The European Union (Preventive Restructuring) Regulations 2022 (SI 380/2022) (“PRD”) commenced on 27th July 2022. The Corporate Enforcement Authority (“CEA”) has produced a helpful Information Note to assist company directors in understanding certain aspects of the Regulations, i.e., those aspects having a particular bearing on directors’ duties and responsibilities.
Information Note has been prepared with a view to assisting company directors to understand:
- the importance of maintaining adequate accounting records,
- what is meant by a company being in financial difficulty, being unable to pay its debts and being insolvent respectively,
- specific aspects of company directors’ duties where a company is in financial difficulty, and
- the potential consequences of non-compliance with company directors’ duties.
The Information Note also:
- provides a series of easy to understand indicators that can help to identify whether a situation might be developing in which a company will experience difficulties in paying its debts,
- sets out certain key steps that company directors can take to ensure, on an ongoing basis, that they are aware of a company’s financial position, and
- details the various restructuring options open to companies and their directors where financial difficulties are being experienced. These include SCARP and examinership.
It is recommended that directors of companies to whom the PRD applies should carefully consider seeking professional advice at the earliest appropriate opportunity. For more information click here
NB: The content of this article is provided for information purposes only and does not constitute legal or other advice.
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