Damien English (Meath West, Fine Gael) | Oireachtas source

I am grateful for the opportunity to speak about the Bill proposed by the Deputy Stephen Donnelly, the Companies (Amendment) Bill 2014. While I may not agree with all its contents, I agree with the intent behind it, to protect viable companies, jobs and State revenue that could be lost if businesses were to fail. The Deputy was helped by Mr. Barry Lyons, solicitor, and Mr. Ross Maguire, senior counsel, who are totally genuine. Having read the Bill and listened to the Deputy's speech, this is an attempt to bring about a change that we would all like to see in making the process simpler, easier to access and less costly. The Minister has championed this change in the past two years. It was also highlighted in the programme for Government. We all want to do something about it and tabling a Bill helps the debate and will move it forward. I do not agree with some parts of the Bill and the Minister has outlined many more instances where the Government does not agree with it.

The same protections would not be available under the Bill as under the current system. While I accept the proposed changes to the examinership process would significantly reduce the cost and the time involved in the process and make it more accessible to business, I do not agree that they retain all of its current advantages. It would retain them for the company which would be protected by a receiver, a liquidator, a sheriff in seizing goods, in the enforcement of personal guarantees and other court proceedings. It would also have the opportunity, in this examinership model, to retain key staff, management and goodwill and use the existing customer base and contracts and seek to increase them, as well as keeping the assets. All of the advantages would be with the company that chose to enter into the process.

I fear the Bill would not retain the current advantages for the creditors of a business. In practice, creditors accept the examinership process as opposed to receivership or liquidation because they have some hope of getting something back. I would, therefore, like to see the examinership system used more. Deputy Stephen Donnelly's proposal would lessen the rights of creditors, which would be slightly unfair. In the past couple of years people talking about creditors are thinking of banks, the debt they are owed, the write-off received and wondering why they cannot get a write-off. Many creditors are suppliers of goods, other small businesses and sole traders. They are also ones we want to protect. It is very important, therefore, that a new model protect all rights. While it could make it easier for the company in trouble that could be viable with the right procedures, we cannot lessen the rights of creditors. These are other small businesses and if we lessen their rights, we will not achieve enough in this process. Examinership is a model that is generally beneficial to creditors and that will continue to be the case.

A problem arises if a creditor does not agree to the survival plan put forward by an examiner. The Bill would force creditors to initiate a court case if they objected to the plan. This would make it more difficult for creditors that have supplied goods and services to defend their interests. This would place an unfair onus on the creditor which could be a small business or a sole trader to take on the risk and the cost of a court challenge. The onus should remain on the company, through the examiner, to establish the case for the plan and have it independently judged and assessed. That independence is provided for in the court process. We could certainly reduce costs by taking this process out of the courts system, but we must retain some independence.

I welcome the Minister's intention and desire, mentioned tonight and on previous occasions, to establish a working group to examine the feasibility of allowing small private companies to initiate an application to be placed in examinership through an administrative procedure. That model could work best and may involve a combination of what is proposed in respect of the administrative panel. However, there must be independence in this matter. We cannot have creditors being forced into court to protect their interests. That would be going too far and unfair. That is my reading of the Bill and if I am wrong, Deputy Stephen Donnelly can correct me. It refers to where creditors would have to go to court to have the plan judged if they did not accept it. That is not fair.

See this speech in context