Examinership is thirty six years old this year, and for most of that time its principles were stated in a handful of judgments from the financial crisis. The last five years have added to them. A Norwegian airline, an American pharmaceutical group, a Northern Irish fit out contractor, a Dublin property vehicle and the national governing body for equestrian sport have each brought the process before the High Court, and the judgments that followed, together with the European restructuring reforms of 2022, have turned what used to be a set of discretionary considerations into something closer to settled policy. This article sets out those principles, the cases that developed them, and what they mean for a board deciding whether, and when, to seek the protection of the court.
What examinership is for
The court may appoint an examiner to a company that is, or is likely to be, unable to pay its debts, where no resolution or order for winding up exists, and where the court is satisfied that there is a reasonable prospect of the survival of the company, and of the whole or any part of its undertaking, as a going concern.1 From the moment the petition is presented the company is under the protection of the court for seventy days, which the court may extend to one hundred, and during that period no proceedings may be taken against it, no receiver appointed, no security enforced and no winding up begun. The examiner formulates proposals for a scheme of arrangement, puts them to meetings of members and creditors, and returns to the court for confirmation. If at least one class of impaired creditors accepts the proposals, and the court is satisfied that they are fair and equitable to any class that did not accept them and not unfairly prejudicial to any interested party, the scheme binds every creditor, including those who voted against it.
The courts have been clear since Re Traffic Group Ltd that the purpose of all this is the survival of the enterprise and the employment it supports, for the benefit of the wider economy, and not the rescue of the shareholders or the protection of the directors.2 That principle was applied with some force in March 2026 in Re KC Capital Property Group Ltd, where Twomey J refused to confirm the appointment of an examiner to a special purpose vehicle formed to hold a Dublin development site. The company’s only employees were its two investors, the contractor whose workforce was actually on the site opposed the petition, and the receivers already in place could complete the development. The court found no case in which a vehicle of that kind had obtained an examinership, and it was not prepared to make this the first. Examinership is for a real enterprise with real jobs.3
The threshold, and the court’s discretion
The threshold is the reasonable prospect of survival, and the Supreme Court settled its meaning during the financial crisis. In Re Gallium Ltd and Re Vantive Holdings the court held that the onus is on the petitioner, that a reasonable prospect means more than a mere possibility but less than a probability, and that the independent expert’s report which accompanies the petition must give the court a real basis for the conclusion rather than an assertion of it.4 The threshold has not been raised since. In Re Mainline Power Ltd in July 2024 the High Court confirmed the appointment of an examiner over the opposition of a creditor who sought a winding up instead, restating that the prospect need only be reasonable, not probable, that the court retains a discretion to refuse even where the threshold is met, and that the discretion will be exercised against a petitioner only for serious wrongdoing, not for allegations that remain unproven.5
What has changed is the court’s attention to the timing of the petition. In Re New Look Retailers (Ireland) Ltd in 2020 McDonald J refused to appoint an examiner to a retailer that was still paying its rent in full and was not at imminent risk of ceasing to trade, although the court accepted that it would become insolvent within months and had a reasonable prospect of survival. Examinership is a serious and drastic remedy, particularly for creditors whose rights are suspended and then compromised, and a petitioner must show a real necessity for it at the time of the petition, having first made appropriate efforts to resolve its position with its creditors by agreement.6 The landlords who opposed the petition had not been given that chance. The decision established that there is such a thing as too early, and it is read alongside the provisions that make it possible to be too late.
Utmost good faith
A petition is presented ex parte, and the interim appointment that usually follows it takes effect against every creditor before any of them has been heard. The price of that procedure is that the petitioner must disclose everything that bears on the application, including what tells against it. The Supreme Court said so in Vantive, and KC Capital shows the rule being enforced. The petition there omitted an earlier valuation that differed materially from the one relied on, and the company had moved money belonging to its secured creditor to unsecured creditors within hours of receiving letters of demand. Twomey J held that the urgency of an application made in the days after a receiver is appointed does not excuse the omission of material information, and treated the want of candour as a ground for refusal in its own right.7 The petition is not the place for advocacy. It is the place for the facts, all of them, and a board that has spent the weeks before the petition doing things it would prefer the court not to see has usually disqualified itself from the remedy.
Reach
The most visible development of the period has been the willingness of the High Court to take jurisdiction over companies that are not Irish. In December 2020 Quinn J appointed an examiner to the Irish subsidiaries of the Norwegian Air group, and to Norwegian Air Shuttle ASA itself, a Norwegian company whose only Irish assets were the shares in those subsidiaries, as a related company under section 517, on the ground that the group’s operations were so bound up with Ireland that the parent had a real and deep connection to the State.8 The examinership ran alongside a reconstruction in Norway, the court permitted the repudiation of aircraft leases, ground handling and fuel contracts and, for the first time, guarantees, and the scheme was recognised in England and in the United States.9 In 2022 the court confirmed a scheme for Mallinckrodt plc, the Irish holding company of an American pharmaceutical group, that mirrored a Chapter 11 plan in Delaware.10 In July 2023, in Re Mac Interiors Ltd, the court appointed an examiner to a company incorporated in Northern Ireland, outside the European Union, on the ground that its centre of main interests was in Dublin, where it had traded for twenty years, held its board meetings, paid its tax, employed its staff and dealt with two thirds of its creditors.11 A company that is run from Ireland can be rescued in Ireland, wherever it was registered.
Conditional schemes
The traditional position was that the court would not confirm proposals that depended on investment which the investor had not yet committed, particularly where the conditions allowed the investor to walk away or to improve its terms. Norwegian Air and Mallinckrodt softened that rule without abandoning it. In each case Quinn J confirmed proposals whose effectiveness depended on events outside the court’s control, a capital raising in the Norwegian market in one case and the satisfaction of twenty three conditions to an American plan in the other, and in each case he said that confirmation on such terms should be exceptional. What made the cases exceptional was that the conditionality was a necessary feature of the restructuring rather than a device for the benefit of a particular investor or shareholder, that creditors would not be impaired if the conditions failed, and that the risk of the rescue collapsing through delay outweighed the limited prejudice of confirming a scheme that might not take effect.12 The lesson for an examiner is that conditions are tolerated where they serve the rescue and not a party to it.
Classes of creditors
Mac Interiors, having established the court’s reach in July 2023, demonstrated its rigour in October. The examiner had placed a group of trade creditors with whom the company expected to continue working, described as retained project creditors, in a class of their own, and that class was the only impaired class to vote in favour of the scheme. The remaining unsecured creditors, dominated by the Revenue Commissioners, voted against it, and Revenue objected to confirmation on the ground that the classes were wrongly constituted. Quinn J agreed. The principles governing the composition of classes are the same in examinership as in any scheme of arrangement. Creditors are classed by their legal rights, and a difference of interest justifies a separate class only in exceptional circumstances, on a distinction that is verifiable, clearly defined and not extraneous to the creditors’ rights against the company. The prospect of a future trading relationship was none of those things. The meetings had therefore not been validly convened, the court had no jurisdiction to confirm the scheme, and the company was wound up.13 An examiner who draws the classes to produce an accepting class will lose the scheme, and the company with it.
The 2022 reforms
The European Union (Preventive Restructuring) Regulations 2022 transposed the Directive on preventive restructuring frameworks by amending Part 10 rather than replacing it, and most of the changes tightened the process in the creditors’ favour.14 The independent expert must now address whether the continuation of the business satisfies a best interests of creditors test, which asks whether any dissenting creditor would be worse off under the scheme than in a liquidation or the next best alternative, and the court may not confirm proposals that fail that test where a creditor challenges them on it. Creditors whose claims are not impaired have no vote, and the examiner may not rely on the votes of creditors who would recover nothing in a winding up. Liabilities certified by the examiner during the protection period, and the costs of negotiating and advising on the scheme, have been given firmer protection against challenge if the company is wound up within six months of the protection period ending.
The reform that matters most to directors is section 224A of the Companies Act 2014. A director who believes, or has reasonable cause to believe, that the company is or is likely to be unable to pay its debts must have regard to the interests of the creditors, to the need to take steps to avoid insolvency, and to the need to avoid deliberate or grossly negligent conduct that threatens the viability of the business.15 The duty is owed to the company and sits alongside the existing exposure to a declaration of reckless trading. The Regulations also inserted a provision on early warning tools, which imposes no mandatory step but makes it harder for a director to say that the signs were not there to be seen.16 Between them, the new duty and the New Look principle define the window within which a board is expected to act. Too early, and the petition is unnecessary. Too late, and the directors have failed in their duty.
When should a board take protective action
The question a board asks is usually whether it is too soon. The question the law asks is whether the directors have reasonable cause to believe that the company is or is likely to become unable to pay its debts, and from that moment the duty in section 224A is engaged whether or not a petition follows. The practical signals are familiar. A cash flow forecast that runs out inside the next quarter. Revenue debt that is being rolled rather than paid, or a twenty one day demand under section 570. A bank that has reserved its rights or called for a plan. A landlord that has served a forfeiture notice. A principal supplier that has moved the company to cash on delivery. None of these is itself a reason to petition. Each is a reason to take advice, and to begin the work that a petition will require, so that the decision when it comes is made with the papers ready rather than with the papers to be written.
That work takes time, and the time is not available once the crisis arrives. The independent expert needs weeks, not days, to produce a report that will satisfy the Gallium standard, and the report cannot be commissioned until the company has a credible account of how it would survive, which usually means an investor identified, a funding plan for the protection period, and a view of which contracts and leases the examiner would need to repudiate. The engagement with creditors that New Look requires has to happen before the petition, and it has to be documented, because the court will ask what efforts were made. The petition itself must be complete and candid, which means assembling the valuations, the correspondence and the bank statements that an opposing creditor will later put before the court if the company does not. A board that starts this exercise at the first signal has a choice of outcomes, including, for a small company, the rescue process that avoids the court altogether. A board that starts it at the last signal has a choice of liquidators.
Time is of the essence
Three clocks run against a company in difficulty, and each is short. The first is the receiver’s. The court will not hear a petition where a receiver has stood appointed to the whole or any part of the company’s property for a continuous period of three days before the petition is presented.17 A bank that appoints a receiver on a Monday has closed the door to examinership by Thursday unless the petition is in the Central Office before then, and a board that does not know this will learn it from the receiver. The second is the protection period. Seventy days, extendable to one hundred, is the whole of the time available to formulate proposals, negotiate with an investor, convene meetings and return to court, and the examiner must report to the court within thirty five days of appointment on whether proposals can be formulated at all. A company that enters examinership without an investor in view is spending that period looking for one. The third is the company’s own cash. The protection of the court does not pay wages, and liabilities incurred during the period rank ahead of everything else only if the examiner certifies them, which the examiner will do only for what is necessary to the survival of the business.
The cases of the last five years point the same way. The court will rescue a company that is run from Ireland, however it is registered, that employs people, that comes to court at the point of real necessity and not before, that tells the court everything, and that brings with it a scheme whose conditions serve the rescue and whose classes are honestly drawn. It will not rescue a vehicle with no employees, a petitioner who has hidden the inconvenient facts, or a scheme whose majorities have been manufactured. Which of those a company turns out to be is decided, more often than not, in the months before the petition, by whether its directors read the signals and acted on them while there was still time to act.
As this article was completed, the examinership of Horse Sport Ireland, the national governing body for equestrian sport, was before the High Court, with the examiner reporting a reasonable prospect of survival and a scheme in prospect. It is a reminder that the process is not confined to trading companies, and that an organisation with forty seven employees and three million euro of liabilities can be given the breathing space to put itself right. It is also a reminder that the breathing space has to be asked for in time.
This article is for general information only and does not constitute legal advice. The decision to seek the protection of the court, and the timing of it, depend on the financial position of the particular company and on the duties of its directors at that time, and advice should be taken as soon as the company’s ability to pay its debts is in doubt.
Notes
- Companies Act 2014, sections 509, 520 and 534. ↩
- Re Traffic Group Ltd [2008] 3 IR 253 (High Court, Clarke J); Re Kitty Hall Holdings Ltd [2017] IECA 247. ↩
- Re KC Capital Property Group Ltd, KC Capital Property 182 Ltd and KC Capital Property 185 Ltd [2026] IEHC 115 (High Court, Twomey J, 6 March 2026). ↩
- Re Gallium Ltd [2009] IESC 8; Re Vantive Holdings [2009] IESC 69. ↩
- Re Mainline Power Ltd (High Court, 16 July 2024). ↩
- Re New Look Retailers (Ireland) Ltd [2020] IEHC 514 (High Court, McDonald J). ↩
- Re KC Capital Property Group Ltd [2026] IEHC 115, above; Re Vantive Holdings [2009] IESC 69. ↩
- Re Arctic Aviation Assets DAC and Norwegian Air Shuttle ASA [2020] IEHC 664 (High Court, Quinn J, December 2020); Companies Act 2014, section 517. ↩
- Companies Act 2014, section 537; A&L Goodbody, The five key points arising from the Norwegian Air Shuttle examinership (2021). ↩
- Re Mallinckrodt plc [2022] IEHC 270 (High Court, Quinn J, 27 April 2022). ↩
- Re Mac Interiors Ltd (High Court, Quinn J, 11 July 2023, Record No. 2023/90 COS); Regulation (EU) 2015/848 on insolvency proceedings (recast), Article 3(1); Companies Act 2014, section 508(2). ↩
- Re Arctic Aviation Assets DAC [2021] IEHC 272 (High Court, Quinn J, order of 26 March 2021, judgment of 22 April 2021); Re Mallinckrodt plc [2022] IEHC 270. ↩
- Re Mac Interiors Ltd [2023] IEHC 549 (High Court, Quinn J, October 2023). ↩
- European Union (Preventive Restructuring) Regulations 2022 (S.I. No. 380 of 2022), transposing Directive (EU) 2019/1023; Companies Act 2014, sections 529 and 541 as amended. ↩
- Companies Act 2014, section 224A, inserted by the European Union (Preventive Restructuring) Regulations 2022. ↩
- Companies Act 2014, section 271A; section 610 (reckless trading). ↩
- Companies Act 2014, section 512(3). ↩