The State’s long-standing preventive restructuring framework in examinership is internationally recognised and has proven to be a successful tool for restructuring in its current form.
However, I know that the cost of examinership is prohibitive for smaller businesses. That is why I wrote to the Company Law Review Group (CLRG) in July this year, requesting it to consider the issue of rescue for small businesses.
The CLRG is a statutory advisory body charged with advising the Minister for Enterprise, Trade and Employment on matters pertaining to company law. Its membership is broad and representative of key stakeholders in the area such as ISME, IBEC, ICTU, the Revenue Commissioners, insolvency and legal practitioners and regulators, making it uniquely well positioned to provide an informed view on the matter.
I requested that the CLRG conduct its review in the context of reducing the costs and administrative burden associated with rescue so as to make it more accessible to SMEs under the following terms of reference:
1. Examine and make recommendation as to how the statutory scheme of arrangement provisions of the Companies Act 2014 might be adapted to provide a rescue framework for SMEs.
2. Examine and make recommendation as to ways in which key elements of the examinership process, including a stay on enforcement proceedings and a cross-class cram-down, might be incorporated into a rescue framework for SMEs.
3. Other EU Member States provide for voluntary restructuring processes, with a strong emphasis on creditor agreement. Examine and make recommendation as to whether such a process is desirable in an Irish context with particular emphasis on the French framework (mandate ad hoc procedure).
4. Any other recommendations the CLRG consider appropriate.
The CLRG’s Report has just been received in my Department and its recommendations will require careful consideration. This is a complex area of law. There is a delicate balance between sometimes competing stakeholders and it is important not to create a situation whereby we provide a framework for the rescue of one company at the expense of the viability of another.
I remain committed to exploring ways in which we can support SMEs while also ensuring the appropriate safeguards remain in place for creditors and employees.
