It is the process of winding-up solvent companies that have come to the end of their useful life. As the company is solvent the appointment is controlled by the shareholders (i.e. Members) as opposed to the Creditors who control appointment in an insolvent Creditors’ Voluntary Liquidation. Before finalising the winding-up, the liquidator will complete all statutory requirements, discharge outstanding liabilities and distribute any remaining assets (cash, property, intercompany loans etc) to the shareholders.

Whether as a standalone MVL, or as part of a wider group simplification project, benefits include:

• Risk — reduce risk in relation to potential unknown contingent claims. Eliminate the danger of an inactive company being involuntarily struck off which can result in the loss of a company’s limited liability protection. Reduce group and financial complexity thereby minimising the risk of financial accounting errors, omissions, misstatement, fraud or loss of ‘corporate memory’.
• Cost — remove unnecessary annual compliance costs and regulatory burden allowing management to focus on the core business
• Tax efficiency — return surplus capital in a tax efficient manner to shareholders

The process involves the insolvent winding up of a company by an independent liquidator on a voluntary basis. The process is ‘voluntary’ in the sense that it is the Directors that conclude that the company should be wound up and they call the necessary meetings (as opposed to a creditor petitioning the Court on an involuntary basis). As there will be a deficit in funds available, the creditors have the final say in relation to which liquidator is appointed hence the ‘creditors’ name. The relevant statutory provisions are set out in Part 11 of the Irish Companies Act 2014.

A Receiver is appointed by a secured creditor (usually a bank) when lending to the Company is in default. The Receiver’s role involves realising the security for the benefit of the charge holder.

Examinership is a formal corporate restructuring process providing protection from creditor enforcement to insolvent but viable companies to facilitate the restructuring of distressed balance sheets through a court approved scheme of arrangement. The aim is to return the company to a firm financial footing thereby avoiding liquidation and emerging from the process to continue trading as a going concern, preserving goodwill, protecting jobs and maximising returns for creditors. The relevant statutory provisions are set out in Part 10 of the Irish Companies Act 2014.

The Small Companies Administrative Rescue Process is a corporate rescue process that is available to insolvent but viable SMEs. The process is similar to Examinership but with less Court involvement. Evelyn Partners team has extensive restructuring experience across a range of sectors helping viable companies to continue trading as going concerns thereby preserving goodwill, protecting jobs and maximising returns for creditors.

Corporate debt restructuring is usually done to avoid a business becoming bankrupt. A business’s debts to various lenders and creditors are reorganised into a more viable and efficient debt structure.