Rescue Plan
Chapter 3
Appointment of process adviser
Resolution to appoint process adviser
558E. (1) This section applies where a process adviser submits a report under section 558D(2)(b) to the directors of an eligible company.
(2) The directors of the eligible company may call a meeting of its board of directors at which a resolution to appoint a process adviser in respect of the eligible company shall be proposed and considered.
(3) Any meeting called under subsection (2) shall be held before the expiry of the period of 7 days beginning on the date on which the directors of the eligible company receive the process adviser’s report.
Process adviser’s duty to keep determination under section 558C under review
558F. (1) This section applies where a process adviser is appointed in respect of an eligible company and is without prejudice to section 558S(2).
(2) The process adviser shall keep under review during the rescue period the determination made in relation to the eligible company under section 558C.
(3) If, at any time during the rescue period, the process adviser determines, having regard to the matters specified in subsection (4), that there is no longer a reasonable prospect of the survival of the eligible company, and the whole or any part of its undertaking, as a going concern, the process adviser shall immediately—
(a) give notice of the determination to the directors of the eligible company, and
(b) resign as process adviser in respect of the eligible company in accordance with section 558ZW.
(4) The matters referred to in subsection (3) are—
(a) any material change in the circumstances of the eligible company,
(b) the discovery of any material inaccuracy in the information provided to the process adviser that was relied upon for the determination under section 558C, or
(c) such other matter as the process adviser considers relevant.
Duties of directors of eligible company in relation to process adviser
558G.(1) This section applies where a process adviser is appointed in respect of an eligible company.
(2) Where the process adviser gives notice to the directors of the eligible company under section 558F, the directors shall, as soon as reasonably practicable after the notice is given, take such steps as they consider appropriate for the purpose of protecting the interests of employees of the company.
(3) During the rescue period, the directors of the eligible company shall—
(a) co-operate with the process adviser for any purpose relating to the performance by the process adviser of his or her functions under this Part, and
(b) without prejudice to any other requirement imposed on them by or under this Part, disclose to the process adviser any information relating to the performance of those functions that is available to them.
Process adviser’s duty to determine relevant court
558H. (1) This section applies where a process adviser is appointed in respect of an eligible company.
(2) The process adviser shall, having regard to the matters mentioned in subsection (3), determine whether any proceedings under this Part relating to the eligible company shall be brought in the Circuit Court or the High Court.
(3) The matters referred to in subsection (2) are—
(a) the need to minimise costs by refraining from bringing proceedings in the High Court unless there are good reasons for doing so,
(b) the need for an efficient and expeditious conclusion to any proceedings brought under this Part, and
(c) any other relevant matter.
(4) Before making a determination under subsection (2), the process adviser shall consult the directors of the eligible company.
(5) The jurisdiction of the Circuit Court under this Part in relation to an eligible company shall be exercisable by a judge of the Circuit Court—
(a) for the circuit in which the registered office of the eligible company is situated at the time of the appointment of the process adviser or in which it has, at that time, its principal place of business, or
(b) if, at that time, there is no registered office of the eligible company and its principal place of business is outside the State, for the Dublin Circuit.
Process adviser’s duty to seek provision of email addresses
558I. (1) This section applies where a process adviser is appointed in respect of an eligible company by virtue of the passing of a resolution referred to in section 558E(2).
(2) As soon as practicable after the appointment, the process adviser shall give to each person specified in subsection (3) a notice in writing—
(a) requesting that the person provide the process adviser with an email address that the process adviser may use for the purpose of giving the person any notices and other documents that the process adviser is required or authorised to give to the person under this Part, and
(b) informing each such person that, if no email address is provided, the process adviser shall give the person those notices and other documents by sending them by post in accordance with section 558ZAI.
(3) Notice under subsection (2) shall be given—
(a) where the process adviser is aware of the person’s email address, by electronic means to that email address, or
(b) in any other case, in accordance with section 558ZAI(4).
(4) The persons are—
(a) employees of the eligible company,
(b) members of the eligible company,
(c) creditors of the eligible company,
(d) the Revenue Commissioners, and
(e) such other persons as may be prescribed.
(5) The process adviser shall keep records and supporting evidence of the means by which notice is given under this section.
Process adviser to give notice of appointment
558J. (1) This section applies where a process adviser is appointed in respect of an eligible company by virtue of the passing of a resolution referred to in section 558E(2).
(2) The process adviser shall, as soon as practicable and in any event no later than 2 working days after the passing of the resolution—
(a) deliver to the Registrar a notice of his or her appointment in the prescribed form, and
(b) file with the office of the relevant court a copy of—
(i) the resolution,
(ii) the process adviser’s determination made under section 558C and his or her report prepared under section 558D, and
(iii) where a process adviser has determined under section 558H(2) that proceedings under this Part in relation to an eligible company should be brought in the High Court, the reasons for the determination,
and
(c) make arrangements for a notice of his or her appointment and the date of that appointment to be published in Iris Oifigiúil.
(3) The directors of the eligible company shall ensure that, within 48 hours after the passing of the resolution, a notice in the prescribed form stating that the process adviser has been appointed and the date of the appointment is placed on any website of the company in a prominent and easily accessible place.
(4) The directors of the eligible company shall ensure that the notice referred to in subsection (3) remains on the website during the rescue period.
(5) The process adviser shall keep records and supporting evidence of the means by which he or she has complied with the requirement imposed by subsection (2)(c).
(6) A person who fails to comply with a requirement imposed by this section shall be guilty of a category 3 offence.
Process adviser to give notice to employees, creditors, etc.
558K. (1) This section applies where a process adviser is appointed in respect of an eligible company by virtue of the passing of a resolution referred to in section 558E(2).
(2) The process adviser shall, as soon as practicable and in any event no later than 5 days after the passing of the resolution, give to the persons specified in subsection (3)—
(a) a notice in the prescribed form setting out—
(i) the fact of his or her appointment as process adviser and the date of the passing of the resolution in respect of same,
(ii) any payments that the process adviser considers are required to be made in order for the eligible company to continue trading,
(iii) the fact that any liabilities arising after the appointment of the process adviser that are properly incurred by the process adviser under this Part shall be paid in full, and
(iv) the determination made under section 558H(2) as to whether any proceedings shall be brought in the Circuit Court or the High Court, as the case may be,
(b) in a case where the person is a creditor of the eligible company, a notice requiring the person to provide the process adviser with information about the matters set out in subsection (4),
(c) in a case where the person is a party to a contract to which section 558P applies and the process adviser is considering repudiating the contract, a statement of that fact, and
(d) copies of—
(i) the determination made under section 558C and the report prepared under section 558D, and
(ii) such other documents as may be prescribed.
(3) The persons referred to in subsection (2) are—
(a) employees of the eligible company,
(b) creditors of the eligible company,
(c) the Revenue Commissioners, and
(d) such other persons as may be prescribed.
(4) The matters referred to in subsection (2)(b) are—
(a) the nature of the person’s claim,
(b) the nature of any evidence supporting the claim,
(c) any credit terms offered by the person to the eligible company,
(d) any security held by the person over any assets of the eligible company,
(e) any related party transactions with the eligible company,
(f) any other matter that the person considers to be relevant for the purposes of the preparation of a rescue plan in accordance with section 558Q, and
(g) such other matters as may be prescribed.
(5) The process adviser shall keep records and supporting evidence of the means by which notice is given under this section.
(6) A process adviser who fails to comply with any requirement imposed by this section shall be guilty of a category 3 offence.
(7) In this section, ‘related party transaction’ means a transaction between an eligible company and its related party.
Notice to creditor where eligible company has excludable debt
558L. (1) This section applies where—
(a) a process adviser is appointed in respect of an eligible company by virtue of the passing of a resolution referred to in section 558E(2), and
(b) the eligible company has an excludable debt.
(2) As soon as practicable after the passing of the resolution, the process adviser shall give a notice to the creditor concerned requiring the creditor to inform the process adviser, within 14 days after the giving of the notice, if the creditor objects to the inclusion of the excludable debt in the rescue plan on any of the grounds specified in subsection (3).
(3) The grounds are—
(a) the eligible company has failed at any time to comply with a requirement relating to tax imposed by or under—
(i) this Act, or
(ii) any other enactment,
(b) the Revenue Commissioners are conducting an audit or intervention into the eligible company,
(c) the eligible company is a party to an appeal in relation to a requirement relating to tax imposed by this Act or any other enactment, or
(d) such other ground as may be prescribed.
(4) In this section, ‘excludable debt’, in relation to an eligible company, means—
(a) any liability of the eligible company arising out of any tax, duty, levy or other charge of a similar nature owed or payable to the State,
(b) any debt or liability of the eligible company arising under the Redundancy Payments Acts 1967 to 2014,
(c) any debt or liability of the eligible company arising under the Protection of Employees (Employers’ Insolvency) Acts 1984 to 2020,
(d) any debt or liability of the eligible company arising under the Social Welfare Consolidation Act 2005 , or
(e) any debt or liability of the eligible company arising under such other enactment as may be prescribed.
Relevant court’s powers where receiver or provisional liquidator previously appointed
558M. (1) This section applies where a process adviser is appointed in respect of an eligible company by virtue of the passing of a resolution referred to in section 558E(2).
(2) Subsection (3) applies where, at the date of the passing of the resolution—
(a) a receiver stands appointed to the whole or any part of the property or undertaking of the eligible company, but
(b) the receiver has not stood so appointed for a continuous period of 3 working days or more.
(3) On an application by the eligible company or the process adviser for direction as to the effect of the appointment of the process adviser on the appointment of the receiver, the relevant court (or, if the receiver was appointed by the High Court, the High Court only) may make such order as it thinks fit, including an order as to any or all of the following matters:
(a) that the receiver shall cease to act as such from a date specified by the relevant court;
(b) that the receiver shall, from a date specified by the relevant court, act as such only in respect of certain assets specified by the relevant court;
(c) directing the receiver to deliver all books, papers and other records, which relate to the property or undertaking of the eligible company (or any part of it) and are in his or her possession or control, to the process adviser within a period to be specified by the relevant court;
(d) directing the receiver to give the process adviser full particulars of all his or her dealings with the property or undertaking of the eligible company.
(4) The relevant court shall not make an order under subsection (3)(a) or (b) unless the relevant court is satisfied that there is a reasonable prospect of the survival of the eligible company, and the whole or any part of its undertaking, as a going concern.
(5) Where the relevant court makes an order under subsection (3), it may, for the purpose of giving full effect to the order, include such conditions in the order and make such ancillary or other orders as it deems fit.
(6) Subsection (7) applies where, at the date of the passing of the resolution, a provisional liquidator stands appointed to the eligible company.
(7) On an application by the eligible company or the process adviser for direction as to the effect of the appointment of the process adviser on the appointment of the provisional liquidator, the High Court may make such order as it thinks fit, including an order as to any or all of the following matters—
(a) that the provisional liquidator shall cease to act as such from a date specified by the High Court,
(b) directing the provisional liquidator to deliver all books, papers and other records, which relate to the property or undertaking of the eligible company (or any part of it) and are in his or her possession or control, to the process adviser within a period to be specified by the High Court,
(c) directing the provisional liquidator to give the process adviser full particulars of all his or her dealings with the property or undertaking of the eligible company.
(8) The High Court shall not make an order under subsection (7), unless the High Court is satisfied that there is a reasonable prospect of the survival of the eligible company, and the whole or any part of its undertaking, as a going concern.
(9) Where the High Court makes an order under subsection (7), it may, for the purpose of giving full effect to the order, include such conditions in the order and make such ancillary or other orders as it deems fit.
(10) An application under this section shall be made on notice to the creditors of the eligible company.
(11) Where the receiver was appointed by the High Court, references in subsections (3) to (5) to the relevant court shall be construed as references to the High Court.
Relevant court’s power to stay proceedings or restrain further proceedings
558N. (1) This section applies where a process adviser is appointed in respect of an eligible company.
(2) Where the relevant court is satisfied that, having regard to the report prepared under section 558D and such other matters as it sees fit, there is a reasonable prospect of the survival of the eligible company, and the whole or any part of its undertaking, as a going concern, it may, on the application of any of the persons specified in subsection (3)—
(a) stay all proceedings or restrain any further proceedings against the eligible company for the relevant period on such terms as seem just, or
(b) order that the provisions set out in subsection (4), or such other provision as the relevant court may specify, shall have effect in relation to the eligible company for the relevant period.
(3) The persons referred to in subsection (2) are—
(a) the eligible company,
(b) the directors of the eligible company, and
(c) the process adviser.
(4) The provisions referred to in subsection (2)(b) are as follows, namely:
(a) no proceedings for the winding up of the eligible company may be commenced or resolution for winding up passed in relation to the company and any resolution so passed shall have no effect;
(b) no receiver over any part of the property or undertaking of the eligible company shall be appointed or, if a receiver has been so appointed before the appointment of the process adviser in respect of the company, the receiver shall, subject to any order under section 558M, cease to act;
(c) no attachment, sequestration, distress or execution shall be put into force against the property or effects of the eligible company, except with the consent of the process adviser;
(d) where any claim against the eligible company is secured by a mortgage, charge, lien or other encumbrance or a pledge of, on or affecting the whole or any part of the property, effects or income of the company, no action may be taken to realise the whole or any part of that security, except with the consent of the process adviser;
(e) no steps may be taken to repossess goods in the eligible company’s possession under any hire-purchase agreement (within the meaning of section 558ZV), except with the consent of the process adviser;
(f) where, by or under any enactment, rule of law or otherwise, any person other than the eligible company is liable to pay all or any part of the debts of the company—
(i) no attachment, sequestration, distress or execution shall be put into force against the property or effects of such person in respect of the debts of the eligible company, and
(ii) no proceedings of any sort may be commenced against such person in respect of the debts of the eligible company;
(g) no order for relief shall be made under section 212 against the eligible company in respect of complaints as to the conduct of the affairs of the company or the exercise of the powers of the directors—
(i) prior to the passing of the resolution appointing the process adviser in respect of the eligible company, or
(ii) on or after the passing of such resolution;
(h) no proceedings for the appointment of an examiner to the eligible company may be brought.
(5) An application under subsection (2) shall be made on notice to all interested parties and other persons directly affected.
(6) The relevant court shall not stay or restrain proceedings or make an order under subsection (2) without having afforded each creditor of the eligible company who has indicated to the court his or her desire to be heard in the matter an opportunity to be so heard.
(7) In this section, ‘relevant period’, in relation to an eligible company, means—
(a) the rescue period, or
(b) such other period as the relevant court sees fit.
Requirements following giving of notice to creditor under section 558K
558O. (1) This section applies where the process adviser appointed in respect of an eligible company gives a creditor of the company a notice under section 558K(2)(b).
(2) Where the creditor receives the notice, he or she shall—
(a) within 7 days of receipt of the notice, acknowledge receipt of such notice in writing, and
(b) within 14 days of receipt of the notice, provide the process adviser with the information required by the notice.
(3) Where a creditor fails to comply with subsection (2)(a), the process adviser shall give a notice (a ‘reminder notice’) to the creditor requiring the creditor, within 72 hours of receipt of the reminder notice, to acknowledge receipt of the notice given under section 558K(2)(b).
(4) Where a creditor fails to comply with a reminder notice, the creditor shall be deemed to have received the notice given under section 558K(2)(b).
(5) Where a creditor fails to comply with subsection (2)(b), the process adviser shall—
(a) estimate the value of the creditor’s claim (any such value being referred to in this subsection as ‘the estimated value’), and
(b) give a notice to the creditor—
(i) specifying the estimated value, and
(ii) informing the creditor that, unless the creditor supplies the process adviser with the information required by the notice under subsection (2)(b) within 72 hours after the giving of the notice under this subsection, the estimated value may be used by the process adviser for the purposes of preparing a rescue plan under section 558Q.
(6) In estimating the value of a claim under subsection (5)(a), the process adviser shall take into account any information relating to the claim contained in the books and documents of the eligible company that are available to him or her.
(7) The process adviser shall keep records and supporting evidence of the means by which a reminder notice was given.
(8) A person who fails to comply with subsection (3) or (7) shall be guilty of a category 3 offence.
Repudiation, affirmation and variation of certain contracts
558P. (1) This section applies where—
(a) a process adviser is appointed in respect of an eligible company, and
(b) the eligible company is a party to a contract (a ‘relevant contract’) under which some element of performance other than payment remains to be rendered both by the company and the other contracting party or parties (such party or parties being referred to in this section as the ‘relevant person’).
(2) The process adviser shall consider, having regard in particular to the matters specified in subsection (3), whether it is necessary for the survival of the eligible company, and the whole or any part of its undertaking, as a going concern, that the relevant contract be repudiated.
(3) The matters referred to in subsection (2) are as follows, namely:
(a) whether repudiation of the relevant contract would be likely to be more advantageous for the relevant person than a winding up of the eligible company or receivership;
(b) whether, if not repudiated, the relevant contract would be burdensome to, and surplus to the requirements of, the eligible company;
(c) whether the process adviser would be able to prepare a rescue plan if the contract were not repudiated.
(4) Where, having complied with subsection (2), the process adviser proposes to repudiate the relevant contract, the process adviser shall—
(a) subject to the approval of the relevant court, repudiate the relevant contract, or
(b) subject to subsection (11), where the process adviser considers that it would be appropriate to do so in all the circumstances, comply with subsections (7) to (10) instead of applying to the relevant court under subsection (5) in pursuance of paragraph (a).
(5) On the application of the process adviser in pursuance of subsection (4)(a), the relevant court—
(a) may, if satisfied that the condition in subsection (6) is met—
(i) approve the repudiation of the relevant contract with effect from the day on which the rescue plan takes effect under section 558ZB or 558ZE, as the case may be, and
(ii) determine the amount of any loss or damage suffered by the relevant person as a result of the repudiation,
or
(b) shall, if not so satisfied, dismiss the application.
(6) The condition referred to in subsection (5) is that it is necessary for the survival of the eligible company, and the whole or any part of its undertaking, as a going concern, that the relevant contract be repudiated.
(7) In any case where subsection (4)(b) applies, the process adviser shall give a notice to the relevant person—
(a) informing the relevant person that the process adviser proposes to repudiate the relevant contract,
(b) setting out the reasons why the process adviser considers that it is necessary for the survival of the eligible company, and the whole or any part of its undertaking, as a going concern that the relevant contract be repudiated,
(c) informing the relevant person that, in the event of repudiation of the relevant contract, the relevant person would stand as an unsecured creditor for the amount of loss or damage suffered by the relevant person as a result of the repudiation,
(d) specifying the terms on which the process adviser proposes to repudiate the contract (including the amount of any loss or damage suffered by the relevant person as a result of the repudiation, as determined by the process adviser),
(e) informing the relevant person that the relevant person has a right to participate in any meeting held under section 558T,
(f) informing the relevant person that, in the event that a rescue plan including provision for the repudiation of the relevant contract is approved at such a meeting, the relevant person would have a right under section 558ZC (subject to any application to the relevant court under subsection (5)) to object to—
(i) the repudiation, and
(ii) the amount determined in respect of any loss or damage,
(g) offering the relevant person an opportunity to propose to the process adviser—
(i) modifications of the terms on which the relevant contract would be repudiated, or
(ii) a variation of the terms of the relevant contract in order to avoid the repudiation of the relevant contract,
(h) in any case where the process adviser considers it appropriate to do so, offering the relevant person a variation of the terms of the relevant contract in order to avoid repudiation of the relevant contract,
(i) informing the relevant person that—
(i) the repudiation of the relevant contract, or
(ii) any variation of the terms of the relevant contract agreed by the process adviser and the relevant person in pursuance of paragraph (h),
would take effect on the coming into effect of the rescue plan in accordance with this Part, and
(j) requesting that the relevant person respond to the notice within a reasonable period (being, except where a shorter period is agreed, at least 10 days after the date on which notice is given) after the giving of the notice.
(8) Where—
(a) the relevant person proposes any modifications under subsection (7)(g), the process adviser shall consider the modifications and may—
(i) include in the rescue plan provision repudiating the relevant contract on the terms agreed between the process adviser and the relevant person, or
(ii) reject the modifications proposed by the relevant person and give the relevant person a notice under subsection (9),
(b) the process adviser and the relevant person agree on a variation of the terms of the relevant contract, include in the rescue plan provision affirming the relevant contract subject to that variation, or
(c) the relevant person—
(i) objects to the proposed repudiation of the contract and does not offer any modifications, or
(ii) fails to respond to the notice given under subsection (7) within the period specified in it,
the process adviser shall give the relevant person a notice under subsection (9).
(9) Where the process adviser considers that the relevant contract should be repudiated, the process adviser shall give a notice to the relevant person—
(a) informing the relevant person that the process adviser shall include in the rescue plan provision repudiating the relevant contract,
(b) informing the relevant person that the repudiation will take effect on the date (if any) on which the rescue plan takes effect in accordance with the provisions of this Part,
(c) specifying the amount determined by the process adviser in respect of loss or damage arising from such repudiation,
(d) informing the relevant person that the relevant person has a right to participate in any meeting held under section 558T, and
(e) informing the relevant person that, in the event that a rescue plan including provision for the repudiation of the relevant contract is approved at such a meeting, the relevant person has a right under section 558ZC to object to—
(i) the repudiation of the relevant contract, and
(ii) the amount determined in respect of loss or damage.
(10) Where the relevant contract is a lease, the process adviser shall assess loss or damage for the purposes of any calculation under subsection (7)(d) or (9)(c) by reference to the following—
(a) income shortfall,
(b) letting void,
(c) letting rent-free,
(d) reletting costs,
(e) marketing costs, and
(f) any other losses or costs that may arise.
(11) In any case where the process adviser is complying with the requirement imposed by subsection (4)(b), the process adviser may at any time cease complying with that subsection (and subsections (7) to (10)) and comply instead with the requirement imposed by subsection (4)(a).
(12) Where by virtue of subsection (4) the relevant contract is repudiated, the relevant person shall stand as an unsecured creditor for the amount of loss or damage suffered as a result of the repudiation.
(13) Any amount payable by the eligible company to the relevant person in respect of any loss or damage suffered by the relevant person as a result of the repudiation of a relevant contract which is—
(a) determined by the relevant court under subsection (5)(a)(ii), or
(b) included in the rescue plan by virtue of this section,
shall be due by the eligible company to the relevant person as a judgment debt.
(14) The relevant person has a right to participate in any meeting held under section 558T notwithstanding any approval given by the relevant court under subsection (5)(a).
(15) Where the process adviser wishes to affirm the relevant contract (other than under subsection (8)(b))—
(a) he or she shall apply to the relevant court, and
(b) the relevant court may approve the affirmation by the process adviser of the relevant contract.
(16) Where the relevant court approves the repudiation or affirmation of a relevant contract under subsection (5) or (15) or by virtue of section 558ZD(11), it may, in giving such approval, make such orders as it thinks fit for the purposes of giving full effect to its approval, including orders as to notice to, or declaring the rights of, any party affected by such affirmation or repudiation.
(17) For the avoidance of doubt, a process adviser shall have authority on behalf of the eligible company to repudiate or affirm (with or without variation) a relevant contract in pursuance of the provisions of this section.
Chapter 4
Rescue plan
Process adviser’s duty to prepare rescue plan
558Q. (1) This section applies where a process adviser is appointed in respect of an eligible company by virtue of the passing of a resolution referred to in section 558E(2).
(2) As soon as practicable after the passing of the resolution, the process adviser shall prepare a rescue plan for the eligible company.
(3) In preparing the rescue plan, the process adviser shall take account of—
(a) any information provided by creditors by virtue of section 558K(2)(b) or 558O(2)(b), and
(b) where no such information is provided, any values of claims that the process adviser has estimated under section 558O(5).
(4) Where—
(a) the process adviser has given a notice to a creditor under section 558L in respect of an excludable debt, and
(b) the creditor concerned has not informed the process adviser of an objection within the time specified in the notice,
the process adviser shall include the excludable debt in the rescue plan.
(5) Where the process adviser has given a notice to a person under section 558P(9) in respect of a contract, the process adviser shall include in the rescue plan provision repudiating the contract unless it appears to the process adviser that circumstances have changed since the notice was given and it would no longer be appropriate to do so.
(6) The rescue plan shall—
(a) specify each class of members and creditors of the eligible company,
(b) specify any class of members and creditors whose interests or claims will not be impaired by the rescue plan,
(c) specify any class of members and creditors whose interests or claims will be impaired by the rescue plan,
(d) provide equal treatment for each claim or interest of a particular class unless the holder of a particular claim or interest agrees to less favourable treatment,
(e) if the process adviser considers it necessary or desirable to do so in order to facilitate the survival of the eligible company, and the whole or any part of its undertaking, as a going concern, specify any changes that should be made in relation to the management or direction of the company,
(f) if the process adviser considers it necessary or desirable to do so in order to facilitate such survival, specify any changes that he or she considers should be made in the constitution of the eligible company, whether as regards the management or direction of the company or otherwise,
(g) provide for its implementation (including any changes specified under paragraphs (e) and (f)) and the time within which it is to be implemented, and
(h) include such other matters as the process adviser deems appropriate.
(7) A director who fails, without lawful excuse, to implement any provision of the rescue plan which takes effect and which imposes a requirement on the directors of the eligible company within the time for implementing the rescue plan specified under subsection (6)(g) shall be guilty of a category 3 offence.
Further provision with respect to leases
558R. (1) Subject to subsection (3), a rescue plan for an eligible company shall not contain provision that provides for either or both of the following—
(a) a reduction in the amount of any rent or other periodical payment reserved under a lease of land that falls to be paid after the date from which the rescue plan would come into effect under section 558ZB or 558ZE, as the case may be, or the complete extinguishment of the right of the lessor to any such payments;
(b) as respects a failure—
(i) to pay an amount of rent or make any periodical payment reserved under a lease of land, or
(ii) to comply with any other covenant or obligation of such a lease, that falls to be paid or complied with after the date referred to in paragraph (a), a requirement that the lessor under such a lease shall not exercise, or shall only exercise in specified circumstances, any right, whether under the lease or otherwise, to—
(I) recover possession of the land concerned;
(II) effect a forfeiture of the lease or otherwise enter on the land;
(III) recover the amount of such rent or other payment; or
(IV) claim damages or other relief in respect of the failure to comply with such a covenant or obligation.
(2) Subsection (1) shall not apply if the lessor or owner of the property concerned has consented in writing in the prescribed form to the inclusion of the provision referred to in subsection (1) in the rescue plan.
Procedure where process adviser unable to prepare rescue plan
558S. (1) This section applies where the process adviser appointed in respect of an eligible company is unable to prepare a rescue plan for the company.
(2) As soon as practicable after the process adviser becomes aware of that fact, the process adviser shall—
(a) prepare a report setting out the matters specified in subsection (3),
(b) give a copy of the report to the directors of the eligible company, and
(c) give notice of that fact to—
(i) employees of the eligible company,
(ii) members of the eligible company,
(iii) creditors, and
(iv) the Revenue Commissioners.
(3) The matters referred to in subsection (2)(a) are—
(a) the reasons why a rescue plan could not be prepared for the eligible company, and
(b) recommendations as to the next steps to be taken by the directors of the eligible company (including the winding up of the company).
(4) The recommendations of the process adviser referred to in subsection (3)(b) shall not be binding on the eligible company or the directors of the company.
(5) Notwithstanding subsection (4), where—
(a) the process adviser recommends that the eligible company be wound up,
(b) the directors of the eligible company decide that the company should continue to trade,
(c) the eligible company continues to trade in pursuance of that decision, and
(d) within 6 months of that decision the eligible company is wound up,
the court may take that decision into account for the purposes of any application under section 610.
Chapter 5
Consideration of rescue plan
Process adviser’s duty to call meeting of members and creditors
558T. (1) This section applies where a process adviser has prepared a rescue plan under section 558Q.
(2) As soon as practicable after preparing the rescue plan, the process adviser shall call—
(a) the appropriate meetings of the creditors or the class concerned of them, and
(b) the appropriate meetings of the members or the class concerned of them,
for the purpose of considering the rescue plan.
(3) References in subsection (2) to the appropriate meetings of creditors or members as the case may be, are references to either—
(a) separate meetings of the particular creditors or members (as appropriate) who fall into the separate classes that, under the general law, are required to be constituted for the purpose of voting on the rescue plan, or
(b) where, under the general law, no such separate classes are required to be constituted for that purpose, a single meeting of the creditors or members (as appropriate).
(4) A meeting under this section shall be fixed for a date no later than 49 days after the date on which the process adviser is appointed.
(5) A meeting under this section shall be held at such place as is, in the opinion of the process adviser, the most convenient for the majority of the members or creditors or all, as the case may be.
(6) Different times or places may be named for the meetings of members and for those of creditors.
(7) Where an excludable debt is included in the rescue plan, the creditor concerned shall be entitled to vote at any meeting called under this section.
Notice of meeting under section 558T
558U. (1) This section applies where a process adviser calls a meeting under section 558T.
(2) The process adviser shall, at least 7 days before the day appointed for the meeting, give notice in writing in the prescribed form to every person entitled to attend the meeting of the time and place appointed for the meeting.
(3) Notice under this section shall be accompanied by—
(a) the rescue plan prepared under section 558Q,
(b) a statement of the assets and liabilities (including contingent and prospective liabilities) of the eligible company as at the date on which the rescue plan was prepared under that section,
(c) a description of the likely financial outcome of a winding up of the eligible company or of the application of a receivership to that company for each class of members and creditors,
(d) a statement by the process adviser explaining—
(i) the effect of the rescue plan,
(ii) the reasons why it is fair and equitable and not unfairly prejudicial,
(iii) the likely consequences of a failure to approve the rescue plan (including winding up or receivership), and
(iv) where appropriate, the process adviser’s views on the likely outcome for creditors if the eligible company were to be wound up,
(e) information about any changes in the management or direction of the eligible company that are specified in the rescue plan,
(f) a statement outlining any material interests of the directors of the eligible company and the effect of the rescue plan to the extent it is different to like interests of other persons,
(g) information about the procedure for agreeing to, proposing modifications to or objecting to the rescue plan at the meeting,
(h) a general and a special form of proxy (with neither the name nor description of the process adviser or any other person printed or inserted in the body of any such instrument of proxy),
(i) a statement setting out—
(i) the remuneration payable to, and the costs and expenses incurred by, the Chapter 2 process adviser under this Part, and
(ii) the remuneration payable to, and the costs and expenses incurred by, the process adviser appointed in respect of the eligible company by virtue of the passing of a resolution mentioned in section 558E(2) under this Part during the relevant period,
(j) an estimate of the additional remuneration that would be payable to, and the costs and expenses that would be incurred by, the process adviser under this Part if the rescue plan were to be approved pursuant to section 558ZB,
(k) an estimate of the additional remuneration that would be payable to, and the costs and expenses that would be incurred by, the process adviser under this Part if the rescue plan were not to be approved pursuant to section 558ZB, and
(l) such other documents and information as may be prescribed.
(4) The process adviser shall keep records and supporting evidence of the means by which notice is given to persons under this section.
(5) The proceedings at the meeting shall, unless the relevant court otherwise orders, be valid notwithstanding the fact that any member or creditor fails to receive notice of the meeting for any reason, unless the relevant court considers that the member or creditor has been materially prejudiced by that failure.
(6) In this section—
‘Chapter 2 process adviser’, in relation to an eligible company, means the person who performed the duties imposed on a process adviser by Chapter 2 of this Part in respect of the company;
‘relevant period’, in relation to a process adviser, appointed in respect of an eligible company by virtue of the passing of a resolution mentioned in section 558E(2), means the period—
(a) beginning with the date of the passing of the resolution, and
(b) ending on the date on which the rescue plan is prepared under section 558Q.
(7) A person who fails to comply with this section shall be guilty of a category 3 offence.
Proceedings at meeting under section 558T
558V. (1) This section applies in relation to a meeting called by the process adviser under section 558T.
(2) The process adviser or, if the process adviser is unable to act, someone nominated by him or her shall be chairperson.
(3) The chairperson may, with the consent of the meeting, adjourn it from time to time and from place to place but the adjourned meeting shall be held at the same place as the original meeting unless in the resolution for adjournment another place is specified.
(4) The chairperson of the meeting shall cause—
(a) minutes of the proceedings at the meeting to be drawn up and entered in a book kept for that purpose and signed by him or her, and
(b) a list of members or creditors present at the meeting to be made and kept in such form as may be prescribed and such list shall be signed by him or her.
(5) Other than on the matter of an adjournment, a meeting may not act for any purpose, unless there are present or represented at the meeting—
(a) where only one meeting of members and one meeting of creditors requires to be held by virtue of section 558T—
(i) at least 2 members, and
(ii) at least 3 creditors entitled to vote or all the creditors entitled to vote if the number entitled to vote shall not exceed 3,
or
(b) where separate meetings require to be held by virtue of that section in respect of members and creditors (or any class of members or creditors)—
(i) in the case of a meeting of members, at least 2 members, or
(ii) in the case of a creditors’ meeting, at least 3 creditors entitled to vote or all the creditors entitled to vote if the number entitled to vote shall not exceed 3.
(6) If within 30 minutes from the time appointed for the meeting a quorum of members or creditors, as the case may be, is not present or represented, the meeting shall be adjourned to the same day in the following week at the same time and place or to such other day or time or place as the chairperson may appoint.
(7) However, the day so appointed by the chairperson shall be not less than 4 nor more than 10 days after the day from which the meeting was adjourned.
(8) A person who fails to comply with subsection (4)(a) or (b) shall be guilty of a category 3 offence.
Proxies
558W. (1) This section applies where the process adviser appointed in respect of an eligible company calls a meeting of the members and creditors of the company under section 558T.
(2) A member or creditor of the eligible company may vote either in person or by proxy.
(3) An instrument of proxy shall be in the prescribed form.
(4) A member or a creditor may appoint any person a special proxy to vote at the meeting or any adjournment thereof.
(5) Subject to section 558X(2) a member or a creditor may appoint any person a general proxy.
(6) A member or a creditor may appoint the process adviser to act as his or her general or special proxy.
Supplemental provisions in relation to section 558W
558X. (1) Every instrument of proxy shall be lodged with the process adviser not later than four o’clock in the afternoon of the day before the meeting or adjourned meeting at which it is to be used.
(2) No person who is a minor shall be appointed a general or special proxy.
(3) In the case of a creditor or member who is incapable of writing because of blindness or other physical infirmity, an instrument of proxy of that creditor or member may, subject to subsection (4), be accepted if that creditor or member has attached his or her signature or mark to the proxy in the presence of a witness and that witness has added to the signature of that creditor or member the witness’s description and residence.
(4) Subsection (3) applies only if—
(a) all insertions in the instrument of proxy are in the handwriting of the witness, and
(b) the witness has certified, at the foot of the instrument of proxy, that all such insertions have been made by the witness at the request and in the presence of the creditor before the creditor attached his or her signature or mark or, as the case may be, the member before the member attached his or her signature or mark.
(5) Where a company is a creditor, any person who is duly authorised under the seal of that company to act generally on behalf of that company at meetings of members and creditors may fill in and sign the instrument of proxy on that company’s behalf and appoint himself or herself to be that company’s proxy.
(6) The instrument of proxy so filled in and signed by such person shall be received and dealt with as a proxy of that company but this is without prejudice to section 558ZAG.
Consideration by members and creditors of rescue plan
558Y. (1) This section applies to a meeting of members or creditors or any class of members or creditors called to consider a rescue plan for an eligible company in respect of which a process adviser has been appointed.
(2) Save where expressly provided otherwise in this section, this section shall not authorise, at such meeting, anything to be done in relation to such rescue plan by any member or creditor.
(3) At a meeting to which this section applies a modification of the rescue plan may be put to the meeting but may be accepted only with the consent of the process adviser.
(4) A rescue plan shall be deemed to have been accepted by a meeting of members or creditors or of a class of members or creditors when 60 per cent in number representing a majority in value of the claims represented at that meeting have voted, either in person or by proxy, in favour of the resolution for the rescue plan.
(5) Subject to section 558Z, a rescue plan shall be binding on—
(a) all the members or class or classes of members, as the case may be, affected by the rescue plan,
(b) all the creditors or the class or classes of creditors, as the case may be, affected by the rescue plan,
(c) the eligible company concerned, and
(d) the directors of the eligible company,
where eligible it is accepted by at least one class of creditors whose interests or claims would be impaired by implementation of the rescue plan and 21 days pass from the date of filing of the notice of approval with the office of the relevant court under section 558Z(6), and no objection is filed in accordance with section 558ZC.
(6) Nothing in subsection (4) shall, in the case of a member or creditor who abstains from voting, or otherwise fails to cast a vote, in respect of the rescue plan, be read as permitting such an abstention or failure to be regarded as a casting by that person of a vote against the rescue plan.
(7) Where a State authority is a creditor of the eligible company, such authority shall be entitled to accept a rescue plan under this section notwithstanding—
(a) that any claim of such authority as a creditor would be impaired under the rescue plan, or
(b) any other enactment.
(8) In subsection (7) ‘State authority’ means the State, a Minister of the Government, a local authority or the Revenue Commissioners.
(9) Section 192 shall apply to any resolution to which subsection (4) relates which is passed at any adjourned meeting.
Notification of approval of rescue plan
558Z. (1) This section applies where a rescue plan for an eligible company is approved in accordance with section 558Y.
(2) The process adviser shall, within 48 hours after the approval of the rescue plan, give notice of the approval in the prescribed form to the persons specified in subsection (3).
(3) The persons referred to in subsection (2) are—
(a) employees of the eligible company,
(b) the Revenue Commissioners,
(c) any creditor or member whose claim or interest would be impaired if the rescue plan were implemented, and
(d) such other persons as may be prescribed.
(4) Every notice given to persons referred to in subsection (3) shall be accompanied by the following documents—
(a) a copy of the rescue plan as approved under section 558Y,
(b) a statement by the process adviser explaining—
(i) the effect of the rescue plan,
(ii) the reasons why it is fair and equitable and not unfairly prejudicial, and
(iii) the likely consequences of any failure to implement the rescue plan (including winding up or receivership),
(c) a statement outlining any material interests of the directors of the eligible company and the effect of the rescue plan to the extent it is different to like interests of other persons,
(d) information in relation to the procedure for filing an objection to the approved rescue plan pursuant to section 558ZC, including:
(i) the identification of the relevant court office in which an objection should be filed,
(ii) a statement that an objector has 21 days to file an objection from the date notice of approval is filed with the relevant court office and providing the date on which notice of approval was filed,
(iii) a statement that if no objection is filed within the 21 day period, the rescue plan will become binding,
(iv) a statement that the person may only make submissions on any objection validly filed unless that objection is upheld, and
(v) a statement that a person may make submissions more generally only where the relevant court upholds an objection and seeks to modify the rescue plan,
(e) a copy of the prescribed form for making an objection, and
(f) any such further information as may be prescribed.
(5) The process adviser shall, within 48 hours after the approval of the rescue plan, deliver notice of the approval of the rescue plan to the Registrar.
(6) The process adviser shall, within 48 hours after the approval of the rescue plan, file notice of the approval of the rescue plan with the office of the relevant court.
(7) The process adviser shall keep records and supporting evidence of the means by which notice is given under this section.
(8) If default is made in complying with this section, the process adviser shall be guilty of a category 3 offence.
(9) Any bona fide error made by the process adviser in complying with the requirements of this section shall not of itself invalidate any approval or any steps taken pursuant to such an approval.
Process adviser’s report
558ZA. (1) This section applies where the meeting or meetings required to be held under section 558T (the ‘required meetings’) has, or have, taken place.
(2) The process adviser shall, within 49 days of his or her appointment, prepare a report setting out—
(a) the rescue plan that was considered at the required meetings,
(b) any modification of that plan that was agreed to at the required meetings,
(c) the outcome of the required meetings,
(d) a statement of the assets and liabilities (including contingent and prospective liabilities) of the eligible company as at the date of the report,
(e) a list of the creditors of the eligible company, the amount owing to each such creditor, the nature and value of any security held by any such creditor, and the priority accorded under sections 621 and 622 to any such creditor or any other statutory provision or rule of law,
(f) a list of the officers of the eligible company,
(g) the process adviser’s recommendations,
(h) the remuneration payable to, and the costs and expenses incurred by, the process adviser under this Part as at the date of the report, and
(i) such other matters as the process adviser deems appropriate.
(3) The process adviser shall give a copy of the report to—
(a) the eligible company concerned,
(b) employees of the eligible company,
(c) the Director,
(d) the office of the relevant court, and
(e) any interested party who, by written application to the process adviser, requests a copy of the report.
(4) The process adviser shall comply with the requirements imposed by subsection (3)(a) and (b) within 49 days of his or her appointment.
(5) If the relevant court, on an application to it in that behalf, so directs, there may be omitted from any copy of the report given under subsection (3)(e) to an interested party such parts of it as are specified in the direction of the relevant court.
(6) The relevant court may, in particular, on such an application, direct that there may be omitted from a copy of the report given under subsection (3)(e) any information the inclusion of which in such a copy would be likely to prejudice the survival of the eligible company, or the whole or any part of its undertaking, as a going concern.
Chapter 6
Objections to rescue plan
Confirmation of rescue plan
558ZB. (1) Subject to subsection (2), a rescue plan shall, notwithstanding any other enactment, become binding within the 21 days from the date of filing of the notice of approval with the office of the relevant court under section 558Z(6), provided no objection is filed by a creditor or a member within the 21 days from the date of filing of the notice of approval.
(2) Notwithstanding subsection (1), where a rescue plan is not compliant with this Act, the rescue plan shall not become binding.
(3) Where an objection is filed within the 21 days referred to in subsection (1), the provisions of sections 558ZD and 558ZZ apply.
Objection to rescue plan
558ZC. (1) A creditor or member may, subject to this section, file an objection to a rescue plan.
(2) Notice of an objection shall be sent in the prescribed form to—
(a) the process adviser, and
(b) the office of the relevant court.
(3) An objection may be made to a rescue plan on any of the following grounds—
(a) that the rescue plan unfairly prejudices the interests of the objector,
(b) that the rescue plan is unfair and inequitable in relation to the objector,
(c) that there was some material irregularity at or in relation to a meeting to which section 558Y applies,
(d) that a member or creditor has been materially prejudiced by not receiving notice of the meeting or any other notice required to be sent under the Act,
(e) that acceptance of the rescue plan by the meeting was obtained by improper means,
(f) that the rescue plan was put forward for an improper purpose,
(g) that it is not necessary for the survival of the eligible company, and the whole or any part of its undertaking, as a going concern that the contract specified in the objection be repudiated or affirmed,
(h) that the amount of loss or damage determined in respect of the repudiation of the contract specified in the objection is inadequate or excessive,
(i) that the provisions with respect to leases in section 558R apply,
(j) that the sole or primary purpose of the rescue plan is the avoidance of payment of tax due,
(k) that the rescue plan contains an unlawful provision, or
(l) such other grounds as may be prescribed.
(4) Any person who voted to accept the rescue plan referred to in section 558Y may not file an objection under this section except on the grounds—
(a) that such acceptance was obtained by improper means, or
(b) that after voting to accept the rescue plan the person became aware that the rescue plan was put forward for an improper purpose.
(5) Where the relevant court has approved under section 558P the affirmation or repudiation of a contract, an objection may not be made on the ground specified in subsection (3)(g) or (h).
(6) Objections filed in accordance with this section shall be considered by the relevant court in accordance with section 558ZD.
Court hearing in case of objection
558ZD. (1) An objection by a creditor or member under section 558ZC shall be set down for hearing by the relevant court as soon as may be after receipt of the objection by the relevant court.
(2) The following persons may appear and be heard at a hearing under subsection (1):
(a) the eligible company;
(b) the process adviser;
(c) any creditor or member whose claim or interest would be impaired if the rescue plan were implemented;
(d) the directors of the eligible company;
(e) any other person the relevant court considers appropriate.
(3) Any person entitled to appear and be heard at a hearing under subsection (1) shall be limited in the person’s submissions to the issues raised in any notice of objection under section 558ZC unless—
(a) an objection is upheld,
(b) the relevant court proposes to modify the rescue plan, and
(c) the High Court considers winding up the company.
(4) Where an objection is made under section 558ZC, the onus of proof shall be on the process adviser to establish that the objection should not be upheld.
(5) At a hearing under subsection (1) the relevant court may, as it thinks proper, subject to the provisions of this section and section 558ZE—
(a) dismiss the objection, or
(b) uphold the objection.
(6) Subject to subsection (8), an objection shall not be dismissed if the rescue plan contains a provision relating to a lease of, or any hiring agreement in relation to, property other than land and, in the opinion of the relevant court—
(a) subject to section 558R(1) the value of that property is substantial, and
(b) that provision is of like effect to a provision referred to in section 558R(1)(a) or (b).
(7) In deciding, for the purpose of subsection (6), whether the value of the property concerned is substantial, the matters to which the relevant court shall have regard shall include the length of the unexpired term of the lease or hiring agreement concerned.
(8) If the lessor or owner of the property concerned has consented in writing in the prescribed form to the inclusion of the provision referred to in subsection (6) in the rescue plan—
(a) subsection (6) shall not apply, and
(b) subsection (9)(a) shall not be subject to section 558R(1).
(9) Where the relevant court upholds an objection under this section, the relevant court may make such order as it deems fit, including, but not limited to the following, namely:
(a) an order modifying the rescue plan;
(b) an order approving the modifications of the rescue plan;
(c) an order that the decision of any meeting be set aside;
(d) an order that any meeting be reconvened.
(10) The relevant court shall not approve a modified rescue plan unless the relevant court is satisfied that—
(a) the modified rescue plan is fair and equitable in relation to any member or creditor whose interests or claims would be impaired by implementation,
(b) the modified rescue plan is not unfairly prejudicial to the interests of any interested party, and
(c) the modified rescue plan is compliant with this Act,
and in any case shall not approve any modified rescue plan if the sole or primary purpose of it is the avoidance of payment of tax due.
(11) Where the relevant court dismisses an objection under section 558ZC(3)(g), the relevant court shall be deemed to have approved the repudiation of the contract concerned.
(12) Where the relevant court dismisses an objection or approves a modified rescue plan, the rescue plan shall, subject to section 558ZZ(9) be binding on all the members or class or classes of members, as the case may be, affected by the rescue plan and also on the eligible company.
(13) Where the relevant court dismisses an objection or approves a modified rescue plan, the rescue plan shall, notwithstanding any other enactment but subject to section 558ZZ(10), be binding on all the creditors or the class or classes of creditors, as the case may be, affected by the rescue plan in respect of any claim or claims against the eligible company and any person other than the company who, under any enactment, rule of law or otherwise, is liable for all or any part of the debts of the company.
Supplemental provisions in relation to section 558ZD and section 558ZZ
558ZE. (1) Where the relevant court dismisses an objection or approves modified terms of a rescue plan under section 558ZD or 558ZZ, it may make such orders for the implementation of its decision as it deems fit.
(2) Where any objection under section 558ZD or 558ZZ is dismissed, the rescue plan shall come into effect immediately (unless the relevant court deems it appropriate to fix a later date).
(3) Where the relevant court approves a modified rescue plan under section 558ZD such a plan shall, subject to any further modifications made under section 558ZZ(6)(b), come into effect from a date fixed by the relevant court, which date (unless the relevant court deems it appropriate to fix a later one) shall be a date falling no later than 21 days after the date of the approval of the rescue plan.
(4) Where the relevant court dismisses an objection or approves a modified rescue plan, a certified copy of any order made by the relevant court under section 558ZD or 558ZZ shall be delivered by the process adviser, or by such person as the relevant court may direct, to the Registrar.
(5) Where the High Court upholds an objection under section 558ZD, the High Court may, if it considers it just and equitable to do so, make an order for the winding up of the eligible company, or any other order as it deems fit.
(6) Nothing in Chapter 6 confers on the Circuit Court any jurisdiction to hear a petition for the winding up of, or to wind up, a company.
(7) Notwithstanding—
(a) subsection (4), or any other provision of Chapter 3, nothing in this Part shall prevent the process adviser from including in a modified rescue plan any provisions that will not involve the impairment of the interests of members or creditors of the eligible company, or
(b) any foregoing provision of Chapter 3, nothing in Chapter 3 shall prevent the process adviser from including in a rescue plan any provision that provides for a reduction of the eligible company’s company capital nor, subject to subsection (8), the relevant court from approving any such provision in the context of a modified rescue plan.
(8) If the extent of the reduction of the eligible company’s company capital provided for in any modified rescue plan as referred to in subsection (7)(b) would, in the opinion of the relevant court, and having regard to—
(a) the scale and nature of the business that the eligible company carries on, and
(b) the likely liabilities it will incur on an on-going basis,
result in the eligible company’s having an amount of the eligible company capital that is manifestly inadequate, the relevant court shall not approve the modified rescue plan or, where appropriate, shall approve the modified rescue plan subject to a modification that a lower level of reduction, as determined by the relevant court, of the eligible company’s company capital shall have effect under the rescue plan.
Chapter 7
Liability of third parties for debts of company
Definitions (Chapter 7) and savings
558ZF. (1) In this Chapter—
‘creditor’ shall be read in accordance with section 558ZG;
‘debt’ shall be read in accordance with section 558ZG;
‘liability’ shall be read in accordance with section 558ZG;
‘third person’ shall be read in accordance with section 558ZG.
(2) Nothing in this Chapter shall affect the operation of—
(a) section 558N(4)(f), or
(b) any rule of law whereby any act done by the creditor results in the third person being discharged or released from his or her obligation in respect of the liability.
Circumstances in relation to which subsequent provisions of Chapter have effect
558ZG. Subject to section 558ZH(2), the subsequent sections of this Chapter have effect in relation to the following liability (the ‘liability’), namely the liability—
(a) of any person (the ‘third person’) whether under a guarantee or otherwise;
(b) in respect of a debt (the ‘debt’) of an eligible company to which a process adviser has been appointed that is owed to another (the ‘creditor’).
General rule: liability of third person not affected by rescue plan
558ZH. (1) Notwithstanding the confirmation of a rescue plan, the liability of a third person shall not be affected by the fact that the debt is the subject of a rescue plan that has taken effect under section 558ZB or 558ZE, but this is subject to subsections (2) and (3).
(2) The third person and the creditor may provide in an agreement between them that the liability of a third person shall be so affected.
(3) Neither subsection (1) nor any of the subsequent provisions of this Chapter shall apply if the third person is an eligible company in respect of which a process adviser has been appointed.
Enforcement by creditor of liability: restrictions in that regard unless certain procedure employed to benefit of third person
558ZI. (1) If the creditor proposes to enforce, by legal proceedings or otherwise, the obligation of the third person in respect of the liability, then he or she shall, not more than 48 hours after he or she has received notice of a meeting under section 558Y, give a notice to the third person containing the following offer.
(2) That offer is an offer in writing by the creditor to transfer to the third person (which the creditor is, by virtue of this section, empowered to do) any rights, so far as they relate to the debt, he or she may have under section 558Y to vote in respect of a rescue plan for the eligible company.
(3) If that offer is accepted by the third person, that offer shall, if the third person furnishes to the process adviser at the meeting concerned, a copy of the offer and informs the process adviser of his or her having accepted it, operate, without the necessity for any assignment or the execution of any other instrument, to entitle the third person to exercise the rights referred to in subsection (2).
(4) However, neither that transfer nor any vote cast by the third person on foot of the transfer shall operate to prejudice the right of the creditor to object to the rescue plan under section 558ZC.
(5) If the creditor fails to make the offer referred to in subsection (1) in accordance with that subsection, then, subject to subsection (6), the creditor may not enforce by legal proceedings or otherwise the obligation of the third person in respect of the liability.
(6) Subsection (5) shall not apply if—
(a) a rescue plan for the eligible company does not take effect under section 558ZB or 558ZE, and
(b) in either of those cases, the creditor has obtained the leave of the relevant court to enforce the obligation of the third person in respect of the liability.
Payment by third person to creditor post rescue period – statutory subrogation in favour of third person in certain circumstances
558ZJ. (1) This section applies where the third person makes a payment to the creditor in respect of the liability after the rescue period in relation to the eligible company concerned has expired.
(2) Where this section applies any amount that would, but for the foregoing payment, be payable to the creditor in respect of the debt under a rescue plan that has taken effect under section 558ZB or 558ZE in relation to the company shall become and be payable to the third person upon and subject to the same terms and conditions as the rescue plan provided that it was to be payable to the creditor.
Chapter 8
Conclusion of rescue process
Conclusion of rescue period and termination of appointment of process adviser
558ZK. The appointment of a process adviser in respect of an eligible company shall be terminated—
(a) where a rescue plan for the eligible company takes effect under section 558ZB or 558ZE, on the date on which it takes effect under the section concerned,
(b) where no rescue plan for the eligible company is approved at a meeting held under section 558T, on the date on which the process adviser gives a copy of his or her report to the eligible company under section 558ZA(3),
(c) where—
(i) the relevant court upholds an objection to a rescue plan for the eligible company, and
(ii) no rescue plan takes effect for the eligible company,
on the date on which the relevant court upholds the objection or such later date as may be fixed by the relevant court, or
(d) on such other date as may be prescribed.
Power of relevant court to revoke rescue plan where fraud
558ZL. (1) An eligible company or any interested party may, within 180 days after the date on which the rescue plan for the company takes effect under section 558ZB or 558ZE, apply to the court for revocation of the rescue plan on the grounds that it was procured by fraud.
(2) On such application, the court may, if satisfied that that rescue plan was procured by fraud, revoke the rescue plan on such terms and conditions, particularly with regard to the protection of the rights of parties acquiring interests or property in good faith and for value in reliance on that rescue plan, as it deems fit.
(3) As soon as practicable after the revocation under this section of such a rescue plan, a certified copy of the order made by the court shall be delivered to—
(a) the Registrar, and
(b) the Director,
by such person as the court may direct.
Power of relevant court to order the return of assets improperly transferred
558ZM. (1) Where, on the application of the process adviser for an eligible company at any time during the rescue period, it can be shown to the satisfaction of the relevant court that—
(a) any property of the eligible 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 eligible company, its creditors or members,
the relevant court may, if it deems it just and equitable to do so, make the following order.
(2) That order of the relevant 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 process adviser on such terms or conditions as the relevant 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 an eligible company to which section 604 applies.
(4) In deciding whether it is just and equitable to make an order under this section, the relevant court shall have regard to the rights of persons who have a bona fide and for value acquired an interest in the property subject of the application.
Director’s power to examine books and records
558ZN. (1) In this section—
‘appropriate person’ in relation to the eligible company referred to in subsection (2), means any of the following—
(a) the eligible company,
(b) irrespective of the time at which he or she holds or held such status—
(i) a process adviser of the eligible company,
(ii) an officer of the eligible company, or
(iii) a receiver appointed to any property of the eligible company;
‘books and records’ means the books and records of the eligible company and, in addition, in the case of a request made of a process adviser, the books and records of the process adviser.
(2) At any time during the rescue period relating to an eligible company or after its conclusion, the Director may, where he or she considers it necessary or appropriate, request (specifying the reason why the request is being made) an appropriate person to produce to the Director the books and records for examination, and the appropriate person shall comply with the request.
(3) In the case of a request of a process adviser under subsection (2), the request may relate to a particular eligible company in respect of which the process adviser is acting, or has acted, as process adviser under this Part or to all eligible companies in respect of which the process adviser is so acting or has so acted.
(4) An appropriate person shall—
(a) answer any questions of the Director concerning the content of the books and records requested to be produced under subsection (2),
(b) if he or she is a process adviser, answer any questions of the Director concerning a particular eligible company in respect of which the process adviser is acting, or has acted, as process adviser under this Part or, as the case may be, all eligible companies in respect of which the process adviser is so acting or has so acted,
(c) give to the Director such assistance in the matter as the appropriate person is reasonably able to give.
(5) An appropriate person shall give to the Director such access and facilities as are necessary for inspecting and taking copies of books and records requested to be produced by him or her under subsection (2).
(6) A request under subsection (2) may not be made in respect of books and records relating to a rescue period that has ended more than 6 years prior to the date of the request.
(7) An appropriate person who—
(a) fails to comply with a request under subsection (2),
(b) fails to answer any question under subsection (4)(a) or (b),
(c) fails to give the Director the assistance referred to in subsection (4)(c), or
(d) without lawful excuse, fails to give the Director the access or facilities referred to in subsection (5),
shall be guilty of a category 2 offence.
(8) Nothing in this section shall be taken as excluding or restricting any statutory rights of the Government, a Minister of the Government or a person acting under the authority of the Government or a Minister of the Government, or the powers of any person under Part 13.
Reporting to Director of Corporate Enforcement of misconduct by process advisers
558ZO. (1) Where a disciplinary committee or tribunal (however called) of a prescribed professional body—
(a) finds that a member of that body who is or has acted as a process adviser in respect of an eligible company under this Part has not maintained appropriate records as required by this Part,
(b) has reasonable grounds for believing that such a member has committed a category 1 or 2 offence while so acting,
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 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.