Vol 20 (2023) - Issue 5

Article preview

First Successful Creditor Application for Appointment of an Inspector to an Irish Corporate Sets Precedent for Future Appointments

Synopsis
The recent success of a creditor to have an inspector appointed to an Irish company sets a precedent for possible future appointments. The two judgments delivered by the Irish High Court in this case review in detail both the appointment considerations and how to deal with the aftermath of the inspector's report. For creditors of insolvent Irish corporates, the inspector appointment route offers an alternative avenue to the appointment of a liquidator.
Within Part 13 of the Companies Act 2014 (the 'Act') are provisions for the appointment of an inspector to investigate into the affairs of a company.
The Act provides that such an appointment can be made on the application of the Corporate Enforcement Authority (the 'CEA') (Section 748 of the Act) and other parties, including the company, certain members, a director or a creditor (Section 747 of the Act). All applications to date have been made and inspectors appointed pursuant to Section 748 which provides for an application by the CEA.
However, the recent case of Re WFS Forestry Ireland Limited (the 'Company') is the first recorded application by a creditor in the Irish High Court pursuant to Section 747 of the Act.
This may be a seminal moment in the jurisprudence on appointment of inspectors in Ireland and could become a more frequently adopted route for creditors to have an inspector appointed to go under the hood of a company. This may become of most relevance where a creditor does not have the financial means to petition to have a liquidator appointed to the company. As we will see in this article, it may also have consequences for the public purse strings as the State is liable for the fees of the inspector at the first instance.