Receivership Process
Companies Act
Preferential payments when receiver is appointed under floating charge
440. (1) Where either—
(a) a receiver of the property of a company is appointed on behalf of the holders of any debentures of the company secured by a floating charge, or
(b) possession is taken by or on behalf of those debenture holders of any property comprised in or subject to the charge,
then, if the company is not at the time in the course of being wound up, the debts which in every winding up are, under the provisions of Part 11 relating to preferential payments, to be paid in priority to all other debts, shall be paid out of any assets coming to the hands of the receiver or other person taking possession as mentioned above in priority to any claim for principal or interest in respect of the debentures.
(2) In the application of the foregoing provisions, section 621 (2)(c) shall be read as if the provision for payment of accrued holiday remuneration becoming payable on the termination of employment before or by the effect of the winding-up order or resolution were a provision for payment of such remuneration becoming payable on the termination of employment before or by the effect of the appointment of the receiver or possession being taken as mentioned above.
(3) For the purposes of this section, the periods of time mentioned in the foregoing provisions of Part 11 shall be reckoned as beginning after the date of the appointment of the receiver or of possession being taken as mentioned above, as the case may be.
(4) Any payments made under this section shall be recouped so far as may be out of the assets of the company available for payment of general creditors.
Delivery to Registrar of accounts of receivers
441. (1) In this section “initial period of 6 months”, in relation to a receiver, means the period of 6 months falling after the date of his or her appointment.
(2) Except where section 430 (3) applies, a receiver of the property of a company shall send to the Registrar—
(a) within 30 days after the expiration of—
(i) the initial period of 6 months, and
(ii) each subsequent period of 6 months,
and
(b) within 30 days after the date on which he or she ceases to act as receiver of the property of the company,
an abstract in the prescribed form showing—
(i) the assets of the company of which he or she has taken possession since his or her appointment, their estimated value and the proceeds of sale of any such assets since his or her appointment,
(ii) his or her receipts and payments during that period of 6 months or, where he or she ceases to act as mentioned above, during the period from the end of the period to which the last preceding abstract related up to the date of his or her so ceasing, and
(iii) the aggregate amounts of his or her receipts and of his or her payments during all preceding periods since his or her appointment.
(3) A receiver who makes default in complying with subsection (2) shall be guilty of a category 4 offence.
Regulation of Receivers and Enforcement of their Duties
Enforcement of duty of receivers to make returns
442. (1) Subsection (2) applies if a receiver of the property of a company—
(a) having made default in filing, delivering or making any return, account or other document, or in giving any notice, which a receiver is by law required to file, deliver, make or give, fails to make good the default within 14 days after the date of service on him or her of a notice requiring him or her to do so, or
(b) having been appointed under the powers contained in any instrument, has, after being required at any time by the liquidator of the company to do so, failed to render proper accounts of his or her receipts and payments and to vouch those receipts and payments and to pay over to the liquidator the amount properly payable to him or her.
(2) Where this subsection applies, the court may, on an application made for the purpose, make an order directing the receiver to make good the default within such time as may be specified in the order.
(3) In the case of any such default as is mentioned in subsection (1)(a), any member or creditor of the company or the Registrar may make an application for the purposes of this section.
(4) In the case of any such default as is mentioned in subsection (1)(b), the liquidator of the company is alone entitled to make an application for the purposes of this section.
(5) In either of the foregoing cases, the order under this section may provide that all costs of and incidental to the application shall be borne by the receiver.
(6) Nothing in this section shall be taken to prejudice the operation of any enactments imposing penalties on receivers in respect of any such default as is mentioned in subsection (1).
Power of court to order the return of assets improperly transferred
443. (1) Where a receiver of the property of a company is appointed and, on the application of the receiver or any creditor or member of the company, it can be shown to the satisfaction of the court that—
(a) any property of the company of any kind whatsoever was disposed of either by way of conveyance, transfer, mortgage, security, loan, or in any way whatsoever whether by act or omission, direct or indirect, and
(b) the effect of such disposal was to perpetrate a fraud on the company, its creditors or members,
the court may, if it deems it just and equitable to do so, make the following order.
(2) That order of the court is one requiring any person who appears to have the use, control or possession of such property or the proceeds of the sale or development of it to deliver it or pay a sum in respect of it to the receiver on such terms or conditions as the court sees fit.
(3) Subsection (1) shall not apply to any conveyance, mortgage, delivery of goods, payment, execution or other act relating to property made or done by or against a company to which section 604 applies.
(4) In deciding whether it is just and equitable to make an order under this section, the court shall have regard to the rights of persons who have bona fide and for value acquired an interest in the property the subject of the application.
Power of court to fix remuneration of receiver
444. (1) Where a person has, under the powers contained in any instrument, been appointed as receiver of the property of a company the court may, on an application made by the liquidator of a company or by any creditor or member of the company, make the following order.
(2) That order of the court is one fixing the amount to be paid by way of remuneration to that receiver and such an order may be made notwithstanding that his or her remuneration has been fixed by or under that instrument.
(3) Subject to subsection (4), the power of the court under subsection (1) shall, where no previous order has been made in relation to the matter concerned under that subsection—
(a) extend to fixing the remuneration for any period before the making of the order or the application for it,
(b) be exercisable notwithstanding that the receiver has died or ceased to act before the making of the order or the application for it, and
(c) if the receiver has been paid or has retained for his or her remuneration for any period before the making of the order any amount in excess of that fixed by the court for that period, extend to requiring him or her or his or her personal representatives to account for the excess or such part of it as may be specified in the order.
(4) The power conferred by subsection (3)(c) shall not be exercised in relation to any period before the making of the application for the order unless, in the opinion of the court, there are special circumstances making it proper for the power to be so exercised.
(5) The court may from time to time, on an application made by the liquidator or by any creditor or member of the company or by the receiver, vary or amend an order made under subsection (1).
(6) Nothing in this section shall affect a receiver’s right to indemnity out of the assets of the company provided by section 438 .
Court may end or limit receivership on application of liquidator
445. (1) On the application of the liquidator of a company that is being wound up (other than by means of a members’ voluntary winding up) and in respect of the property of which a receiver has been appointed (whether before or after the commencement of the winding up), the court may make the following order.
(2) That order of the court is one—
(a) that the receiver shall cease to act as such from a date specified by the court, and prohibiting the appointment of any other receiver, or
(b) that the receiver shall, from a date specified by the court, act as such only in respect of certain assets specified by the court.
(3) An order under subsection (1) may be made on such terms and conditions as the court thinks fit.
(4) The court may from time to time, on an application made either by the liquidator or by the receiver, discharge or amend an order made under subsection (1).
(5) A copy of an application made under this section shall be served on the receiver and on the person who appointed him or her not less than 7 days before the date of the hearing of the application, and the receiver and any such person may appear before and be heard by the court in respect of the application.
(6) Except as provided in subsection (2), no order made under this section shall affect any security or charge over the undertaking or property of the company.
Director of Corporate Enforcement may request production of receiver’s books
446. (1) The Director of Corporate Enforcement may, where he or she considers it necessary or appropriate, make the following request of the receiver of the property of a company or companies (specifying the reason why the request is being made).
(2) That request is that the receiver produce to the Director the receiver’s books for examination, either in regard to a particular receivership or to all receiverships undertaken by the receiver.
(3) The receiver of whom a request under subsection (1) is made shall—
(a) furnish the books to the Director of Corporate Enforcement,
(b) answer any questions concerning the content of the books and the conduct of the particular receivership or receiverships, and
(c) give to the Director of Corporate Enforcement all assistance in the matter as the receiver is reasonably able to give.
(4) A request under subsection (1) may not be made in respect of books relating to a receivership that has concluded more than 6 years prior to the date of the request.
(5) If a receiver fails to comply with a request under subsection (1) or do any of the things referred to in subsection (3)(b) and (c), he or she shall be guilty of a category 3 offence.
Prosecution of offences committed by officers and members of company
447. (1) If it appears to the receiver of the property of a company, in the course of the receivership, that any past or present officer, or any member, of the company has been guilty of any offence in relation to the company, the receiver shall forthwith report the matter to the Director of Public Prosecutions.
(2) Where the receiver reports a matter under subsection (1) to the Director of Public Prosecutions, the receiver shall—
(a) provide to the Director of Public Prosecutions such information, relating to the matter in question, as he or she may require, and
(b) give to him or her such access to, and facilities for, inspecting and taking copies of such documents, being documents in the possession or under the control of the receiver and relating to the matter in question, as he or she may require.
(3) Where a foregoing report is made by the receiver, the receiver shall also report the matter to the Director of Corporate Enforcement.
(4) Where a matter is reported by the receiver under subsection (3) to the Director of Corporate Enforcement, the receiver shall—
(a) provide to the Director of Corporate Enforcement such information, relating to the matter in question, as he or she may require, and
(b) give to him or her such access to, and facilities for, inspecting and taking copies of such documents, being documents in the possession or under the control of the receiver and relating to the matter in question, as he or she may require.
(5) If, where any matter is reported under subsection (1) or (3) to—
(a) the Director of Public Prosecutions, or
(b) the Director of Corporate Enforcement,
the Director of Public Prosecutions or, as the case may be, the Director of Corporate Enforcement considers that the case is one in which a prosecution ought to be instituted and institutes proceedings accordingly, it shall be the duty of each of the following to give all assistance in connection with the prosecution which he or she is reasonably able to give.
(6) The persons referred to in subsection (5) are the receiver of the company and—
(a) every officer (past or present) of the company, and
(b) every agent (past or present) of the company,
other than the defendant in the proceedings.
(7) For the purposes of subsection (6), “agent”, in relation to a company, includes—
(a) the bankers and solicitors of the company, and
(b) any persons employed by the company as auditors, accountants, book-keepers or taxation advisers, or other persons employed by it in a professional, consultancy or similar capacity, whether those persons are (or were) or are not (or were not) officers of the company.
(8) If any person fails or neglects to give assistance in the manner required by subsection (5), the court may, on the application of the Director of Public Prosecutions or, as the case may be, the Director of Corporate Enforcement, direct that person to comply with the requirements of that subsection.
(9) Where any such application is made in relation to a receiver, the court may, unless it appears that the failure or neglect to comply was due to the receiver not having in his or her hands sufficient assets of the company to enable him or her so to do, direct that the costs of the application shall be borne by the receiver personally.
Reporting to Director of Corporate Enforcement of misconduct by receivers
448. (1) Where a disciplinary committee or tribunal (however called) of a prescribed professional body—
(a) finds that a member of that body who is conducting or has conducted a receivership has not maintained appropriate records in relation to that activity, or
(b) has reasonable grounds for believing that such a member has committed a category 1 or 2 offence during the course of conducting a receivership,
the professional body shall report the matter, giving details of the finding or, as the case may be, of the alleged offence, to the Director of Corporate Enforcement forthwith.
(2) If a professional body fails to comply with this section, it, and any officer of the body to whom the failure is attributable, shall be guilty of a category 3 offence.
The text in italics on this page is sourced from the Irish Statute Book and is re-published under the Licence for Re-Use of Public Sector Information made pursuant to Directive 2003/98/EC Directive 2013/37/EU of the European Parliament and of the Council on the re-use of public sector information transposed into Irish law by the European Communities (Re-Use of Public Sector Information) Regulations 2005 to 2015.