Court Review of Personal Insolvency Arrangement Jane Marshall

Court Review of Personal Insolvency Arrangement Jane Marshall April 2016

Legal References § Personal Insolvency (Amendment) Act 2015 – Section 21 inserts section 115 A into 2012 Act § Circuit Court Rules (Personal Insolvency) 2015 S. I. 506/2015 – Rule 29 A and Forms 52 I and 52 J § Rules of the Superior Courts (Personal Insolvency) 2015 S. I. 507/2015 – Rule 21 A and Forms 58 and 59

Court Review of PIA § PIA affects Relevant Debt – Secured on PPR § PIA "Not Approved“ – at creditors' meeting or – deemed approved under 108(8)(a) or – by sole creditor under section 111 A

Application to Court § PIP may apply to Court for confirmation of a PIA – within 14 days after creditors’ meeting – if instructed in writing by the debtor – if he considers there are “reasonable grounds” – on notice to the debtor, ISI and each creditor

Protective Certificate § Protection continues until review completed § No need to apply for extension once review commenced

Notice of Motion – Form 52 I § Record Number from application for protective certificate § Includes certain essential statements § Essential documents attached § Signed by PIP § Issued by relevant Court office § Hearing date at least 21 days from date of issue § Sent by PIP to the debtor, ISI and each creditor within 4 days

Form 52 I– Essential Statements § The grounds for application – Relevant Debt included in PIA – PIA was not approved – At least one class of creditor approved PIA § Identified by reference to Form 52 J § Reasons why creditors should be considered a class

More Essential Statements § Statement by the PIP that in his opinion – Debtor satisfies eligibility criteria – Proposed PIA complies with s 99(2) – PIA does not release or affect excluded or excludable debts (where consent not given) § Additional notice to creditors – that a creditor can notify the Court of approval or objection, giving reasons

Documents to be Attached § Written instruction from debtor § Proposed PIA § Report which accompanied PIA § Certificate of votes cast – Form 52 J

Form 52 J - Table 1 § Certificate of votes cast at meeting specifying – Total debt § Percentage of votes in favour and against – Total secured debt § Percentage of votes in favour and against – Total unsecured debt § Percentage of votes in favour and against

Form 52 J - Table 2 § List of all creditors who voted for the PIA – Nature and value of debt to each creditor – Proposed class for each creditor – Percentage of total debt voted § List of all creditors who voted against the PIA – Nature and value of debt to each creditor – Percentage of total debt voted

Form 52 J - Table 2 OR § Statement that sole creditor notified nonapproval

Creditor Response § A creditor lodging a notice in Court – should specify his reasons for support or objection – send a copy to § the ISI § the PIP § each other creditor

Essential Proofs § Court must be satisfied that: – Eligibility criteria satisfied – Mandatory parts of s 99 complied with – PIA does not affect excluded and excludable debt (where consent not given) – Grounds for objection (section 120) do not apply to debtor and PIA § Certificates and Statements of PIP may be accepted as evidence

Further Proofs – Provide if necessary § Court must be satisfied that: – PIA is compliant re PPR (section 104) – Reasonable prospect that PIA will: § enable debtor avoid bankruptcy § enable creditors to recover to extent debtor’s means reasonably permit § enable debtor to retain PPR § cost of retaining PPR not disproportionate

Further Proofs – Provide if necessary § Court must be satisfied that: – debtor reasonably likely to comply with PIA – PIA is fair and equitable to each class of creditor that has not approved PIA – PIA is not unfairly prejudicial to any interested party – at least one class of creditors has approved by 50% in value - other than where there is only one creditor

Court’s Discretion - provide evidence if necessary § When considering, Court shall have regard to – debtor’s attempts to meet his debts – creditor’s conduct in seeking to recover – within 2 years prior to Protective Certificate § Where submitted to court by secured creditor – submission or indication of preference by secured creditor and the date when made – alternative recovery options open to a creditor

Court Hearing § Hearing – with “ all due expedition” – hearing date on notice to ISI, PIP and creditors

The Decision of the Court § Registrar notifies ISI and PIP where Court makes or refuses an order § If order made: ISI to register the PIA and PIA comes into force § Any other appropriate order, including for costs

Classes of Creditors § Creditors with interests or claims of similar nature § May include only 1 creditor § Court to have regard to circumstances of case including statement of grounds, number and composition of creditors who voted § Proportion of overall debts represented by the creditors

Typical Classes § PPR lender § Other secured lenders § Unsecured lenders – interest bearing claims § “Preferential”/Excludable debt § Unsecured/trade creditors

Additional Classes § Landlords § Leasing /Hire Purchase § Contingent creditors § Connected creditors § Others?

Court Review of Personal Insolvency Arrangement Jane Marshall January 2016