introducing a new structured and non-judicial debt settlement scheme for small and medium sized companies. I received the CLRG’s report at the end of September and, shortly after that, I brought that report to the attention of the Government. The CLRG made five recommendations, which it separated into two categories – those that can be implemented straightaway and those that require more analysis.

The CLRG’s main conclusion was that there are some amendments that could be made to the existing process of examinership that would reduce costs and make it more easily available to small private companies. Accordingly, its first recommendation was that the Companies Acts be amended to allow small private companies to apply directly to the Circuit Court, rather than first to the High Court. As for medium sized companies, the CLRG recommended that they continue to have the option of going to the High Court for the appointment of an examiner. I have agreed with these recommendations and included provisions to give effect to them in the Companies Bill 2012, which was published on 21 December 2012.

The CLRG went on to say that there could be scope for reducing the role of the courts in examinership further, and made proposals for the appointment of an examiner by an administrative, rather than judicial, decision. The CLRG envisaged that this procedure would require the involvement of a State agency to exercise this administrative decision, and identified the forthcoming new Insolvency Service, to be established under the Personal Insolvency Act 2012, as the most appropriate agency. However, it acknowledged that implementation of these recommendations would require more consideration, not least as the Insolvency Service is not yet in operation.

I and my Department are assessing the appropriateness and practical implications of the State providing an administrative body to facilitate SME restructuring. We will also take into account the experience of the Insolvency Service once it has been established and in operation for a while.

For clarity, a small company is defined by section 8 of the Companies (Amendment) Act 1986. That section says that a private company shall qualify as a small company in respect of any financial year if, in that year and the one immediately preceding it, the company satisfies at least two of the following conditions –

a) Its balance sheet total for that year shall not exceed €4.4 million

b) The amount of its turnover for that year shall not exceed €8.8 million, and

c) The average number of people employed by the company in that year shall not exceed 50.

Question No. 22 answered with Question No. 6.
Top
Share