I thank Deputy Hogan for raising this matter. I am surprised that he has done so because he raised it by way of Dáil Question on 8 and 29 April and the Minister dealt adequately with the case made by him. The whole purpose of appointing Examiners is to allow companies in temporary financial difficulties to apply for the protection of the court for a period of three months.
When the Examiner is appointed he acts as an investigator and reporter and looks at the possible viability and recovery of the company. This is a different process from either a receivership or a liquidation. The Examiner is appointed under the protection of the court for a temporary period of time so that he can ensure that in the longer term the company are viable. It would be wrong in those circumstances if the Examiner did not have full power to do what is necessary to make the company viable, which is the primary purpose of his or her appointment.
It is not correct to say that difficulties in UMP arose after the Examiner was appointed. It is correct to say that the effect of appointing an Examiner is that all debts are frozen and only those debts incurred by the Examiner and those creditors who supplied goods at the request of the Examiner in order to keep the company in operation are given the protection of being paid first. They are guaranteed payment from the revenue of the company or from the disposal of assets and investments. The Examiner's expenses have first call on the revenue and the reason for this is that if a company were put into examinership and the expenses are not guaranteed, nobody would supply the essential raw materials to the company and the company would collapse.
It is not fair to say that difficulties arose in UMP since the appointment of the Examiner. What happened was that an administrative error was made in the office of UMP and 200 different cheques, amounting to £234,000, which should have been paid were not included on the Examiner's list as a result of a clerical error and as a result they were not put before the court and included on the list of people to be paid. However, the matter was satisfactorily resolved and all 200 cheques were paid on 4 May 1992.
When Ministers are in difficulties, it is nice sometimes to give guarantees that legislation will be reviewed — of course, no legislation is written on stone and neither is this legislation. However, I see no reason to review the legislation at this stage as it has acted very effectively. Since we initiated the examinership procedure, just two years ago, 126 companies, many of them very low profile companies have availed of this provision of the Act and it has helped to save companies which would otherwise have gone under. Therefore I believe it is right that the Examiner's expenses and the creditors who supply goods to the Examiner should be treated as preferential creditors and should come before anything else that has a preferential debt or those who have secured or unsecured debt. If we did not have this provision there would be no point in appointing an Examiner.
This legislation, the Companies (Amendment) Act, which brought in Part IX of the Companies Act, 1990, and the Companies Act itself will be constantly under review. If there is anything I can say about the present Minister for Industry and Commerce, it is that he is a reforming Minister who will do everything to support viable companies.
I do not support the proposition of re-establishing Fóir Teoranta. We have to get it into our heads that we cannot throw taxpayers' good money after bad. We have to operate on the basis of commercial viability. If we do not do that we will have to have higher taxes, higher foreign debt, lower economic growth and higher unemployment. Although it is often popular to call for the establishment of new banks or new companies — at one stage there were calls to nationalise Bewley's, a bun shop — we have to be sensible and operate on the basis of commercial criteria.
The Dáil adjourned at 9.55 p.m. until 10.30 a.m. on Thursday, 21 May 1992.