Rescue Administration
Production of Documents and Evidence
There are provisions in relation to the production of such documents and evidence. The process adviser is empowered to request documents which they consider relevant. For example, records concerning bank accounts into or out of which transactions may have taken place which pertain to the affairs of the company. The process adviser has power to examine under oath any agent of the company or other relevant person.
No person shall be entitled to withhold possession over any deed, instrument or document belonging to the company, including documents such as invoices, accounting records and so on, and no person or party may claim a lien over any such items. Where a mortgage, charge or pledge has been created by the deposit of any such document or paper with a person, the production of the document or paper to the process adviser by the person shall not operate to prejudice the person’s rights under the mortgage, charge or pledge (other than any right to possession of the document or paper).
The court may authorise the process adviser to dispose of property and in the manner provided by the equivalent provisions of Principal Act. It enables the process adviser to dispose of assets which are subject to fixed or floating charges or hire-purchase agreements where such a disposal is likely to facilitate the survival of the whole or any part of the company as a going concern.
Court Applications
The process adviser or the Director of Corporate Enforcement may apply to the relevant court to make a determination concerning any question arising during the rescue process. All or part of any hearing in relation to the rescue process may be held other than in public if the court determines that, in the interests of justice, it would be in the interests of the company concerned or the creditors as a whole.
The High Court has power to remit proceedings to the Circuit Court where it considers that the Circuit Court is a more appropriate venue. The provision of the Principal Act concerning the representation of bodies corporate at company meetings applies during the rescue process.
The Act suspends certain time limits while any matter is being considered by the courts.
Rights and Participation
The process adviser must retain all records pertaining to the rescue process for a period of not less than 6 years. There are technical and procedural requirements for serving notices under the Act.
The company to ensure creditors in a creditors’ voluntary liquidation are made aware of their right to form and participate on a committee of inspection which represents the interests of all creditors of a company going into liquidation. If default is made by the company in complying the company and any officer of it who is in default shall be guilty of a category 3 offence.
The small company administrative rescue process is within scope of reckless trading. It means that the process adviser is empowered to make an application to court in this regard.
Aa liquidator has the power to bring or defend any proceedings before the Workplace Relations Commission and the Labour Court in the name and on behalf of the company.
Committee of Inspection
There is an obligation on liquidators to ensure creditors in a court ordered liquidation are made aware of their right to form and participate on a committee of inspection. Where a committee of inspection is appointed it shall include not less than one employee creditor member (“employees’ representative”) to represent employee creditors, should they so elect.
Where a liquidator, without reasonable excuse, fails to inform creditors of their entitlement to form and participate on such a committee that they will be guilty of a category 4 offence.
Where a committee of inspection is appointed it shall include not less than one employee creditor member (“employee’s representative”) to represent employee creditors, should they so elect.
Where
- a committee of inspection is appointed,
- has an employees’ representative member, and
- where the employees’ representative member vacates the role,
they may be replaced by another employees’ representative should the employees so elect.
The Principal Act applies to a committee of inspection appointed in a court winding up and a creditors’ voluntary liquidation.
Creditors’ meetings could be held virtually during an interim period for the duration of the Covid-19 pandemic. This amendment ensures meetings held under the small company administrative rescue process can be held virtually during the interim period.
Enforcement
The Director of Corporate Enforcement has the power to seek and examine the books and records of a company engaged in a rescue process as well as the books and records pertaining to the rescue process itself. Failure to provide such records constitutes an offence.
Where a disciplinary tribunal of a professional body finds that a member of the body who acted as a process adviser failed to maintain appropriate records or, there are reasonable grounds for believing that the member committed a category 1 or 2 offence, that professional body is obliged to report such matters to the Director of Corporate Enforcement. This provisions are similar to other provisions of the Companies Act in respect of receivers, examiners, and liquidators.
It is an offence to act as a process adviser when the person concerned is not qualified. Where a director of an eligible company fails to disclose relevant information which is material to the exercise by the process adviser of his or her functions or fails to exercise utmost good faith in his or her dealings with the process adviser the director shall be guilty of a category 2 offence.
There is provision for the prosecution of criminal offences committed by officers and members of the company. If it appears to the process adviser that any past or present officer or member of the company has been guilty of an offence in relation to the company, the process adviser is obliged to report the matter to the Director of Public Prosecutions (DPP) and to the Director of Corporate Enforcement.
Following on from this, the process adviser must give the DPP and the Director of Corporate Enforcement access to any information or facilities as may be required and if the DPP or the Director of Corporate Enforcement seeks to prosecute the case, the process adviser and all officers and agents of the company (past or present) must give all assistance in connection with the prosecution as they are reasonably able to give.