Professor Irene Lynch Fannon:

This is a complex matter that is in some way tangentially relevant to the issue of preferential creditors, which is the subject matter of the proposed Bill. With regard to the kind of transaction that is being described, these are transactions that take place in the period before an insolvency that seek to gain advantages for particular creditors. There are rafts of provisions in our Companies Act that seek to address particular types of transactions, including the creation of last-minute floating charges. Our period of time is six months, in certain circumstances, and then that is extended to 12 months where the floating charge is created in favour of connected persons.

As Mr. Egan pointed out, however, we considered, if you like, the hard rule that is created within those statutory limitations so that if we have such a very specific period, it is possible to manipulate the period, which I think is what is being described here. I say "I think" because I am not particularly familiar with the documentation that is being discussed. That is what I am taking from what has been said.

We made a recommendation that in certain circumstances, where these periods seem to have been manipulated, the court might have the discretion to apply the core of the provision without attention to the specific time limitation. However, this is again a range of recommendations we made with regard to these kinds of last-minute transactions.

The harmonisation of insolvency law in Europe has already been mentioned by the representative from Eurofound. There is a new draft directive coming from Europe that seeks to harmonise some aspects of insolvency law, which can be very technical across different member states. However, the issue of transactions that seek to deprive creditors of the assets of the company or put the assets of the company beyond the reach of creditors is one of the core subject matters of that directive.