- 12 April 2021
- Posted by: Niamh Gibney
- Categories: Banking, Commercial Law, Commercial Litigation, Commercial Litigation, Insolvency
The “Summary Rescue Process”
The future of corporate rescue for small and micro companies
A “Summary Rescue Process” restructuring framework has been announced by Robert Troy (Minister for Trade Promotion, Digital and Company Regulation) which is part of the Government’s stabilisation response to the ongoing challenges of the Covid-19 pandemic.
This framework is aimed to help small and micro companies who are facing economic difficulties. A public consultation has been launched seeking views on how such companies could survive the ongoing challenges and pressures faced throughout this pandemic, now and into the future.
The final particulars of how the process will work are still up for debate. However, it is largely thought to operate as a streamlined examinership type process.
With that in mind, it is intended that the Summary Rescue Process would be more efficient, reduce cost and remove the necessity of having to make an application to court which is a material feature of a typical examinership.
- Available to small and micro companies
- Commenced by way of director’s resolution
- Shorter protection period (in comparison to examinership)
- Overseen by insolvency practitioners
- Approval of rescue plan by a simply majority in value of creditors
- No requirement for any court application
- Safeguards to prevent irresponsible and dishonest director behaviour
Further information is available on here: https://www.gov.ie/en/press-release/9993d-minister-troy-opens-public-consultation-on-proposed-summary-rescue-process/
This process is particularly relevant given small and micro companies represent 98% of businesses in Ireland, many of which have been adversely impacted by Covid-19 and are struggling to survive. Accordingly, this corporate rescue offering is timely. Reddy Charlton LLP will provide a further update as the process takes shape.