REALWorld Law

Real estate finance

Non-insolvency procedures

Are there any schemes or arrangements which can be implemented in relation to a debtor company or business which is in financial difficulties (other than insolvency proceedings)? How do they affect the rights of a lender with security?



Part 9 Schemes

Schemes of arrangement pursuant to Part 9 of the 2014 Act (“Part 9 Scheme”) exist under Irish law. A Part 9 Sscheme is a court-supervised process whereby a scheme is proposed by a company with its creditors or members which typically involves arrangements for reduced payments to creditors. Part 9 Scheme provisions are largely identical to the English scheme of arrangement provisions contained in Part 26 of the Companies Act 2006.


The principal procedure in Ireland in relation to the rescue/restructuring of Irish incorporated companies is the “examinership” process. An Irish company (or indeed its directors, creditors and shareholders holding at least 10% of the company’s paid-up voting share capital) may petition the High Court to appoint an examiner in circumstances where that company is unable (or is likely to be unable) to pay its debts but where there is a reasonable prospect of the survival of the company and the whole or part of its undertaking as a going concern..

On his appointment, the examiner (who is typically an accountant) will enquire into the affairs of the company, seek fresh investment and look to formulate a scheme of arrangement between the company and its members and creditors. Reference to a scheme or arrangement prepared in the context of an examinership is different from a Part 9 Scheme.

The scheme of arrangement must be approved by (1) majority of the voting classes of creditors whose interests or claims would be impaired by the scheme of arrangement have accepted them, provided that at least one of those creditor classes is a class of secured creditors or is senior to the class of ordinary unsecured creditors or (2) where 1 is not met, at least one voting class of creditor whose interest would be impaired by the scheme of arrangement and who would be an “in the money creditor” in a liquidation has voted in favour of the scheme of arrangement. In practice, it is the later provision which is relied upon most commonly.

If approved in accordance with the foregoing, the examiner can place his scheme before the High Court for approval.

During the period while an examiner is enquiring into the affairs of a company a moratorium prevents secured creditors from enforcing their security without the consent of the court. This does not apply to set off.


In 2021 a new administrative procedure for small and micro companies, colloquially referred to as SCARP was introduced. Under the SCARP process, a process adviser is appointed to a company with a view to trying to facilitate the company’s survival by restructuring its debts and seeking new investment. Unlike examinership, there is no automatic moratorium on enforcement but an application can be made to the court to seek that a moratorium is applied.