Court Review of Personal Insolvency Arrangement Jane Marshall April 2016

Legal References Personal Insolvency (Amendment) Act 2015 Section 21 inserts section 115A into 2012 Act Circuit Court Rules (Personal Insolvency) 2015 S.I. 506/2015 Rule 29A and Forms 52I and 52J Rules of the Superior Courts (Personal Insolvency) 2015 S.I. 507/2015 Rule 21A 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 111A

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 52I 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 52I– 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 52J 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 s99(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 52J

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

Form 52J - 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

Form 52J - Table 2 OR Statement that sole creditor notified non-approval

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 s99 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