This procedure is intended to facilitate the rescue of insolvent and nearly insolvent companies by the High Court appointment of an Examiner. This entitles the company to a period of 70-100 days “protection of the court” from its creditors.
The function of the Examiner is to formulate proposals for the compromise or scheme of arrangement between the company, its shareholders and creditors. The scheme of arrangement usually involves a combination of new investment, a write down of creditors’ claims, and payment of dividends to creditors over a period of time.
The company continues to trade during this period and the directors remain in control, and responsible for the day to day activities of the company.
If the scheme of arrangement is approved by the High Court, it becomes binding on the company, its shareholders and creditors. If the scheme of arrangement is not approved by the High Court or not successfully implemented, the protection of the court is withdrawn and liquidation and/or receivership invariably follow.
O’Brien & Co. can advise and assist directors of a company seeking "protection of the court".
Paul O'Brien can also act as Examiner in this type of corporate procedure.