MINISTER of State for Skills and Further Education and Limerick TD Niall Collins has welcomed planned legislation which will assist and support the smallest businesses in Ireland to restructure and remain trading.
While Ireland’s current rescue framework, examinership, is internationally recognised and successful in its own right, the associated costs mean it may be beyond the reach of small and micro enterprises.
Minister Collins’ party colleague and Minister for Trade Promotion, Digital and Company Regulation, Robert Troy TD is bringing legislation to the Dáil – Small Company Administrative Rescue Process (SCARP) – which will be a simplified restructuring process for viable small companies that is timely and cost effective.
The new process seeks to mirror key elements of examinership in an administrative context thereby reducing court oversight resulting in efficiencies and lower comparable costs. It has limited court involvement where creditors are engaged in the process and positively disposed to a rescue plan. Minister Troy is planning to enact the Bill as soon as possible in order to immediately support small businesses and protect jobs.
Minister Collins commented, “We are acutely aware of the impact of the pandemic on business and the enormous pressure business owners continue to face, not only in terms of their immediate liquidity, but also the sustainability of their business in the future. My colleague, Minister Troy has spearheaded work to address this and the Bill ensures that small and micro companies now have access to an alternative framework – the Small Company Administrative Rescue Process (SCARP).
“The administrative rescue process includes key provisions mirroring those in examinership including the repudiation of onerous contracts, application for a stay on proceedings, and cross-class cram down of debts, and encourages ongoing creditor engagement. This will therefore allow for greater efficiencies and lower comparable costs.”
The Limerick Minister added: “Delivering this Bill is reflective of Fianna Fáil’s continued commitment to our small company sector and the jobs it supports.”
