Companies Act 2014

F315[Relevant court’s power to stay proceedings or restrain further proceedings

558N

558N. (1) This section applies where a process adviser is appointed in respect of an eligible company.

(2) Where the relevant court is satisfied that, having regard to the report prepared under section 558D and such other matters as it sees fit, there is a reasonable prospect of the survival of the eligible company, and the whole or any part of its undertaking, as a going concern, it may, on the application of any of the persons specified in subsection (3)

(a) stay all proceedings or restrain any further proceedings against the eligible company for the relevant period on such terms as seem just, or

(b) order that the provisions set out in subsection (4), or such other provision as the relevant court may specify, shall have effect in relation to the eligible company for the relevant period.

(3) The persons referred to in subsection (2) are—

(a) the eligible company,

(b) the directors of the eligible company, and

(c) the process adviser.

(4) The provisions referred to in subsection (2)(b) are as follows, namely:

(a) no proceedings for the winding up of the eligible company may be commenced or resolution for winding up passed in relation to the company and any resolution so passed shall have no effect;

(b) no receiver over any part of the property or undertaking of the eligible company shall be appointed or, if a receiver has been so appointed before the appointment of the process adviser in respect of the company, the receiver shall, subject to any order under section 558M, cease to act;

(c) no attachment, sequestration, distress or execution shall be put into force against the property or effects of the eligible company, except with the consent of the process adviser;

(d) where any claim against the eligible company is secured by a mortgage, charge, lien or other encumbrance or a pledge of, on or affecting the whole or any part of the property, effects or income of the company, no action may be taken to realise the whole or any part of that security, except with the consent of the process adviser;

(e) no steps may be taken to repossess goods in the eligible company’s possession under any hire-purchase agreement (within the meaning of section 558ZV), except with the consent of the process adviser;

(f) where, by or under any enactment, rule of law or otherwise, any person other than the eligible company is liable to pay all or any part of the debts of the company—

(i) no attachment, sequestration, distress or execution shall be put into force against the property or effects of such person in respect of the debts of the eligible company, and

(ii) no proceedings of any sort may be commenced against such person in respect of the debts of the eligible company;

(g) no order for relief shall be made under section 212 against the eligible company in respect of complaints as to the conduct of the affairs of the company or the exercise of the powers of the directors—

(i) prior to the passing of the resolution appointing the process adviser in respect of the eligible company, or

(ii) on or after the passing of such resolution;

(h) no proceedings for the appointment of an examiner to the eligible company may be brought.

(5) An application under subsection (2) shall be made on notice to all interested parties and other persons directly affected.

(6) The relevant court shall not stay or restrain proceedings or make an order under subsection (2) without having afforded each creditor of the eligible company who has indicated to the court his or her desire to be heard in the matter an opportunity to be so heard.

(7) In this section, "relevant period", in relation to an eligible company, means—

(a) the rescue period, or

(b) such other period as the relevant court sees fit.]

Annotations:

Amendments:

F315

Inserted (7.12.2021) by Companies (Rescue Process for Small and Micro Companies) Act 2021 (30/2021), s. 3, S.I. No. 673 of 2021.