Irish Life and Permanent PLC -v- Companies Acts [2009] IEHC 567 (21 December 2009)

Irish Life and Permanent PLC -v- Companies Acts [2009] IEHC 567 (21 December 2009)

The other reserve, arising from the scheme of arrangement and required by accounting standards to appear in new ILP's accounts, must be treated as a realised profit for the purposes of section 45, as it cannot logically be treated as capital and does less injustice to first principles than any other approach.

Citation
[2009] IEHC 567
Parties
Applicant: Irish Life and Permanent PLC; Notice Party/respondent: Shareholder (unnamed)
Jurisdiction
Ireland
Judgment Date
21 December 2009
Procedural Posture
Application Under Companies Acts / Judgment on Preliminary Legal Issue
Outcome
Declaration granted: the other reserve is a realised profit for the purposes of section 45.
Legal Topics
Scheme of Arrangement, Profit Definition, Distributable Reserves, Accounting Standards
Company Law Accountancy Law Scheme of Arrangement Profit Definition Distributable Reserves Accounting Standards

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Parties

Irish Life and Permanent PLC

Applicant

Shareholder (unnamed)

Notice Party/respondent

Procedural Posture

Application Under Companies Acts / Judgment on Preliminary Legal Issue

Legal Issues

  1. 1 Whether the 'other reserve' arising in new ILP's accounts under a scheme of arrangement constitutes a realised profit for the purposes of section 45 of the Companies (Amendment) Act 1983

Ratio Decidendi

The other reserve, arising from the scheme of arrangement and required by accounting standards to appear in new ILP's accounts, must be treated as a realised profit for the purposes of section 45, as it cannot logically be treated as capital and does less injustice to first principles than any other approach.

Court Disposition

Declaration granted: the other reserve is a realised profit for the purposes of section 45.

Orders

  • The other reserve in new ILP's accounts is a realised profit capable of distribution under section 45 of the Companies (Amendment) Act 1983.