Re Jetmara Teoranta

• Jurisdiction: Ireland
• Judge: MR JUSTICE DECLANCOSTELLO
• Judgment Date: 01 January 1992
• Neutral Citation: 1991 WJSC-HC 2076
• Date: 01 January 1992
• Court: High Court

1991 WJSC-HC 2076

THE HIGH COURT

No.1427P/1991

JETMARA TEORANTA

IN THE MATTER OF JETMARA TEORANTA (UNDER THE PROTECTION OFTHE COURT)

AND

IN THE MATTER OF THE COMPANIES (AMENDMENT) ACT 1990

Citations:

COMPANIES (AMDT) ACT 1990 S24

COMPANIES (AMDT) ACT 1990 S24(2)

COMPANIES (AMDT) ACT 1990 S22(5)

COMPANIES (AMDT) ACT 1990 S29(b)

COMPANIES (AMDT) ACT 1990 S29

Synopsis:

COMPANY

Insolvency

Court - Protection - Examiner - Proposals - Confirmation - Hearing of application - ~Locus standi~ of secured creditor - Whether creditor's interests impaired - Companies (Amendment) Act, 1990, ss. 18, 24, 29 - (1991/1427 P - Costello P - 10/5/91)

|In re Jetmara Teo.|

PRACTICE

Parties

~Locus standi~ - Company - Insolvency - Protection - Examiner - Proposals - Application for Court's confirmation - ~Locus standi~ of secured creditor - Whether creditor's interests impaired - (1991/1427 P - Costello J. - 10/5/91) - [1992] 1 I.R. 147

|In re Jetmara Teo.|

WORDS AND PHRASES

"Impaired"

Company - Insolvency - Protection - Examiner - Proposals - Court - Confirmation - ~Locus standi~ of secured creditor - Whether creditor's interests impaired - (1991/1427 P - Costello J. - 10/5/91) - [1992] 1 I.R. 147

|In re Jetmara Teo.|

TRANSCRIPT OF JUDGMENT

1 DELIVERED BY THE HONOURABLE MR JUSTICE DECLANCOSTELLOON 10TH MAY 1991

APPEARANCES

For the Examiner:

Dan O'Keeffe, SC

Instructed by

Arthur Cox & Co.

For the Bank of Nova Scotia:

Bill Shipsey, BL

Instructed by

Gerard Scallan & O'Brien

2 This is an application under the Companies (Amendment) Act 1990, section 24, for the consideration by the Court of the Examiner's report relating to the affairs of Jetmara Teoranta.

3 The first issue to be considered is the standing of the Bank of Nova Scotia, the only secured creditor of the Company, to appear and be heard on this application. According to section 24(2) of the Act, only creditors whose claim or interest would be impaired if the proposals were implemented can be heard.

4 It is urged on behalf of the Examiner that the Bank of Nova Scotia has no standing because by virtue of section 22(5) of the Act a creditor's claim is impaired if he receives less in payment of his claim than the full amount due in respect of the claim at the date of presentation of the petition for the appointment of the examiner. That is not the case in relation to the claim by the Bank, it is said.

5 It is said that the Bank's claim against the Company would not be impaired within this definition because it would be paid in full the amount due to it at the date of the petition. This is true, but the Bank was to be paid the sum due to it by instalments and it would be deprived of access to immediate repayment and would receive less in interest than the interest to which it is contractually entitled.

6 It seems to me, therefore, that the Bank has a contractual interest which will be impaired and that this gives it a standing under section 24(2) to be heard on this application.

7 The Bank has advanced powerful arguments as to why the examiner's proposals should be refused. Predominant amongst them is a submission based upon the undoubted fact that one of the directors of the Company has been guilty of serious fraud prior to and after the commencement of the protection. The existence of this fraud is not denied by the examiner. The Bank submits that reliance cannot be placed on a number of the projections on which the examiner's proposals are based and that the Company is not commercially viable.

8 With considerable hesitation I have finally come to the conclusion that the Company is probably capable of surviving as a going concern if the proposals made by the examiner and as modified in the manner hereinafter appearing are implemented; and I think they should be given achance.

9 In reaching this conclusion I have been influenced by the fact that these proposals, subject to certain modifications, have been accepted by all the creditors and by Udaras na Gaeltachta.

10 (1) I adopt and confirm the proposals as set out in Appendix 1to the report of 17th April 1991 but as modified in paragraph 4 of thatreport.

11 (2) The scheme of arrangement should be subject to the express provision that it is...