Written answers

Wednesday, 28 November 2007

Department of Enterprise, Trade and Employment

Company Liquidation

8:00 pm

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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Question 183: To ask the Minister for Enterprise, Trade and Employment the consequences for business of the Laffoy Judgment (details supplied) which suggests that the Director of Corporate Enforcement, rather than creditors should bring actions under section 251 of the Companies Act 1990 to deal with companies that have been struck off the register involuntarily and have not been liquidated properly; and if he will make a statement on the matter. [31480/07]

Photo of John McGuinnessJohn McGuinness (Carlow-Kilkenny, Fianna Fail)
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I understand that the judgement given in the case cited by the Deputy does not constrain the rights of creditors generally to seek to bring actions under Section 251 of the Companies Act, 1990. Rather, it provided clarification on the circumstances in which the Courts will consider granting orders to creditors under the relevant Section. In this case, it would appear that the applicant company was unsuccessful in convincing the Court that it met the requirements to entitle it to the particular Order sought under the relevant section. In particular the judgement stated that the company failed to demonstrate that a benefit would accrue to it by the granting of the Order. In these circumstances, it would not appear that the case has adverse implications for business generally.

Similarly, I do not believe that the judgement has any substantive implications for the work of the Director of Corporate Enforcement. Under the Companies Acts, the Director has a wide range of investigative and enforcement powers available to him, including recourse to Section 251 where appropriate. It is a matter for the Director to determine how to exercise these powers in any particular case that comes to his attention. In this regard, the Director continues to actively pursue breaches of the Companies Acts, including a number of successful actions for the disqualification of the directors of insolvent companies.

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