— CORPORATE RECOVERY AND INSOLVENCY

Examinerships

Under the 2015 Companies Act, a Petition for the appointment of an Examiner may be presented to Court via the Cyprus Insolvency Services:

  • The company; or
  • The directors of the company; or
  • A creditor, including a contingent or prospective creditor (including an employee), of the company; or
  • Shareholders holding not less than one-tenth of shares carrying the power to vote at general meetings as of the time of presentation of the Petition.

Once an Examiner is appointed to a Company, the Company is under the protection of the Court whilst the Examiner formulates a Scheme of Arrangement with the Company’s Creditors. For a company to be suitable for Examinership, the Court has to be satisfied that the company, and the whole or any part of its undertaking, would have a reasonable prospect of survival (is either viable, or can be made viable).

The Examiner has the following powers:

  • The Examiner has the same rights and powers which an auditor has in relation to the supplying of information and co-operation.
  • The Examiner has the power to convene, set an agenda for and preside at meetings of the board of directors and general meetings and to propose motions or resolutions.
  • The Examiner is entitled to reasonable notice of, to attend and be heard at all meetings of the board of directors and all general meetings.
  • The Act provides that the Examiner may certify liabilities of the company incurred during the protection period. Liabilities so certified are treated as expenses properly incurred under the Act.

Director’s Powers:

Unlike liquidations or receivership, the directors remain responsible for the day-to-day management of the company. The principal task of the Examiner is to “examine” company’s affairs and formulate a compromise or scheme of arrangement. In practice, the Examiner will work closely with the directors to re-assure creditors, employees and staff.

If the Examinership is not successful, then the Company will be placed into liquidation. In such an event, it is possible that the company’s financiers may appoint a Receiver.

How can we Help

  • Advise on the suitability of Examinership
  • Act as the Examiner

It will be our pleasure to have a personalised consultation with you, so feel free to contact us.

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