When a business fails, for whatever reason, the liquidation of the company should not be the only option considered. There is another option to be considered called examinership.
Businesses fail. It is a simple economic fact of trading.
When a business fails, for whatever reason, the liquidation of the company should not be the only option considered. There is another option to be considered called examinership.
What is the difference between liquidation and examinership?
Liquidation
Liquidation is the process of winding up (closing down) a company so that it no longer exists. In this process the company’s assets will be distributed to pay its debts.
Liquidation is available to a company regardless of whether there are sufficient assets to discharge debts and can be voluntarily or forced.
Examinership
Examinership is an alternative to liquidation. It is not always an option and there are tests a company has to meet to be successful in an examinership. We discuss these further in our Article on examinership but in short, they must show that they have a reasonable prospect of survival once they undergo this restructuring process.
in short, the main difference between liquidation and examinership is the end result. Liquidation is final in that the company will no longer be in existence.
Examinership, on the other hand, aims to restructure the company which should then emerge from the process as a leaner entity able to trade in a more efficient manner.
Is an examinership a better option than liquidation?
This question is one that turns on the facts of each individual business considering their options. Whilst examinership may suit some companies, it does not suit all and this comparison should be carried out for you with your advisors prior to entering either process.
Early advice and guidance is critical so that a company fully understands both options, the costs involved and indeed the likely outcome in both scenarios so that they can make an informed decision based on expert legal and accounting advice.
As a general rule, typically the result of an examinership should be that the restructuring leaves all parties i.e. shareholders, creditors etc in a better position than if the company went into liquidation.
If a company finds itself successfully exiting the process of examinership, the company will obviously also be able to then continue to trade and with that jobs will be saved.
What if a receiver has been threatened against the company?
If a receiver is threatened or indeed appointed against a company, examinership is still an available option. Immediate action is however required as there is a period of only 3 days to overturn the appointment of a receiver by applying for examinership.
Should you wish to discuss the above, please do not hesitate to contact us for further information.
Buying your first home in Ireland is one of the most exciting but complex financial decisions you will ever make. The legal process of buying property — known as conveyancing — is a critical part of that journey. This guide walks you through every stage, explains key stages and timelines, and gives practical tips that will save you stress (and money) and perhaps even the entire transaction.
Text LinkBuying your first home is one of the biggest financial and legal decisions you will ever make. In Ireland, rising house prices mean many first-time buyers struggle to bridge the gap between their mortgage, savings, and the price of a new home. To address this, the Irish Government introduced the First Home Scheme, a shared equity scheme designed to help first-time buyers and certain other purchasers buy a newly built home or self-build property.
Text LinkBeing involved in a road traffic accident can be a traumatic experience, leaving you with physical injuries, emotional distress, and financial uncertainty. If you were injured due to someone else’s negligence, you may be entitled to make a personal injury claim. At Cosgrove Gaynard Solicitors, we specialise in car accident and road traffic accident claims in Ireland, providing clear legal advice, strong representation, and a client-focused approach from start to finish.
Text LinkOur Dublin-based property solicitors provide clear, practical legal advice for residential and commercial property transactions. With extensive experience in Irish property law, we guide clients through the process efficiently, ensuring compliance with all legal requirements.
Text LinkCG Solicitors emphasise a personalised, hands-on service. We promote clear, transparent communication and practical solutions. Our communication style and commitment to communication are attractive for clients who want high-touch legal advice.
Text Link39 Waterloo Road,
Dublin 4
DX 109060 Fitzwilliam
Phone: 01 234 0044
Fax: 01 234 0047