P.A. Mc'Cormack and Co
Personal & Corporate Insolvency
 

 

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Personal & Corporate Insolvency / Turnaround & Recovery



With current economic conditions effecting businesses & individuals every day, many are facing growing financial difficulties and the deterioration of profitability or increasing losses.

Companies in financial difficulties often find that their problems can intensify rapidly, unless remedial action is taken in a quick & timely manner.

We offer you our extensive experience and guide you through this difficult time. Where possible, we will devise a plan for recovery offering practical business recommendations and future strategies.

Rescue may not always be feasible and in this case we will offer advice and recommendations on the most appropriate form of winding up the organization.  We will guide directors / equity holders through the insolvency process.

The insolvency of a company can be a stressful time for Directors. Often the reasons for insolvency are beyond their control. The first point of concern for many Directors is knowing when to cease trading. If the business continues to run once insolvent, Directors run the risk of Reckless Trading.

If you are aware that your company is experiencing financial difficulties / insolvency, it is imperative that you take advise at your earliest opportunity.


Our services include -
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Business reviews

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Personal Insolvency Services

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Turnaround Solutions

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Funding solutions

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Liquidations

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Examinations


Turnaround Solutions

The process of recovery may be broken down as follows:
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Identify the problems

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Assessment of business viability

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Devising a recovery strategy

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Monitoring the recovery strategy


We carry out an assessment of your business and offer you appropriate solutions so that you can survive and go on to future success.


Personal Insolvency Bill 2012

The Personal Insolvency Bill is due to be passed into law in November 2012 and the Personal Insolvency Board is expected to be in place and operational by the end of the first quarter of 2013. It is estimated that between 40 and 50 thousand people will avail of the provisions provided for in the Personal Insolvency Bill within 12 months of its introduction.

Below please see a brief summary of the provisions provided in the Bill.

DRN - Debt Relief Note
- unsecured debt < 20k. Disposable income < 60 per month, assets < 400. Typically for credit / store cards, utility bills, personal overdraft / loans.

DSA - Debt Settlement Arrangement
Unsecured debt > 20k, no upper limit. Once in a lifetime only, all creditors treated on a pro rata basis. Typically for personal guarantees (e.g. Bank guarantees for a company), personal overdrafts / loans, credit cards and other unsecured debts. Personal Insolvency Practitioner engaged for 5 year period, possible 1 year extension. Requires approval of 65% of creditors in value at meeting. Provides protection from bankruptcy petition, enforcement of judgement, no legal proceedings for recovery of debt. Debtor is discharged from remaining debts owed. Certain debts are excluded from DSA's.

PIA - Personal Insolvency Arrangement
Debts > 20k with a 3m ceiling for Secured debt (unsecured can also be included). Requires support of 65% creditors including 50% of both secured and unsecured in value - then binding on all. Typical debts include residence mortgage, investment properties, buy to let mortgages, personal guarantees and loans, credit cards, overdrafts and personal loans. Typically last 6 years and can be extended for a further year. Under the supervision of a Personal Insolvency Practitioner who must be fair to all parties. Typically after 6 years will exit PIA debt free except for mortgage and investment property loans which will then be performing.


Liquidations
A liquidation is a method of dissolving a company. There are three types of liquidation available:


Members Voluntary Liquidation :
Where a company has reached the end of its useful life, the members may decide to wind up the company, primarily for the purposes of realising and distributing its assets. In a situation where a company is solvent and can clear all liabilities due to its creditors, a Members’ Voluntary Liquidation is the appropriate mechanism used to wind up the company.

Creditors Voluntary Liquidation :
In a Creditors’ Voluntary Liquidation, the Liquidator is appointed to the company by the Creditors of the insolvent company. The process commences with the Directors passing a resolution to make a recommendation to the Members that a Liquidator be appointed because the company is insolvent and cannot pay it’s debts as they fall due. The Liquidator is responsible for realising all of the company’s assets on behalf of the creditors and shareholders. The Liquidator reports to the Director of Corporate Enforcement in accordance with the Company Law Enforcement Act, 2001.

Compulsory Liquidations :
Compulsory Liquidation is the name given to the form of liquidation which is brought about by Order of the High Court. The company is insolvent and cannot pay its debts as they fall due. The procedure is brought about by way of petition. The petition can be taken by the company itself or creditors of the company.

The Liquidator, known as the "'Official Liquidator", is appointed by the Court and is an officer of the Court. Under special circumstances, a Provisional Liquidator may be appointed, for example if there is a risk of the assets being dissipated.


Examination
Examinations are now back in vogue as they provide protection to a company while its future viability is assessed.

The Examination process places the company under the protection of the court for a certain period, while the affairs of the company are assessed by the examiner who should ascertain whether the company is capable of being rescued or whether it is in fact ‘terminally insolvent’. If the company is capable of rescue, the examiner must bring forward a scheme for this purpose. The stated goal is to “facilitate the survival of the company and the whole or any part of its undertaking as a going concern.” It provides for a statutory period in which some compromise with the creditors can be worked out. There is a clear attempt to avoid receivership and liquidation if that is possible. This is in keeping with modern thinking on insolvency matters which places the emphasis on corporate rescue, rather than on liquidation with the knock-on effects that this often brings. In effect the examination procedure is a much more sophisticated version of the basic rescue process provided for under s201 of the 1963 Act.

We advise on the options available to an insolvent company. We also act as liquidators, and have been advising companies on insolvency matters for many years.


For a confidential consultation, without obligation, to discuss your specific requirements please call our office on 059 9130422 or info@pamccormack.com





Carlow Accountants

Flemington House,
1 Brown St.,
Carlow
Ireland
Tel: 059 9130422
Fax: 059 9133891
Email: info@pamccormack.com

Line

Clifton House,
Lower Fitzwilliam Street,
Dublin 2
Ireland
Tel/ Fax: 01 4923531

 

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