Law

Question 1

Explain the term Deed of Debenture or court order

Answer 1

Receiver goes into a company to realise a charged asset and pay debt owed to the creditor.

Question 2

Who can be disqualified as a receiver ?

Answer 2

company
An undischarged bankrupt
Officer /servant within last 12 months Partner/employee of officer
Spouse, civil partner, parent, brother,

Question 3

List the powers of a receiver

Answer 3

• 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 *

Question 4

List the effect of receivership

Answer 4

Floating charges crystallise
* Power of company/directors is suspended
* Company CAN continue trading

Question 5

List the duties of a receiver

Answer 5

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

Question 6

Describe the removal of a receiver

Answer 6

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

Question 7

Explain the term liquidations

Answer 7

Bringing a company to an end Compulsory - Court ordered
Voluntary - Members Creditors

Question 8

Explain the term compulsory liquidation

Answer 8

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

Question 9

Explain the term inability to pay debts

Answer 9

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

Question 10

Explain just and equitable

Answer 10

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

Question 11

Explain the term voluntary liquidation

Answer 11

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

Question 12

Explain the term eligility to act as a liquidator

Answer 12

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

Question 13

List the duties of a liquidator

Answer 13

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

Question 14

Explain the term priority of debits

Answer 14

*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

Question 15

Explain the term Termination of liquidators

Answer 15

Termination of Liquidators Appointment
*

Question 16

Expalin the term Examineships

Answer 16

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

Question 17

WHo petitions the court ?

Answer 17

The company
The directors
A Creditor
A member or members (not less than one tenth of paid up voting capital

Question 18

Describe the eligibility to act as an examiner

Answer 18

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

Question 19

List the rigths and powers of examiner

Answer 19

Same as statutory auditor
2. Convene and set general meetings
3. Attend Directors’ meetings
4. Agree claims on behalf of the company

Question 20

Describe the effect of examinership

Answer 20

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

Question 21

List the duties of an examiner

Answer 21

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