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ODCE and the Companies Act One Year on

ODCE and the Companies Act One Year on. Kevin Prendergast Head of Enforcement, ODCE. Insolvency. Key change is introduction of restriction and disqualification undertakings Removes need to attend High Court Lowers costs Reduces burden on courts Reduces stress for directors. Undertakings.

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ODCE and the Companies Act One Year on

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  1. ODCE and the Companies Act One Year on Kevin Prendergast Head of Enforcement, ODCE

  2. Insolvency • Key change is introduction of restriction and disqualification undertakings • Removes need to attend High Court • Lowers costs • Reduces burden on courts • Reduces stress for directors

  3. Undertakings • Restriction • Office reviews liquidators report • Will typically offer undertaking where it believes it appropriate • Will set out reasons • 21 days to revert with signed undertaking • Liquidator not relieved, court process will start within 2 months

  4. Undertakings • Commenced in latter half of 2015 • More than half immediately accepted • c20% rejected • The rest still under consideration • Some teething issues, such as problems with service etc.

  5. Undertakings • To date no disqualification undertakings offered • Hope to see increased utilisation during 2016

  6. Insolvency • Overall, capital requirements have increased to €100,000 for ordinary company restrictions and 500,000 for plc’s • Relief can now be sought at any time. One relief sought after over 4 years. In particular circumstances not opposed

  7. Examinership • ODCE must now get a copy of all Examiners’ Reports • Subject to review to assess conduct of directors • Are taking action shortly to ensure that all reports are in fact submitted to us • To date no major issues arising

  8. Public interest winding up • None so far • Threshold of “public interest” relatively high based on UK jurisprudence • Will be a significant cost/resources impact when undertaken

  9. Enforcement • Main offences and tools carried over • Offence of financial statements failing to give a true and fair view seems to be self-correcting • Summary Approvals Procedure seems to be very useful for some actions, e.g. financial assistance for share purchase • Not so for others e.g. directors loans

  10. Other judicial developments • Significant Court of Appeal judgement • DCE v Walsh & Ors, disqualification action by the Office under what was s160(2)(h) CA 1990, now s842(h) CA 2014, company struck off with debts owing • High Court declined to disqualify on basis of general economic downturn, lack of qualifications of directors, scale of enterprise, past behaviour • Court of Appeal judgement in January 2016

  11. Other judicial developments • Key aspects of judgement • “Financial maelstrom” does not change nature of the law • Scale of enterprise and qualifications of directors are irrelevant • Other past behaviour irrelevant • Passive directors cannot be exonerated on that basis, all director expected to take steps to secure compliance

  12. Enforcement strategy • Move towards prosecution on indictment continuing • Forensic accountants hired • A small number of large cases being pursued • A number of files have gone to the DPP this year • Anglo trial to commence in October, • Further trials scheduled

  13. Thank You Further Information is available from www. odce. ie

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