The Office of the Director of Corporate Enforcement (ODCE) recently issued a statement outlining the implications of the COVID-19 pandemic on its insolvency-related functions. In particular, the statement provided an update on how the ODCE will assess the actions of directors of companies which have gone into an insolvent liquidation as a consequence of the COVID-19 pandemic.
Where companies enter insolvent liquidation over the coming months, the ODCE will have due regard to the impacts of the COVID-19 pandemic as it carries out its functions of examining, and adjudicating upon, liquidators’ reports. In that context, the ODCE will expect liquidators to have examined, and which the ODCE will itself have regard to, will include:
The ODCE have also further stated that, while it reviews the facts and circumstances of each individual case and cannot provide prescriptive guidelines, provided that directors’ decisions and judgements were:
it is unlikely that the ODCE will consider that the company directors concerned should be restricted.
Finally, the statement reiterates Revenue’s position that any declaration made as part of an application for the COVID-19 Temporary Wage Subsidy Scheme is not a declaration of insolvency. Company directors should be cognisant of this when reviewing a company’s financial position and their duties as directors.
If you wish to find out more about any aspect of the above or wish to seek professional advice about restructuring or winding up a business, please do not hesitate to contact our restructuring and insolvency team for a confidential consultation.