Examinership is a process whereby the protection of the Court is obtained to assist the survival of a company. Essentially it allows a company to restructure with the approval of the Courts. The usual outcome of the process is that creditor balances are reduced, the assets of the company are protected, investment is obtained and the directors remain in control of the business during the examination process which is supervised by an expert practising accountant called the Examiner.

Examinership is an option available to an insolvent company that enables it to explore all opportunities to provide for its survival. It is a management friendly process that is inclusive of customers, creditors, suppliers and staff.

At Azets, we are leaders in the Examinership sector. With a success rate of over 90%, we have been involved in over 300 Examinership cases to date. Our service focusses on value, which is why there are no upfront fees.

For a company in financial difficulty, examinership provides:

  • Time
  • Protection from creditors
  • A framework to agree a compromise with creditors

Examinership is often the last throw of the dice for companies in difficulty. It is not an appropriate relief for all companies and is not appropriate in many situations.

It is possible that due to its technical nature the procedure is not very popular, but it is a very useful weapon in the armoury of the company in financial difficulties; the director seeking to protect their personal interests, the creditor seeking to maximise his return or the investor seeking reduced risk in their investment.

In investment situations where procuring warranties and indemnities from directors is problematic, an examiner may provide the certainty required to facilitate investment.

Given the advantages to all parties connected to a company in financial difficulty that comes through examinership successfully, it is a matter that should be considered with advice from experienced professionals at the earliest possible time.


We have been involved in over 300 Examinership cases to date

90% Success Rate

We have a success rate of over 90% of all the cases undertaken

Retail Experience

We are specialists in Examinerships for retail businesses, but we work with clients in any sector

Focus On Value

There is no requirement for upfront Examinership fees

The Examinership Process

The appointment of an examiner to companies in difficulty became possible following the emergency enactment of the Companies Act 1990. The examinership provisions arose as a result of the imminent collapse of the Goodman Group of companies, with the attendant catastrophic effect this would have had on the Irish beef industry in particular, and the spin-off effects it would have had on the economy as a whole with its agricultural basis at that time.

The Irish legislation reflects the pro-active self-help provisions of U.S. Chapter 11 type protection afforded to companies. In this regard, it is distinguished from the rather more onerous administration provisions of U.K. company law.

The activities of a company under the protection of the Courts are subject to the scrutiny of a Judge.

The system is almost self-regulating because with few accountants and solicitors operating within the area, their integrity as officers of the Court is of paramount importance. Where the assigned Judge finds that the highest standards have not been met by the company or the examiner or that there has been any failure by petitioners for the protection of the court to disclose all material facts the Courts have been unequivocal about removing the company from the protection formerly afforded to it.

At the very outset, this analysis does not purport to set out an exhaustive statement of the law or practice in examinerships, insolvency or corporate recovery.

It is meant to highlight certain circumstances whereby the owners and management of companies should consider the appointment of an examiner as potentially a positive step for both the company and it’s creditors, following a period of difficult trading conditions.

In the very short term, the appointment of an examiner to a company provides breathing space for the company, where normal corporate recovery measures are not available. The immediate advantage is the protection of the Court for the company against its creditors thereby enabling it to continue to trade and to attract investment on more favourable terms than would be the case where the threat of the immediate demise of the company is the only alternative.

In the medium to long term, the examinership process facilitates the company’s restructuring by making provision for investment and the sanction of the Courts to a scheme of arrangement with the creditors of the company.

Candidates for examinership?

There are two criteria for determining whether a company is a candidate for examinership; the first being satisfying the tests set out in the Companies Acts, the second being commercial considerations.

Statutory Provisions

At the outset, the company must be insolvent and unable to pay its debts in order to have an examiner appointed. It must also be able to demonstrate that it has a reasonable prospect of survival. In addition, no examiner can be appointed to a company if an official liquidator has been appointed, or where a receiver has been acting for a period longer than three days.

The statutory requirements can be summarised as follows:

1. The company commissions an independent expert’s report, who is typically an accountant. This report must contain certain specific information; most importantly that the company has a ‘reasonable prospect of survival’ as a going concern provided the examinership is successful, and that the likely result of the process would be more advantageous to the creditors than a winding up.

Further expansion on this crucial ‘reasonable prospect of survival’ point is required from the independent expert. Normally their report will point out that the company must secure investment sufficient to facilitate a compromise with its creditors, or scheme of arrangement, to be capable of survival.

2. The independent expert must confirm that there is no deficiency in the finances of the company that is not satisfactorily accounted for and that the company has sufficient funds to trade throughout the period of protection.

3. The independent accountant must supply the Court with the necessary cash flow projections and statements of affairs to vouch the conclusions drawn in his report.

Normally the directors or shareholders of a company petition the Courts to have an examiner appointed. However, creditors of the company, both actual and contingent (including the company’s employees) may also do so. In practice, it is rare for creditors of the company to have enough information about the affairs of the company to successfully petition to have an examiner appointed.

Commercial Considerations

Whether the company is likely to attract investment is the key factor having regard to the examinership option. Among some of the questions that should be considered to determine whether the company is likely to attract investment and is a candidate for examinership are as follows:

  • Is the company likely to survive in whole or in part as a going concern, or is the company ‘terminally insolvent’?
  • What are the assets of the company?
  • What are the liabilities of the company and how are these liabilities secured?
  • Are the assets of the company easily sold?
  • Are the assets of the company sufficiently large to justify the costs of examinership?
  • What is the staffing position of the company (number of staff and length of service) and what will their reaction be to the likely changes following examinership?
  • What is the regulatory position of the company including licenses, environmental matters, key customer audits, planning permissions, etc.
  • What is the level of outside investment required to formulate a scheme of arrangement to be put to the creditors?

The process to petition to have an examiner appointed is a rigorous one and care must be taken to ensure that all of the statutory tests are met. In addition, it can be a costly exercise and the company must be prepared to commit resources to discharge the costs associated with it.

The Protection Period

The protection of the Court is offered for a period of 70 days, which can be extended by application to the Court to 100 days and further in exceptional circumstances. Typically, the examiner assumes his role at a time of crisis and of great uncertainty for the company, its creditors and employees.

The statutory duty of the examiner is set out in the Companies Acts. It is to conduct an examination of the company’s affairs with a view to formulating proposals for a scheme of arrangement, for presentation to meetings of the company’s shareholders and creditors, for the ultimate approval of the Court.

Although independent of the directors, in practice however, a significant amount of the examiner’s time will be dedicated to working with the directors of the company to restore confidence in the company and it’s trade where this has been lost.

To enable a company to trade in the protection period the examiner must successfully manage an inclusive process involving the company’s key customers, suppliers, management and staff. The process is inclusive of all aspects of the company’s business and is ‘management friendly’ and in that regard, must be distinguished from the unilateral nature of receivership and liquidation.

The examiner will also immediately communicate with all creditors, customers and staff to explain the process and it’s effect on the company’s ongoing operations.

Certain creditors and staff will often react badly to the news of an examiner’s appointment. It is common for disgruntled creditors with claims for retention of title to move to repossess their property. The company resists these claims with the protection afforded by the Court, thus forming a sound platform for the examiner to sell assets and/or attract investment to provide for the survival of the company.

A key power of the examiner is to ‘certify’ ongoing expenses of suppliers, with the effect that should these suppliers continue to supply the company on credit during the protection period, their post-petition certified accounts will enjoy priority over all other creditors except a fixed charge holder, should the examinership process prove unsuccessful and the company be wound up.

The examiner must carefully monitor the cash flow of the company throughout the protection period to ensure the company trades in accordance with the projections furnished to the Court at the petition stage.

It is important to note that although the examiner has a right to access all books and records of the company and a right to attend all board meetings, the examiner does not usually usurp the executive function of the board of directors. For example, it is unusual for the examiner to become a signatory on the company’s bank account.

The Formulation of a Scheme of Arrangement

For the Scheme of Arrangement (“the Scheme”) to be successful the examiner must persuade at least one class of creditors to accept the Scheme before it can be brought before the Courts for approval.

In addition, he must ensure that all creditors within a class are treated the same way. The formulation of the scheme will usually cause some degree of discontent in at least one of the classes of creditors identified by the examiner.

The first task of the examiner is to divide the body of creditors into different classes. The formulation of the Scheme is the examiner’s attempt to share out a limited fund usually following some form of investment, between competing claims of different classes of creditors.

The typical Scheme will involve a secured creditor receiving all the funds owing to them, but sometimes by way of instalments and at times will involve some writing off of interest. The preferential creditors will usually receive a substantial dividend on foot of their liabilities whereas the unsecured creditors will generally receive much less.

The key to having the examiner’s proposals for a Scheme approved by the creditors is to formulate and present the Scheme in such a way that the creditors will secure a more advantageous outcome for themselves by endorsing the examiners proposals, than would be the case should the company be wound up.

A central part of the process is for the examiner to predict the likely attitude of the different classes of creditors to his proposals and formulate the Scheme accordingly. It is often the case that those creditors who vote against the examiner’s proposals feel that they have been unfairly prejudiced by the Scheme and that they would be in a more favourable position if the company went into liquidation.

Following the formulation of the Scheme it must be put to the vote of both a meeting of shareholders and creditors. Once the shareholders and creditors meetings have considered and voted on the Scheme the examiner must revert to the Court with a report on the outcome of the meetings and any modifications of the proposals adopted at the meetings.

This report is designed to indicate to the Court the views of the various classes of the company’s creditors. Obviously the Court will be inclined to approve a Scheme where it enjoys considerable support.

An examiner is permitted to formulate only those proposals which make it likely that the company will survive as a going concern, in whole or in part.

What is SCARP?

SCARP is a formal corporate rescue mechanism which was signed into law in Ireland on 7 December 2021 under the Companies (Rescue Process for Small and Micro Companies) Act 2021.

The primary objective of SCARP is to save small and micro companies and preserve employment in the underlying enterprise, similar to examinership. The introduction of SCARP has provided businesses with a viable, cost-effective restructuring option to deal with the many issues that persist: the legacy impact of the Covid-19 pandemic, inflationary cost pressures, supply chain issues, increased borrowing costs, to name just a few. SCARP is a more accessible and cost-effective alternative to examinership and allows businesses restructure their balance sheets within a shorter timeframe in a predominantly out-of-court environment.

Eligibility Criteria

SCARP is suited to companies which are about to be insolvent or are insolvent, but have a reasonable prospect of survival. In order to qualify to avail of SCARP, an applicant company must satisfy two of the following three criteria:

o Annual turnover of less than €12m;
o A balance sheet total of less than €6m;
o Average number of employees less than 50.

98% of all corporate bodies in Ireland will qualify under the above criteria, making this a very accessible restructuring tool for companies in difficulty.

Further restrictions are that SCARP is only available to companies where no resolution exists or no court order has been made for the winding up or liquidation of the eligible company. In addition, applicant companies must not have availed of SCARP or examinership within the previous five years. There can be no petition for examinership currently before a court and no examiner appointed to the company concerned.

Appointing a Process Adviser

As set out above, the SCARP legislation was brought in to make restructuring options more accessible and less expensive for small and micro enterprises. In this regard, the appointment of the person tasked with overseeing SCARP (a ‘process adviser’) takes place in the boardroom; there is no requirement to make an application to court like in an examinership.

The appointment of the process adviser takes place via a board resolution i.e., the board of directors of the company resolve to appoint a process adviser. Prior to the appointment taking place, there are certain pieces of information which are required to be provided by the directors of the company to the nominee process adviser. The primary document being the statutory statement of affairs for the company and financial information which is required for the process adviser to prepare their report. Based on all of this, the process adviser prepares their report on the affairs of the company and critically, whether in their view, it has a reasonable prospect of survival.

Within 7 days of the process adviser issuing their report to the company, accompanied by their determination on the prospects of survival for the company, the directors must hold the aforementioned meeting for the appointment of a process adviser.

The appointment of the process adviser takes immediate effect following the passing of the board resolution.

Process Timeline

Key Duties of Process Adviser

SCARP imposes a number of strict deadlines on the process adviser, which include notifying creditors and employees of the company within 5 days of their appointment. However, the primary duty of the process adviser is to formulate a rescue plan that enables the survival of the company which may include a write-down of the debts of the company. The process adviser is required to formulate this plan and issue notices meetings of members and creditors within 42 days of their appointment. The meetings of members and creditors are required to take place no later than day 49 of the process adviser’s appointment.

The process adviser will work to secure funding to enable the formulation of a rescue plan. This funding may come from a combination of any number of sources including: (i) fresh equity investment (ii) surplus cash flow (iii) new bank lending and / or (iv) sale of any non-core assets.

Having being engaged on a number of SCARP appointments to date and having acted as examiner in over 280 examinerships, Azets Ireland has a bank of potential investors and refinancing solutions available to companies in any restructuring process.

Creditor Opt-Out

Under the legislation, certain State creditors have the ability to opt-out of SCARP. These State creditors include the Revenue Commissioners, in respect of unpaid taxes, and the Department of Social Protection, in relation to sums previously paid to employees and claimed from the social insurance fund.

If these creditors opt-out of SCARP, this can create significant uncertainty for the company and any potential investor. It is our experience at Azets Ireland that these creditors have adopted a very supportive approach to companies availing of SCARP and are supporting rescue plans to date.

Approval of Rescue Plan

The process adviser is required under the legislation by day 49 of the process to have convened meetings of members and creditors for the purposes of considering the rescue plan formulated. The process adviser is required to provide 7-days’ notice to all members and creditors of the relevant meetings; therefore, the process adviser must issue the notices convening the meetings by day 42 of the process.

The rescue plan is a two-step process:

1. Firstly, the rescue plan must be approved by at least one class of impaired creditor (a class of creditor receiving less than the full value of their debt) where 60% in number of creditors voting, representing a majority (over 50%) of the debt vote in favour of the rescue plan; and

2. Secondly, there is a 21-day objection period after the process adviser has filed their notice of approval with the relevant court where any creditor can object to the rescue plan as formulated.

On expiry of the 21-day objection period, and where no objection has been lodged, the rescue plan is approved and becomes binding on all members and creditors of the relevant company, regardless of whether members or creditors voted to accept the rescue plan.

Onerous Contracts

Similar to examinership, SCARP provides for the repudiation of certain onerous contracts where the process adviser has determined that such contracts are particularly burdensome on the company and their continuation is negatively impacting on the company’s prospects of survival.

The repudiation can either take place by way of (i) court application or (ii) agreement with the relevant third party as to the claim for damages. In both scenarios, the claim for the damages will be included in any rescue plan as an unsecured debt. However, where the claim can be agreed without the requirement for court involvement, this will obviously be more cost effective and allow for a greater return to creditors rather than incurring the associated legal and professional fees which would arise in a court application.

The mechanism to repudiate any onerous contract is a vitally important tool in any restructuring and it has been regularly used to great effect in multi-unit retail restructurings where loss making units were required to be surrendered to landlords and the only mechanism to do so in a going concern trading scenario was by way of a repudiation application in an examinership. It is possible to disclaim onerous contracts in a liquidation but the distinction there is that to do so is not in a going concern scenario.

Examples of onerous contracts which typically arise in restructurings would include above market lease terms or a loss-making customer contract.

Key Considerations for Business Owners

Business owners and managers will face many challenges in the coming years. Some of the key considerations for business owners when contemplating a restructuring process such as SCARP include:

• Is there a good underlying business? – in order for any restructuring to succeed the underlying trade and business of the company must be sound. The company must have a reasonable prospect of survival and be capable of generating future profits if a restructuring takes place.

• What are my immediate pressures? – business owners must consider whether there are any immediate financial pressures. For example, is the bank seeking the appointment of a receiver to enforce their security? Is a leasing creditor threatening to take back one of its leased assets which are critical to the operation of the business? Has a supplier threatened to issue a winding up petition in respect of sums unpaid? Have payment terms been breached with Revenue for current or historical taxes? Has the business suffered bad debts to the extent that current cash-flow is at perilously low levels? Any of these immediate pressures may necessitate the appointment of a process adviser.

• Will I be able to breakeven during the rescue process? – as part of any restructuring it is key that the business will be in a position to discharge all ongoing liabilities as they fall due during the process so as not to worsen the position of creditors. The preparation of detailed cash flows demonstrating the funding available to the company during the rescue process will be key to this. In the absence of being able to be cash positive or neutral, a commitment will be required to shore up any deficit that arises.

• How will I be able to exit the process and fund a rescue plan? – given the short timeframe of the process, it is imperative, but not essential, that business owners have a clear line of sight in terms of how they intend to fund a rescue plan and ultimately successfully exit the rescue process. A pool of funds will be required in order to fund any rescue plan, pay the costs of the process and discharge dividends to creditors.

Court Engagement

In the majority of SCARPs there will be little to no involvement from the Court in the process. For example, there is no requirement to seek formal court approval of any rescue plan provided no creditors object within the 21-day cooling off period that follows the creditors meetings.

In limited circumstance there may be a requirement to engage with the Court, for example:

• To seek Court direction on any matter that may arise during the tenure of the process e.g., serving notice of SCARP on creditors in foreign jurisdictions;
• Seeking a stay on creditor enforcement actions including receivership appointments;
• To repudiate onerous contracts, if agreement cannot be reached with counterparties to the contract.

In the event there is an objection to a rescue plan lodged by a creditor within the 21-day cooling off period, there will be a requirement for a Court hearing. During this time, the 70-day SCARP timeframe is paused i.e. 'the clock is stopped' until the hearing of the objection has taken place.

Comparing SCARP vs Examinership



Initiated by Director Resolution

Court petition to appoint an Examiner

SME or Micro Company only

No restrictions apply

Meetings must be held by day 49

Must have returned to Court with the outcome of meetings by day 100

State Creditors can choose to ‘Opt Out’

All Creditors are bound by the process

Rescue plan must be approved by 60% in number and majority in value of those creditors represented at the meeting

Simple majority in one class of impaired in-the-money creditor and majority in number

Less likely for Directors to lose control

Some risk of losing control – potential enforced regime change

If creditors accept the scheme, no court approval is required, as long as no creditor objects

Court approval is still required even if creditors approve the Scheme proposed by the Examiner

Lower costs due to less professional advisors involved and quicker timeframe

Likely to be more costly


In conclusion, SCARP is a viable restructuring tool for small and micro companies in Ireland. It is our experience at Azets that the process works. It allows for companies to restructure their affairs within a very short period of time and is a powerful tool in the armoury of business owners which can transform the balance sheet of a company in distress.

More importantly, the process will save viable enterprises and their underlying employment from liquidation and closure which would result in further losses to creditors and the State.

In short, SCARP is a restructuring option which should be fully explored prior to any decision being made to cease to trade or go into liquidation.

How can Azets assist?

Azets is a multi-disciplinary firm best known for specialising in formal corporate recovery matters, specifically examinership and more recently in SCARP. Our firm has acted in over 280 examinerships over the past 20 years and has acted in over 50% of the SCARPs undertaken to date. Our focus is unashamedly on working to help owner-managed, entrepreneurial and family-owned businesses. That experience provides us with a unique insight into both the legislation around restructuring, which we are very familiar with, and importantly, the practical application of same.

Our team of restructuring experts have unrivalled experience in saving enterprises, with 4 process advisers undertaking SCARP appointments within our ranks and each of those process advisers having presided over successful SCARP cases. Over 98% of corporate bodies in Ireland meet the criteria for the appointment of a process adviser; we believe it has significantly altered the landscape in making restructuring more accessible for small and micro sized businesses.

Our restructuring team have extensive turnaround experience in examinership and SCARPs across a wide range of industries. We can assist by:

• Offering objective business advice including a range of solutions to turnaround a business in distress outside of a formal insolvency process;

• Reviewing business viability and determining whether the company has a reasonable prospect of survival;

• Acting as Process Adviser and assisting the company with creditor negotiations, engagement with potential financiers and the development of a rescue plan;

• Acting as adviser to any creditor whose debt is being included in a SCARP.

Please contact us for a free, no-obligation and confidential consultation to see how we can help your company survive a period of uncertainty.

It’s in our DNA to save viable businesses.

Examinership Client Case Studies

A reputable building contractor with a history of successfully working on large-scale building projects for over 30 years was engaged on six projects at the time Court protection was sought, a number of which related to the provision of social housing units.

The issues faced by the company were:

1. Low gross profit margin in a very competitive market
2. Disputed claim on a project
3. Losses on investment in development lands
4. Unsustainable level of secured debt

The key risk for the company when entering the examinership process was the cancellation of contracts by clients as a result of the application for Court protection. Work had already ceased on a number of the sites due to the uncertainty surrounding the company’s future. However, the appointed Examiner, Mr Neil Hughes, was successful in negotiating with the company’s clients to ensure the continued operation of all viable contracts which the company was engaged on. This was subject to securing investment and the approval of a scheme of arrangement by the High Court. By eliminating onerous and loss-making contracts, the company was better positioned to focus on existing profitable contracts while also actively seeking to secure further work.

The examiner was successful in obtaining new investment and formulating a scheme of arrangement which was approved by the High Court, resulting in 24 jobs being saved while also agreeing a settlement in relation to the secured debt. This ensured the company returned to work on viable ongoing projects which is now allowing for the completion of much-needed social housing units.

This retailer operated from seven shopping centre units and traded profitably for many years before becoming loss making following the onset of recession.

The critical issue faced by the company was being tied into long term upwards only onerous leases at far above market terms. All other variable costs of the business were successfully reduced in line with turnover by the directors but the company was unable to reduce its main overhead; rent.

The company entered Examinership and the weakest trading store was immediately closed. Negotiations took place with other landlords using the framework of the Examinership and reductions of between 50 – 80% were achieved. The reductions were sufficient of themselves to turn around the company’s fortunes and render the company profitable.

A cash business, the company operated at a surplus during the protection period and utilised that surplus to fund a scheme of arrangement for all creditors. The company emerged debt free following the 100 day process with six stores still trading and 25 jobs intact.

This group of companies consisted of two trading companies and two holding companies. The trade of the companies was a mechanical engineering company and the installation of pre-insulated and pre-pack panels of ducting. The two other companies in the group acted as shareholder for the group and with the other holding intellectual property rights for its products.

The companies traded profitably for a number of years up until 2016 when it started to experience difficulties. As with any contracting company the loss on specific contracts precipitated the companies’ insolvency. Other issues faced by the company were:

  1. Cash flow problems
  2. Threat of winding up orders from trade creditors insurers
  3. Delay in securing investment
  4. Loss of key management

The key risk for the companies when entering the examinership process was the loss or cancellation of contracts as a result of seeking the protection of the Court. However, the appointed Examiner, Mr Neil Hughes, was successful in negotiating with the companies’ clients to ensure the continued operation of all contracts the companies were engaged on with the exception of one. This contract was onerous and loss making and as a result of the scaling back of this contract during the examinership the companies were able to focus their resources on more profitable contracts to ensure the survival of the companies.

The examiner was successful in obtaining new investment and formulating a scheme of arrangement which resulted in the saving of over 70 jobs in the West of Ireland.

This Company was involved in the operation of hotel, night club and bar in County Wicklow. The Company’s business commenced in 1984 and the hotel traded profitably for a number of years.

However, the following difficulties for the company became very apparent:

  1. Difficulties in the hotel sector as a whole, including over supply of hotel rooms as a result of tax incentives in the sector
  2. Management issues
  3. Significant contingent liabilities as a result of third party claims against the Company

The company became insolvent and entered Examinership in. Neil Hughes Examiner at Baker Tilly was appointed examiner to the company.

Over the course of the 100 day protection process, new investment was secured for the company from the existing directors. The Company reduced its costs, secured a tax clearance certificate and returned to profitability.

The company emerged from Examinership after reaching agreement with its creditors to pay them a 10% dividend on their debts. The Revenue Commissioners were paid 20% in full and final settlement of arrears.

The scheme was approved by the High Court and the company exited the process with 45 jobs intact and all historic creditors fully discharged through the scheme of arrangement.

We are ready to help

With 230 colleagues and 4 offices in Dublin, Enniscorthy and Waterford, Azets is part of a team of 7,500 talented, smart people across our international office network. Offering a personal, local approach to supporting Irish businesses, if you’re looking for peace of mind, expert advice and more time, we’re ready to help.


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