Joe McHugh (Donegal North East, Fine Gael)
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Question 103: To ask the Minister for Enterprise, Trade and Innovation if he will make a comprehensive statement on assets liquidation; the payment process to creditors; the order in which various creditor organisations are paid that is banks, Revenue Commissioners, contractors and so on. [46642/10]

Batt O'Keeffe (Cork North West, Fianna Fail)
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The order of preferential payments in the winding up of a company is set out at section 285 of the Companies Act 1963 as amended. Monies owed to the Revenue Commissioners are preferred to a significant degree over other debts. The priority of creditors in a winding up is as follows:

1. In accordance with section 16 of the Social Welfare (Consolidation) Act, 1993, the sums deducted by an employer from the employee's remuneration in respect of PRSI are not included in the assets of a company and do not form part of the funds available for distribution to creditors. The position of the Revenue Commissioners in relation to these deductions has been described as super-preferential as their claim in relation to these monies supersedes the claim of all preferred creditors to the extent that the monies due are taken before the assessment of the assets for distribution.

2. The Revenue Commissioners in respect of PAYE, VAT and in respect of monies recovered from the holder of a charge, which includes a fixed charge over book debts.

3. Creditors secured by a pledge, lien, mortgage or fixed charge in respect of assets the subject of such security.

4. Creditors whose debts are preferential payments under s 285 of the Companies Act 1963, as amended, and other complementary legislation which prioritises creditors, include the following:

i. Local Authorities for unpaid rates

ii. The Revenue Commissioners for Corporation tax on profits and capital gains

iii. The Revenue Commissioners for assessed VAT

iv. The Revenue Commissioners for assessed Income tax of employees to be deducted at source (PAYE)

v. The remaining priorities relate to employee entitlements.

The application of these statutory preferences to any individual case, including to any asset liquidation or payment processes arising under any individual case, will be determined by the circumstances of each particular case, and as such is a matter for the parties involved, and for legal advice or the courts if applicable.