An examinership ends when the compromise or the scheme of arrangement comes into effect (it may also end at an earlier date, if the Court so decides).
The examiner’s appointment terminates on that day.
The rule on delivering certain documents to the CRO – copies of any orders made regarding the hearing of irregularities, the confirmation of proposals or their revocation – is the same, and publication of this fact must be done in the CRO Gazette within 14 days after delivery to the CRO (Section 555). Not to do so is to be guilty of a Category 4 Offence.
The Category 3 Offence is set for professional bodies where an internal disciplinary body or tribunal finds that a member has not conducted an examinership properly, but fails to report this to the Director of Corporate Enforcement (Section 558).
If a fraud occurred, the company or any interested party may ask the Court to revoke the confirmation of the compromise or the scheme of arrangement. The time limit for making this application is within 180 days (6 months) of the confirmation. The steps to be carried out in this event are set out here (Section 553).
This section (Section 554) is a re-enactment of Section 29 of the C(A)A 1990.
Usually, the examiner is entitled to be paid costs and expenses out of the revenue of the company, or out of the proceeds of realised assets.
The examiner’s costs have priority to all others and must be paid in full (i.e. if the company subsequently goes in to liquidation, the examiner’s costs are to be paid ahead of the official liquidator’s).
Liabilities which are certified by the examiner in the course of the examinership, as expenses properly incurred, (Section 529) must be paid in full in priority to all other claims (except claims secured by a mortgage, charge, lien or other fixed encumbrance, or a pledge).
While the examiner is entitled to seek the assistance of other persons in carrying out her functions, the statute says that she should “in so far as is reasonably possible, make use of the services of the staff and facilities of the company” to which she has been appointed.
The old law on fraudulent dispositions – found at Section 139 of the CA 1990 – also applied to examiners (by virtue of Section 180(2) of the CA 1990. This is re-enacted here (Section 557).
The essence of the rule is that where any kind of company property was disposed of in any way AND the effect of this is to perpetrate a fraud on the company, its creditors or members, the Court may make an order requiring the person who now possesses the relevant property to deliver it to the examiner, or to pay a sum in lieu of it to the examiner.
The Court makes the order where it thinks it just and equitable to do so.
The provision does not apply to an asset which is transferred with a view to giving a creditor an “unfair preference” (this used to be known as “fraudulent preference” but the language has been changed). In that case, Section 604 of the 2014 Act applies.