Michel Mc Loughlin [Pharmacy] Ltd & Anor -v- Companies Acts [2011] IEHC 28 (28 January 2011)

Michel Mc Loughlin [Pharmacy] Ltd & Anor -v- Companies Acts [2011] IEHC 28 (28 January 2011)

The court does not have jurisdiction to approve an examiner immunity clause in a scheme of arrangement under the Companies (Amendment) Act 1990, and even if such jurisdiction existed, it would only be appropriate in wholly exceptional circumstances not present here. The scheme's treatment of the Revenue...

Source-derived case information.

Citation
[2011] IEHC 28
Parties
Applicant: Michael McLoughlin (Pharmacy) Limited; Applicant: Sundrive Pharmacy Limited; Objector: Bank of Scotland; Objector: Revenue Commissioners; Interested Party: Examiner
Jurisdiction
Ireland
Judgment Date
28 January 2011
Procedural Posture
Confirmation of Schemes of Arrangement Under Companies (amendment) Act 1990 / Confirmation Hearing
Outcome
schemes of arrangement confirmed subject to amendments
Legal Topics
Examinership, Schemes of Arrangement, Exclusion Clauses, Creditor Priority, Unfair Prejudice
Corporate Insolvency Company Law Examinership Schemes of Arrangement Exclusion Clauses Creditor Priority Unfair Prejudice

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Parties

Michael McLoughlin (Pharmacy) Limited

Applicant

Sundrive Pharmacy Limited

Applicant

Bank of Scotland

Objector

Revenue Commissioners

Objector

Examiner

Interested Party

Procedural Posture

Confirmation of Schemes of Arrangement Under Companies (amendment) Act 1990 / Confirmation Hearing

Legal Issues

  1. 1 Whether the court has jurisdiction to approve an examiner immunity clause in a scheme of arrangement
  2. 2 Whether the treatment of Revenue Commissioners' s.438 claim in the scheme is unfairly prejudicial

Ratio Decidendi

The court does not have jurisdiction to approve an examiner immunity clause in a scheme of arrangement under the Companies (Amendment) Act 1990, and even if such jurisdiction existed, it would only be appropriate in wholly exceptional circumstances not present here. The scheme's treatment of the Revenue Commissioners' s.438 claim was unfairly prejudicial as it placed them at a disadvantage compared to other unsecured creditors, and amendments were required to give the Revenue priority out of the residual debt fund up to the percentage paid to other unsecured creditors.

Court Disposition

schemes of arrangement confirmed subject to amendments

Orders

  • Delete examiner immunity clauses from schemes of arrangement
  • Amend schemes to give Revenue Commissioners priority payment from residual debt fund up to 10% equivalent to other unsecured creditors