Robert Troy (Longford-Westmeath, Fianna Fail) | Oireachtas source

The State's longstanding preventative restructuring framework, examinership, is internationally recognised and has proven to be a successful tool for restructuring in its current form. However, the impact of Covid-19 on business has necessitated a review of the existing restructuring process, provided for by the Companies Act 2014, to determine whether it meets the needs of businesses as they respond to the economic impact of the pandemic.

It has generally been acknowledged that small companies encounter particular challenges in availing of examinership. The associated costs pose a significant barrier to access. Covid-19 continues to disrupt economic activity and may eventually give rise to increased numbers of companies in difficulty. While there will be companies among that cohort which should be properly wound up and cease trading, there will also be many companies with viable business models that are capable of being rescued. Small companies employ in the region of 788,000 people across the country, and contribute significantly to our economy. It is in our economic interest that those companies which are fundamentally viable have an opportunity to restructure and access an appropriate rescue process. The programme for Government contains a commitment in this regard.

For these reasons, in July 2020 the CLRG was requested to consider the issue of rescue for small business as a priority. The CLRG is a statutory advisory body charged with advising the Minister for Enterprise, Trade and Employment on matters relating to company law. Its membership is broad and representative of key stakeholders in the area, such as Irish Small and Medium Employers, ISME, the Irish Business Employers Confederation, IBEC, the Irish Congress of Trade Unions, ICTU, the Revenue Commissioners, insolvency and legal practitioners and regulators, making it uniquely well-positioned to provide an informed view on the matter. The CLRG completed its work within an accelerated timeframe, reporting back on 24 October 2020, as acknowledged by Deputy O'Dea. The report sets out a number of policy options for a proposed new process for the rescue of small companies, a summary rescue process which would be distinct from the existing statutory examinership process.

The issue of company rescue extends far beyond the distressed company and impacts on all creditors, which are often other small companies. Any new framework must reflect the delicate balance between sometimes competing stakeholders and provide sufficiently robust safeguards for the protection of creditors, in particular, employees and other small companies. I am acutely aware of the difficulties faced by small companies in our country and I am fully committed to progressing legislation to support their long-term viability and preserve employment. The recommendations contained within the CLRG report have been under active consideration by the officials in my Department. They have made proposals to me on responding to the report and progressing any necessary legislation as soon as is practical. My aim is to have the legislation in place by summer at the latest and ideally, as Deputy O'Dea mentioned, before the supports currently in place cease to be in operation.

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