Ms Tara Keane:

I will respond on liquidation first. In the design of SCARP, one of the fundamental tests of the process is the best interest of creditors test. It has to be proved that creditors will receive more through SCARP than they will through liquidation. I appreciate that for the business that is going through SCARP, it would be an attractive proposition to say it does not need that test. However, the Department is conscious of the fact that when we talk about creditors we are often talking about other small and micro companies. We did not want to put in place a process that protected the viability of a vulnerable firm, potentially at the expense of one that was not experiencing difficulties. In company law, we are always looking at a delicate balance of stakeholders. Everything we do on one side has a trickle down effect. I totally appreciate from the perspective of the business in SCARP that it might make sense, but the Department would be concerned about unintended consequences if we were to take on a measure like that - potentially we could put more firms at risk in the long run - and the fairness underpinning the process.

If it is better for the creditors for the company to be wound up, that company is not really viable. If it cannot even meet that, should we be giving these people another chance? It could potentially create that sort of zombie company effect, where artificially propped-up companies prohibit other actors from getting in and participating.