Dáil Éireann Debate, Wednesday - 1 June 2016
228. Deputy Niall Collins asked the Minister for Jobs, Enterprise and Innovation if sections 224, 599, 608 and 621 of the Companies Act 2014 were complied with in the closure of an organisation (details supplied); and if she will make a statement on the matter. [13983/16]
View answerThe duty of directors under section 224 of the Companies Act 2014 is owed to the company and the company alone and is enforceable in the same way as any other fiduciary duty owed to a company by its directors. The mechanism for the enforcement of directors’ fiduciary duties is through a court action.
Section 599 of the Act provides that, on the application of the liquidator or any creditor or contributory of a company that is being wound up, the court, if satisfied that it just and equitable to do so, having regard to the provisions of the section, may make an order that a related company contribute to the debts of the company being wound up. I understand that the Minister for Social Protection is currently considering how the provisions of the Companies Act 2014, including section 599, might be used to recover the moneys expended from the Social Insurance Fund. My Department is not a creditor of the company concerned and would have no locus standi in this regard.
Section 608 confers a power on the court, again on the application of the liquidator or any creditor or contributory of a company that is being wound up, to order the delivery of property or the proceeds of sale of property to the liquidator. My Department is not a creditor of the company concerned and would have no locus standi to bring an action in this regard.
The liquidator has a duty under section 624 to administer the property of a company to which he or she is appointed. This duty includes the realisation and distribution of the assets of a company in accordance with law. Section 621 sets out the order of priority of payments of debts in a winding up. The section provides that each type of debt ranks equally among itself and, where the assets of a company are insufficient to meet such debts in full, the debts abate in equal proportions. The liquidator in a winding up by the court is an officer of the court.
Ultimately it will be a matter for the court to determine in any particular case brought before it if the relevant law has been complied with.
