O'Flynn v Carbon Finance Ltd: Comtemporary Developments for Examinership Law in Ireland

AuthorCillian Bracken
PositionBCL (German) 2014, University College Cork and Judicial Assistant, Courts Service. The author would like to thank Professor Irene Lynch-Fannon for her invaluable advice and feedback whilst writing this article
Pages61-77
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O’FLYNN v CARBON FINANCE LTD: CONTEMPORARY DEVELOPMENTS FOR
EXAMINERSHIP LAW IN IRELAND
Cillian Bracken*
A INTRODUCTION
Although examinership is by its genesis an American, British and antipodean creature, it has
evolved in Irish jurisprudence to be an Irish solution to an Irish problem. Despite bearing
many similarities to administration in the United Kingdom,
1
quite a nuanced and distinct
system of corporate rescue has been born of the modern legislation and its interpretation; an
archetypal example of this being the decision in O’Flynn & Anor v Carbon Finance Limited
& Ors.
2
Examinership remains a critically relied upon mechanism in the Irish sphere of
corporate law, depended upon by employers, creditors and employees alike; its import is of
such that its development in an Ireland still reeling from political, financial and legal
remedial recessionary action could have far reaching implications for a variety of commercial
enterprises, significantly expanded since the introduction of the Companies (Miscellaneous
Provisions) Act 2013 and the related increase in access to justice and the courts.
3
Contemporaneously the evolution of the area is of great interest within the recessionary time
period in light of the National Assets Management Agency, established under the auspices of
the NAMA Act 2009, apropos of the implications for companies seeking the protections
afforded by the scheme and all the benefits that come with it and, as the case may be, those
seeking to avoid it in order to maintain a nexus of stability and independent governance.
The aim of this case note is threefold to succinctly delineate the facts and specifics of the
case and the basis upon which the action is grounded both factually relating to the law and
*BCL (German) 2014, University College Cork and Judicial Assistant, Courts Service. The author would like to
thank Professor Irene Lynch-Fannon for her invaluable advice and feedback whilst writing this article.
1
See Thomas B Courtney, The La w of Companies (3rdedn, Bloomsbury Professional 2012) ch 22 for
comparison.
2
O’Flynn & Anor v Carbon Finance Limited & Ors [2014] IEHC 458 (O’Flynn).
3
See below, ‘Legislative Background’.
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briefly the historic background of the legislation in the jurisdiction, to examine the decision
and reasoning of Irvine J, and finally to explore the consequences of the judgment for Irish
company law and for the area of examinership, as reflected in the growing body of modern
cases in Irish corporate law expanding upon its application.
B ANALYSIS
1 Legislative Background
Generally examinership is a central tenet of corporate insolvency; its purpose is to extend, to
a company with some reasonable prospect of survival, a ray of hope and the prospect that
through the court’s protection the company will survive and thrive. As noted by Courtney and
O’Donnell, the origins of examinership in the Companies (Amendment) Act 1990 arose in
rather unusual circumstances.
4
On 6 August 1990, four days after the Iraqi invasion of
Kuwait, the UN trade embargo on Iraq triggered potentially disastrous consequences for the
Irish economy due to the huge financial stakehold beef producer Goodman International, a
company which accounted for 42% of national beef exports and potentially up to 6% of
GNP,
5
had in exporting beef to Iraq. The passing of the 1990 Act, a fast-tracked portion of
the Companies Bill 1987, allowed for a company to be placed under court protection,
freezing its assets for up to 12 months. It is the foundation of modern Irish examinership, the
Act having clear origins in the Cork Committee and the Harmer Report, and thus bearing
many parallels with its British and Australian counterparts.
6
The McDowell Report was
published in 1998 on company law compliance and included recommendations regarding the
examinership legislation.
7
Following the Gallagher Report in 1994 more far-reaching changes
4
Courtney (n 1), and John L O’Donnell, Examinerships (Oak Tree Press 19 94).
5
Dáil Deb 9 March 1989, vol 388, no 2
9030900006?ope
ndocument> accessed 16 March 2015.
6
Report of the Review Committee on Insolvency Law and Practice (Cmnd 8558, 1982) ch 9 (The Cork
Committee); Australian Law Reform Commission, General Insolvency Inquiry (Report no 45, 1988); see Lynch
Fannon and Murphy, Corporate Insolvency and Rescue (2nd edn, Bloo msbury Professional 2012) 490.
7
Report of the Working Group on Company Law Compliance and Enforcement (1998).

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