Small Firm Rescue Process
The Irish government has designed a new small firm rescue process, which mirrors the existing examinership framework. The new process is simple and fast, and it aims to reduce costs and increase efficiencies. It also allows creditors to be part of the rescue plan and reduces the likelihood of the company entering into liquidation. However, this approach will only work if it is accessible to small firms and micro companies.
The Irish process is based on the examinership model, which has been in place since 2004. It aims to minimize the amount of court oversight and reduce the comparable costs for the entire process. The Irish process also encourages ongoing engagement with creditors, and the company can apply for a stay of proceedings if it finds it impossible to meet its payments. In addition, it seeks to ensure that the rescue process is cost-efficient, and that the company is restructured as quickly as possible.
A new process is being introduced in Ireland for small firms. The Companies scarp ireland (Rescue Process for Small and Micro Companies) Bill 2021 has passed all stages in the Oireachtas, paving the way for a dedicated rescue process. This process will mirror the existing examinership in Ireland, but with greater flexibility for companies in the process. This process will be accessible to smaller firms, but will still be a valuable tool.
Small Firm Rescue Process Mirrors Examinership in Ireland
This process is a step-by-step procedure. Unlike the examination process, the SCARP aims to reduce court oversight and costs and promote ongoing engagement with creditors. The process will be faster and more efficient, and will end with an agreement on the terms and conditions of the company’s future. The Companies Act Amendments will strengthen the rights of employees during liquidations, and will allow the rescue to proceed faster and more effectively.
The SCARP will mirror the examinership process in Ireland. The SCARP can be used by companies with a balance sheet total of less than EUR6 million. The SCARP will be cheaper and more effective than an examinership, but a company must be insolvent before it can be rescued. It is also a better alternative than bankruptcy. The SCARP can be an excellent option for small firms facing liquidation.
SCARP mirrors examinership in Ireland and is more efficient and less expensive than an examinership. It will take longer than an examinership, but it can be extended for an additional 150 days if a company has a high level of debt. SCARP is a short process, so it will save time and money. Ultimately, it will help a company with a small company’s problems.
