Friel Stafford > Examinerships

The 1990 Companies Act

introduced the process of Examinership. Under the legislation, once an Examiner is appointed to a Company, the Company is under the protection of the High Court/Circuit Court whilst the Examiner (i.e. the individual who “examines” the Company) formulates a Scheme of Arrangement with the Company’s creditors.

Is your Company suitable for Examinership?

The detailed procedures for placing a company into Examinership and the subsequent steps are outlined below. In summary, in order for a company to be suitable for Examinership, the High Court (or the Circuit Court as the case may be) has to be satisfied that the company, and the whole or any part of its undertaking, would have a reasonable prospect of survival. In essence, there must be a business that is either viable, or can be made viable.
The process itself begins with a petition presented to the High Court/Circuit Court.

The Companies (Miscellaneous Provisions) Act, 2013 (the “Act”) was signed into law on 24 December 2013 and has introduced what has become colloquially referred to as “examinership-lite”, or what it is hoped will be a new SME-friendly examinership regime.

Prior to the Act being signed into law, there was no option for a company to apply directly to the Circuit Court for the appointment of an examiner under the examinership regime as set out in the Companies (Amendment) Act 1990. Instead, the High Court could choose to remit the matter to the Circuit Court, where it is satisfied that the total liabilities of the company do not exceed £250,000 (€317,500).

The Act prescribes the statutory criteria to be satisfied in order for the Circuit Court to have jurisdiction. The Circuit Court has jurisdiction where the company is a “small company”, which is defined as one which satisfies the qualifying conditions for a given year and the preceding financial year. The qualifying conditions are satisfied where two or more of the following criteria are met for a particular year:

  • The turnover for that year does not exceed €8.8 million;
  • The balance sheet total for that year does not exceed €4.4 million;
  • The average number of employees in the company for that year does not exceed 50.

Importantly, the Act enables a “small company” to elect to apply directly to the Circuit Court (rather than the High Court) for the appointment of an examiner. In such a situation the powers and jurisdiction of the High Court in relation to examinership may be exercised by the Circuit Court.

The High Court, however, still retains jurisdiction to deal with the examinership of a “small company”.
Who May Present A Petition

A Petition for the appointment of an Examiner may be presented by:

  • The company; or
  • The directors of the company; or
  • A creditor, including a contingent or prospective creditor (including an employee), of the company; or
  • Shareholders holding not less than one-tenth of shares carrying the power to vote at general meetings at the time of presentation of the Petition.

The Petition

As soon as a Petition for the appointment of an Examiner is presented in the Central Office of the High Court/Circuit Court the Company is under Court protection.

The Petition nominates a person to be appointed Examiner. The Petition should be accompanied by the report of an independent expert. In the absence of an independent expert’s report, an application to court for protection is necessary.

The Act provides that the independent expert is somebody who is either the auditor of the company or a person who is qualified to be appointed as an Examiner of the company.

The report of the independent expert must contain the following:


The report of the independent expert shall comprise the following:
(a) the names and addresses of the officers of the company;
(b) the names of any other bodies corporate of which the directors of the company are also directors;
(c) a statement as to the affairs of the company, showing in so far as it is reasonably possible to do so, particulars of the company’s assets and liabilities (including contingent and prospective liabilities) as at the latest practicable date, the names and addresses of its creditors, the securities held by each of them and the dates when the securities were given to each of them;
(d) his or her opinion as to whether any deficiency between the assets and liabilities of the company has been satisfactorily accounted for or, if not, as to whether there is evidence of a substantial disappearance of property that is not adequately accounted for;
(e) his or her opinion as to whether the company, and the whole or any part of its undertaking, would have a reasonable prospect of survival as a going concern and a statement of the conditions which he or she considers are essential to ensure such survival, whether as regards the internal management and controls of the company or otherwise;
(f) his or her opinion as to whether the formulation, acceptance and confirmation of proposals for a compromise or scheme of arrangement would offer a reasonable prospect of the survival of the company, and the whole or any part of its undertaking, as a going concern;
(g) his or her opinion as to whether an attempt to continue the whole or any part of the undertaking would be likely to be more advantageous to the members as a whole and the creditors as a whole than a winding-up of the company;
(h) recommendations as to the course he or she thinks should be taken in relation to the company including, if warranted, draft proposals for a compromise or scheme of arrangement;
(i) his or her opinion as to whether the facts disclosed would warrant further inquiries with a view to proceedings under sections 610 and 611 or section 722 ;
(j) details of the extent of the funding required to enable the company to continue trading during the period of protection and the sources of that funding;
(k) his or her recommendations as to which liabilities incurred before the presentation of the petition should be paid;
(l) his or her opinion as to whether the work of the examiner would be assisted by a direction of the court in relation to the role or membership of any creditor’s committee referred to in section 538 ; and
(m) such other matters as he or she thinks relevant.


The report of the independent expert is fundamental to the presentation of the Petition. Although not specifically specified in the Act, the independent expert’s report should be signed off in the name of the reporting accountant, and not in the name of the accountant’s firm. If the company’s existing auditor is owed fees by the company, it could be argued that the auditor is not independent. In such circumstances it would be wise for the company to appoint an independent accountant.

The Consultative Committee of the Accountancy Bodies of Ireland issued a Statement of Insolvency Practice in December 2008 called “Appointment as Examiner under the Companies (Amendment) Act, 1990. The Statement provides guidance on the preparation of independent accountants reports (prior to the implementation of the Companies Act 2014, the Independent Expert’s report was known as the Independent Accountant’s report), and states that the accountant should be conscious of practical matters which may preclude him from accepting the assignment or being able to form the view that the company would have a reasonable prospect of survival. The statement gives the following examples of circumstances that could constrain the accountant:

  1. Time constraints where a petition is made within 3 days of a Receiver’s appointment.
  2. Lack of information and/or satisfactory evidence to support the directors’ “belief” that appointment of an Examiner would save some or all of the company’s business.
  3. The cumulative impact of significant caveats and/or uncertainties referred to within the report where that report expresses the opinion the appointment of an examiner would be more advantageous than liquidation.

In certain circumstances it may be advisable for a company to instruct an independent expert to prepare an independent expert’s report if it is apprehensive that its bank might appoint a Receiver. If the bank does subsequently appoint a receiver, then the independent expert should be able to rapidly update it.

The Petition itself must state the following:

  1. Name and address of the petitioner;
  2. Capacity of the petitioner;
  3. Date of incorporation of the company in question;
  4. Registered office of the company in question;
  5. Nominal and paid-up share capital of the company in question;
  6. Objects of the company in question;

The Petition must also show that:

  1. The company is or is likely to be unable to pay its debts;
  2. No resolution subsists for the winding up of the company;
  3. No order has been made for the winding up of the company.

The Petition must be verified by affidavit.

What happens if an Examinership is not successful?

If the Examinership is not successful, then the Company will be placed into liquidation. In such an event, it is possible that the company’s bankers may appoint a Receiver.

How can Friel Stafford help?

We can provide the following services:

  1. Advise on the suitability of Examinership.
  2. Act as the reporting Independent Expert.
  3. Act as the Examiner.

For further information please contact Jim Stafford or Tom Murray on 01 661 4066 or jim.stafford@frielstafford.ie or tom.murray@frielstafford.ie

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