Law Flashcards
Company conclusion and examinerships
Explain the term Deed of Debenture or court order
Receiver goes into a company to realise a charged asset and pay debt owed to the creditor.
Who can be disqualified as a receiver ?
company
An undischarged bankrupt
Officer /servant within last 12 months Partner/employee of officer
Spouse, civil partner, parent, brother,
List the powers of a receiver
- control of charged property *Lease, hire, dispose of property
*Borrow money on the security of the property
*Convert the property into money
*Repair, renew, enlarge the property
*Carry on any business of the company - discharge employees on behalf of the company *
List the effect of receivership
Floating charges crystallise
* Power of company/directors is suspended
* Company CAN continue trading
List the duties of a receiver
Notify - CRO and public
have Reasonable Skill and Care – obtain best price for company assets
Report – statement of affairs to the company within 14 days
Pay Debts in order of priority – receiver, fixed charges, preferential debts, floating charges, unsecured
Comply – with request from DOCE to produce receiver’s books for examination
Describe the removal of a receiver
Resignation – 1 months notice to company and debenture holders Removal by Court Order – company gone into liquidation, or on
just cause being shown
Removal by Debenture Holder
Explain the term liquidations
Bringing a company to an end Compulsory - Court ordered
Voluntary - Members Creditors
Explain the term compulsory liquidation
Court satisfied that
1. Special resolution to liquidate
2. Failed to commence trading within 12 months of
incorporation or
ceased trading for 12 months
3. All members deceased or no longer exist
4. Unable to pay debts as they fall due
5. Just and equitable to liquidate
6. Court satisfied that it is in the public interest
7. Necessary in order to protect minority shareholders
Explain the term inability to pay debts
A creditor served a demand for a minimum of €10,000 and not paid within 3 weeks
* Two or more creditors served a demand for a minimum of €20,000 and not paid within 3 weeks
* A creditor has attempted to execute judgement/order of the court
* It has been proven to the satisfaction of the court that the company is unable to pay its debts
Explain just and equitable
Examples
Deadlock in corporate management
Failure in the substratum (Company cannot achieve its objectives) Company is a corporate instrument of fraud
Company has fraudulent/illegal objective
Explain the term voluntary liquidation
Fixed period for the duration of the company expires
Special resolution to wind up the company (members’ voluntary)
Company resolves that it cannot by reason of its liabilities continue in business and a resolution is passed to liquidate (creditors’ voluntary)
Must notify the CRO within 14 days
Explain the term eligility to act as a liquidator
Be a member of a prescribed accountancy body
A practicing solicitor, who is a member of the Law Society of Ireland
A person qualified under the laws of another EEA state
A person with practical experience of liquidation and knowledge of the relevant law as registered by the IAASA
List the duties of a liquidator
Pay any class of shareholder in full
* Make compromise/scheme of arrangement with creditors/debtors
* Bring /defend legal actions on behalf of the company
* Carry on the business for beneficial winding-up
* Sell or transfer company property including goodwill and book debts
* Participate in bankruptcy of a contributory or debtor
Explain the term priority of debits
*Costs of liquidation (liquidator’s fee and expenses) *Fixed charge holders (in order of registration) *Preferential creditors
*Floating charge holders (in order of registration) *Unsecured creditors
*Members dividends declared but as yet unpaid *Shareholders
Explain the term Termination of liquidators
Termination of Liquidators Appointment
*
Expalin the term Examineships
Appointed to establish whether a company in financial difficulty can continue as a going concern, or be wound-up
* Petition to the Circuit or High Court
Company is unlikely to be able to pay its No resolution to liquidate
The period of examinership is 70 day
WHo petitions the court ?
The company
The directors
A Creditor
A member or members (not less than one tenth of paid up voting capital
Describe the eligibility to act as an examiner
Must be qualified to act as a liquidator
Petitioner must notify CRO within 3 days of petition being presented to the court
Examiner must deliver a copy of the court order 3 days
Examiner must advertise appointment within 3 days of appointment in two daily newspapers
Examiner must place a notice in Iris Oifigiuil within 21 days of appointment
List the rigths and powers of examiner
Same as statutory auditor
2. Convene and set general meetings
3. Attend Directors’ meetings
4. Agree claims on behalf of the company
Describe the effect of examinership
Company is under the protection of the court
* Cannot be wound-up
* Cannot be put into receivership
* No creditor can force their claims against the company
List the duties of an examiner
Prepare proposals for a cscheme of arrangement
preside at meetings of members and creditors
report to the court with 35 days
Perform other functions as may be directed by the court
Copy of report to the company on the same day as to the court Copy of report on written application by an interested party Copy of report to Director of Corporate Enforcement
