Examinership Part One Flashcards
What is examinership?
A court-supervised process that protects a financially troubled company from creditors while exploring recovery options.
Which legislation introduced examinership?
Companies (Amendment) Act 1990, now governed under Companies Act 2014 (Part 10).
What are the conditions for appointing an examiner under s.509 CA 2014?
Company is or is likely to be unable to pay its debts
No winding-up in progress
Reasonable prospect of survival
What is the standard of proof for examinership petitions post-1999?
Petitioner must prove a ‘reasonable prospect of survival’ – higher burden than earlier test.
Who can present a petition to appoint an examiner?
The company, its directors, members holding ≥10% of share capital, or creditors.
What must accompany a petition for examinership?
Nomination of examiner with consent, and an Independent Expert’s Report.
What is required in the Independent Expert’s Report (s.511 CA 2014)?
Opinion on survival
Conditions needed
Required funding and sources
Debts to be paid
Creditors’ committee recommendation
Best-interest-of-creditors test
What happens if a receiver has been in place for 3+ days?
Court cannot appoint an examiner – s.512(4) CA 2014.
Can a company in liquidation enter examinership?
No, except where a provisional liquidator is appointed – s.522(2) CA 2014.
What is the ‘best-interest-of-creditors’ test?
Creditors should be no worse off under restructuring than in liquidation or best alternative.
What does s.518 CA 2014 say about good faith?
Court can decline petitions if there is a lack of disclosure or good faith by the petitioner or expert.
What did Re Tuskar Resources decide?
Rejected examinership as no ‘reasonable prospect of survival’ – petitioner failed burden of proof.
Why was examinership denied in Re Missford Ltd?
Directors failed to comply with company and tax law – court refused protection.
What was the issue in Re Tivway Ltd?
Schemes didn’t provide for survival as a going concern – just held assets awaiting market recovery.
When is interim examiner appointment allowed?
In urgent ex parte applications, with independent expert’s report – s.512(7) & s.515(2).
