Ireland Insolvency Chapter

Author:Mr Gavin Smith and William Greensmyth
Profession:Walkers
 
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  1. Market Trends and Developments

    1.1 The State of the Restructuring Market

    Generally there has been a decrease in the number of corporate insolvencies in Ireland over the last five years, which is in contrast to the period from 2008 to 2013, when there were a significant number of corporate insolvencies arising out of the global recession.

    Figures prepared by Deloitte Ireland published for H1 2018 show a decrease of 4% in corporate insolvencies compared with H1 2017. Formal restructurings (examinerships) remain level for the same period compared with H1 2017.

    The sectors most seriously affected remain the construction, services and retail industries.

    It is expected that there will be significant disruption to industries arising out of the uncertainties created by Brexit, given the interrelated nature of Ireland and the UK. The manufacturing, retail and tourism industries are the most at risk in that regard.

    1.2 Changes to the Restructuring and Insolvency Market

    There has been a lot of activity in recent years in terms of non-performing loan sales from the major financial institutions (as they recalibrate their respective balance sheets) to mostly private equity players. The upshot of that activity is that this firm is still seeing more than its fair share of distressed debt and insolvency litigation cases, which might surprise onlookers in terms of where Ireland stands generally speaking in the economic cycle. If the commercial list of the High Court is seen as a fairly decent barometer for trends in commercial litigation in Ireland, the firm still sees approximately 50-60% of applications for entry to that list, involving non-performing loan (NPL) related litigation. A lot of cases that would have been taken or progressed earlier were deferred or stayed while the loans and security were sold so there are still cases emerging or progressing as the new NPL holders deal with their loan portfolios.

  2. Statutory Regimes Governing Restructurings, Reorganisations, Insolvencies and Liquidations

    2.1 Overview of the Laws and Statutory Regimes

    The governing piece of legislation in Ireland applicable to corporate restructurings and insolvencies is the Companies Act 2014 (the "Companies Act"), which came into effect on 1 June 2015. It represents a significant reform of Irish corporate law, codifying and modernising approximately 50 years of case law and diverse legislation.

    2.2 Types of Voluntary and Involuntary Financial Restructuring, Reorganisation...

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