David Stanton (Cork East, Fine Gael) | Oireachtas source

I thank the witnesses for answering the questions. In his introduction, Mr. Duffy referred to the specific scenario to address the separation of assets and operations of the two separate corporate entities with the operating company subsequently entering insolvent liquidation. There seems to be a connection between the two in that moving the assets out of the company leads to insolvency. That is the kind of scenario we are dealing with but is it not true that many companies move assets around all the time with no impact and no perceived or foreseen impact on employees or on the operational side of the company?

Ms Cahill said that section 608 of the Companies Act confers power on a court to order the return of assets that have been improperly transferred. There is also reference to the transfer having the fraudulent effect of leaving inadequate resources to discharge the entitlements of the employees who are subsequently made redundant. I come back to what I asked earlier about the use of courts in this process. Someone has to adjudicate as to whether fraud was perpetrated and whether there was a cause and effect intended between the removal of assets and the subsequent insolvent liquidation of a company. The report also notes that the defence of such an application could include a director's statement prepared at the time of the transaction to show that the employer was in a position to discharge all accrued employee entitlements after the transfer. The witnesses can correct me if I am wrong but we are talking here about an intention to defraud. Is that the nub of the issue we are debating? Do the courts have the powers and can they decide a lot of this?

I was taken with what Ms Cahill said about the lack of use of the courts. She mentioned twice the issue of the cost of the legal proceedings being a factor that must be taken into account. She also said that the State could take over that particular role and perhaps cover the legal costs. I ask her to comment on that scenario.