Companies Act – Company Reconstruction Regulations published

In exercise of the powers conferred by article 329B of the Companies Act, the Minister for the Economy, Investment and Small Businesses, has issued the Companies Act (Company Reconstructions Fund) Regulations, 2020.

The aim of these regulations is to create and regulate the administration of a  fund  intended  to  facilitate  company  recovery procedures  instituted in accordance  with article  329B  of  the Companies Act.

Functions

There shall  be a  fund to  be  known  as the  Company Recovery  Fund out of  which  payments  shall be  made  to  Special Controllers appointed in accordance with article 329B of the Act as may be paid out of the Fund in accordance with these regulations.

Financing

The Fund shall receive from the Agency the amount of five hundred thousand euro (€500, 000) annually, or such lesser amount in terms of the proviso to this regulation, to cover the expenses related to its purpose under these regulations:

Provided that the Fund shall not at any time have at its disposal sums exceeding the aforementioned amount.

The Official Receiver shall, without prejudice to any other power or function conferred on him by these regulations or by any other law, act in accordance with any procedures established by the Agency, to:

(a)  establish  and  maintain,  in  consultations  with  the Agency, arrangements for the making of payments to Special Controllers in accordance with these regulations;

(b)  certify claims  for  compensation by  Special Controllers admitted in accordance with these regulations.

Maintenance of list of Special Controllers

The Official Receiver shall keep an updated list of persons admitted in accordance with regulation 7 to act as Special Controllers, which shall be made available to the Registrar of Courts.

Application to be admitted to the list Special Controllers

Any person having the requisites  to  act as a  Special Controller in accordance with article 329B of the Act shall apply to the Official  Receiver in the prescribed  form,  or in  such  form  as  the Official  Receiver  accepts,  submitting a curriculum  vitae and  all documentation  required  by  the  Official  Receiver  in  order  to  be admitted to the list held for the purposes of article 329B.

Disqualification

A person shall not be qualified for appointment as Special Controller in accordance with these regulations if:

(a)  he  is  interdicted  or  incapacitated  or  is  an undischarged bankrupt;

(b)  he has been convicted of any of the crimes affecting public trust or of theft or of fraud or of knowingly receiving property obtained by theft or fraud, provided that the period for disqualification shall be in terms of the limits mentioned in sub-article (1) of article 142 of the Act;

(c)  he is subject to a disqualification order under article 320 of the Act;

(d)  during the time he has been a director or a secretary of a company, he has breached the provisions of this Act for the third consecutive time in a period of two (2) years to be reckoned from the first breach;

Cap. 373.

(e)  he has been convicted of any of the offences under the Prevention of Money Laundering Act;

(f)  he does  not  possess  a  minimum  of  five  (5)  years proven experience in the administration of companies; or

(g)  he does not possess a  minimum of two  (2)  years of proven  experience  in the administration  of companies and a bachelor’s degree or equivalent from a recognised university.

Remuneration and expenses recoverable from the Fund

The  remuneration  and  expenses  of  a  Special Controller in accordance with these regulations shall be paid from the Fund in respect of the period of appointment established in accordance with article 329B(1)(d) up to a maximum of:

(a)  two  thousand  five  hundred  euro  (€2,500)  as remuneration for the original period;

(b)  one  thousand five hundred euro  (€1,500)  as remuneration for the first extension; and

(c)  one thousand euro (€1,000) as remuneration for the second extension.

Expenses that are deemed necessary for the continuation of  the  Company  Recovery  Procedure,  considering  the  particular circumstances of each case, up to a maximum of five thousand euro (€5,000) may be paid from the Fund.

The maximum cumulative amount claimed from the fund in accordance with  paragraphs  1  and  2  in  respect  of  each  recovery procedure shall not exceed ten thousand euro (€10,000).

The amounts referred to in this regulation are inclusive of value-added tax.

The limits mentioned in this paragraph may be increased by the Official Receiver acting upon a recommendation of the Court, in complex cases, or cases involving cross-border elements.

Procedure with regards to claim.

A claim to be paid in accordance with regulation 9 shall be submitted to the Official Receiver together with all supporting documentation as may be required by the Official Receiver.

The Special Controller may submit a claim in accordance with sub-regulation (1) at any time during the recovery procedure or within twelve (12) months from the order of the court terminating the recovery procedure.

The   Official   Receiver may require additional documentation or information in relation to any claim.

The Official Receiver shall pay claims from the Fund in accordance with these regulations, as he deems appropriate and in terms of any directions given by the Agency, regard being had to the circumstances of the case and nature of the claim.