Re: M.D.Y. Construction Ltd. [2018] IEHC 676 (05 December 2018)

Re: M.D.Y. Construction Ltd. [2018] IEHC 676 (05 December 2018)

The examiner discharged the onus of proof that the proposals are fair and equitable, not unfairly prejudicial, and the company has a reasonable prospect of survival as a going concern. The objections did not evidence improper conduct or irrational commercial judgment. The scheme provides a better outcome for unsecured creditors than liquidation, and the urgency and risk to contracts justify confirmation.

Citation
[2018] IEHC 676
Parties
Company: M. D. Y. Construction Limited; Examiner: Neil Hughes; Investor: KM Lynskey Construction Services Ltd; Secured Creditor: Everyday Finance DAC; Unsecured Creditor/objector: KCC Civil Engineering Ltd; Unsecured Creditor/objector: Sean Smyth Construction; Contract Claimant: Kildare County Council; Contract Claimant: Wicklow County Council; Shareholder/objector: Ortelo Holdings Ltd
Jurisdiction
Ireland
Judgment Date
05 December 2018
Procedural Posture
Examinership Confirmation Application / Judgment on Confirmation of Scheme of Arrangement Under S.541 Companies Act 2014
Outcome
Proposals for scheme of arrangement confirmed under s.541 Companies Act 2014.
Legal Topics
Examinership, Scheme of Arrangement, Creditor Rights, Fairness and Equity, Commercial Judgment, Survival of Company
Insolvency Company Law Examinership Scheme of Arrangement Creditor Rights Fairness and Equity Commercial Judgment Survival of Company

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Parties

M. D. Y. Construction Limited

Company

Neil Hughes

Examiner

KM Lynskey Construction Services Ltd

Investor

Everyday Finance DAC

Secured Creditor

KCC Civil Engineering Ltd

Unsecured Creditor/objector

Sean Smyth Construction

Unsecured Creditor/objector

Kildare County Council

Contract Claimant

Wicklow County Council

Contract Claimant

Ortelo Holdings Ltd

Shareholder/objector

Procedural Posture

Examinership Confirmation Application / Judgment on Confirmation of Scheme of Arrangement Under S.541 Companies Act 2014

Legal Issues

  1. 1 Whether the proposals for a scheme of arrangement are unfairly prejudicial to creditors under s.541(4)(b) Companies Act 2014
  2. 2 Whether the company has a reasonable prospect of survival as a going concern post-examinership
  3. 3 Whether the examiner exercised proper commercial judgment in selection of investor and formulation of proposals

Ratio Decidendi

The examiner discharged the onus of proof that the proposals are fair and equitable, not unfairly prejudicial, and the company has a reasonable prospect of survival as a going concern. The objections did not evidence improper conduct or irrational commercial judgment. The scheme provides a better outcome for unsecured creditors than liquidation, and the urgency and risk to contracts justify confirmation.

Court Disposition

Proposals for scheme of arrangement confirmed under s.541 Companies Act 2014.

Orders

  • Confirmation of scheme of arrangement as presented on 9 November 2018.
  • Shares in company cancelled and new shares issued to investor.