Examinership must be overhauled to allow an administrative process be established to ensure viable businesses are saved in a post Covid economy, a Fine Gael TD has said.
Richard Burton, Chairperson of the Fine Gael Parliamentary Party, said, “Examinership is a process which shelters a viable business while it can work out a restructuring arrangement with its landlord and its creditors. In Ireland, it can only be done through the High Court and it is prohibitively expensive, costing about €100,000.
“The result is few businesses avail of it. It is estimated that in the UK, five times more viable businesses in trading difficulties are rescued through examinership than in Ireland. This is bad in normal times but disastrous in the face of the Covid crisis.
“As the economy opens, and the temporary breaks on rents, bank payments and tax come to an end, there is a real risk that a substantial number of viable businesses will close with serious loss of jobs. Once gone it is far harder to replace those jobs. Creditors and suppliers are left high and dry. Workers are put on the dole. Revenue gets nothing The owner sees their creation destroyed and will struggle to start again with a negative credit rating. There are no winners.
“While I welcome the commitment made to me in the Dail to reform the process, I fear that the slow process of drafting and passing new legislation will arrive too late for the many jobs now under threat.
“Government needs to consider an administrative process under which reasonable arrangements could be worked out to save businesses with a solid future. This won’t be perfect and it depends on voluntary cooperation, but it is needed as part of the range of emergency measures to live with Covid”, Deputy Bruton concluded.