In order for any trading business to operate successfully, it must generate revenue. Countless industries have been decimated by the forced closure of businesses during the Covid-19 pandemic. It is simply impossible to generate revenue whilst shut. For example, how can a restaurant survive with no customers? The answer is simply that it cannot – with rent, wages, overheads to pay and no income being generated to meet them. It is not just the high street or small businesses that have been affected. Last week CityJet appointed an Interim Examiner. CityJet reported revenues of €265m in 2017 and now with flights grounded and no passengers, revenues are essentially wiped out. (please see our firm’s recent update on this matter): (https://www.linkedin.com/feed/update/urn:li:activity:6656957958934671360/).
Undoubtedly, the Government’s Emergency Pandemic Unemployment Payment has cushioned the blow for many businesses by providing support for employees. However, this scheme is scheduled to last until 19 June 2020, at which stage it will be tapered off. Additionally, overheads other than wages have not gone away – commercial leases being a significant issue. Make no mistake, there will be substantial unemployment and huge pain felt by the taxpayer in reimbursing the welcomed support scheme put in place by the Government. We do not pretend to be scientists but it looks like society will have to live with the “virus” until such time as a vaccine is discovered. In the meantime though, the economy simply has to reopen in as safe a fashion as possible.
You have heard the problems, now what is the solution – Examinership:
Examinership is a mechanism provided for the rescue and return to health of ailing but viable companies. The necessity for this process has never been more prevalent than during this pandemic. A company must be (a) insolvent and (b) have a reasonable prospect of survival to qualify for Examinership. A company can be afforded up to 100 days protection from its creditors (by the Circuit or High Court depending on its level of turnover), within which time they must formulate proposals for a Scheme of Arrangement which must be approved by at least one impaired class and ratified by the Court.
The optimum outcome of the process is that creditor balances are reduced, the assets of the company are maintained and investment is procured. The Company’s directors remain in control of the business during the examination process which is supervised by an expert Accountant under the advice of suitably qualified Solicitors. When successful, at conclusion the company’s balance sheet will be in considerably better shape allowing it to retain employment and ideally thrive into the future.
The whole process from start to finish is a nuanced one, requiring expert guidance throughout. Not all companies are suitable candidates for Examinership and often an incorrect diagnosis can be detrimental. It is imperative that you obtain accurate, concise, experienced legal and accountancy advice.
Our team at Brady Kilroy have acted in 50+ Examinership cases at High Court and Circuit Court level, on behalf of companies, Examiners, creditors, investors and individuals. We are exceptionally experienced in the process and have strategic relationships with leading Insolvency Practitioners. A small sample of some recent cases we advised upon across a wide spectrum of industries, 100% of which were successful, include:
- Donal MacNally Opticians Limited [2019/01213] – https://www.irishtimes.com/business/retail-and-services/examiner-appointed-to-dublin-s-largest-opticians-chain-granted-30-day-extension-1.3875280
- Stresslite Tanks Limited [2019/160];
- Cool Cat Plant Services Limited ;
- Karaoke Box Limited t/a Ukiyo Bar [2019/05062];
- I Supply Limited [2019/98]
- Denis Moriarty Civil Engineering Contractors ; – https://www.independent.ie/regionals/kerryman/news/130-jobs-saved-as-moriarty-secures-investment-36887250.html
- B&D Food Emporium Gorey Limited 2018/508CA;
- Conway Piling Limited 2018/370COS;
This is the most stressful time imaginable for businesses but there is help. The time to act is now. For further information, please do not hesitate to contact us for advice. firstname.lastname@example.org