|Liam Carney||Nollaig Murphy|
The Irish Companies (Amendment) Act 1990 (the Examiner Act) introduced a regime whereby a number of interested parties can petition the High Court to appoint an examiner to a company. The company, its directors, any creditor or any shareholder holding 10% or more of its share capital may make the petition. The petition may be made in respect of an insolvent or near-insolvent Irish incorporated company, with a view to putting in place a scheme of arrangement that will allow the company to continue trading. This option has concerned financiers because, if exercised, it can result in a scheme that writes down the company's debt to the financier without the financier's consent.
The number of petitions presented to the High Court under the Examiner Act has risen significantly during the current economic crisis. Solvency difficulties faced by development companies in particular have resulted in the courts exploring in some detail the components of a "genuine trade" that should benefit from Examiner Act protections. Often, development companies have few direct employees as work is contracted to builders and a professional team. In Re Vantive Holdings  IEHC 384 and Laragan Developments  IEHC 390, the deciding judges noted that the preservation of a real enterprise and real jobs are key in considering any examinership petition, and that the purpose of the examinership process is not to save shareholders from the consequences of having invested in a failed enterprise. Ultimately, in both cases the High Court declined to appoint an examiner, supporting the view that the protections resulting from an appointment were not appropriate where the company to which the petition relates has few or no employees.
Tax relief for intangible assets
Ireland offers a favourable tax regime for the location of companies whose businesses rely on intellectual property (IP) rights. The incumbent scheme for tax relief on the acquisition of a wide range of intangible assets (including traditional IP) has recently been amended by the Finance Act 2010 (the 2010 Act). The 2010 Act has amended the list of specified intangible assets to which the regime extends. These include an amended definition for computer software and a broader know-how category (by the addition of trade secrets). Certain other beneficial changes have been enacted in relation to clawback of allowances and impairment charges relating to intangible assets.
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