Laura Ashley Administration – What Is Administration and Could It Be An Option For You?

Laura Ashley, the first in a long line of Examinerships and Administrations?

Administration, Examinership and the Coronavirus

Earlier this week, Laura Ashley became the first headline casualty of the Covid 19 / Coronavirus pandemic. The way this has been reported may cause you some confusion if you are a business owner. Both the Financial Times and Irish Times described the firm as “falling” into administration. As will be seen below, a company does not have to “fall” into Administration. It can be, and frequently is, a well thought out and considered decision on the part of the directors/shareholders of a distressed company. With the current economic climate following the Coronavirus outbreak, it seems likely that an explosion of Administrations/Examinerships is imminent.

In respect of the Laura Ashley Administration, the focus of nearly all reporting has been on the risks to jobs. This of course, is wholly understandable. There are undoubtedly risks to jobs, and that is a huge concern. However, the risk to jobs arises from the possible collapse of the company. If the company collapses, those jobs are lost forever. If the company can be saved through Administration, then some jobs may be saved. That’s an important point that appears to be largely overlooked in the media reporting

As Penneys, Brown Thomas, Arnotts and more announce store closures, questions are soon going arise about the viability of these companies and whether they are solvent or insolvent. The question of “book insolvency” (which arises where most people would consider a company “solvent” but strictly speaking on its books/accounts it’s not) may become particularly relevant.

Further, while it is clear that an air of goodwill generally abounds around Ireland at the moment, depending on how long this crisis continues, this may not necessarily continue to be the case. Companies which owe over €10,000 to one debtor or €20,000 to a group of debtors may find themselves exposed to applications to wind up their company over the coming months and may need to consider Examinership as a way to handle their present balance sheet insolvency rather than be subjected to an application to wind up by a disgruntled creditor/supplier


A source of confusion in the Irish context is that a search of the Companies Act 2014 (the primary piece of legislation governing the running of a company in Ireland) for “administration”  and  “administrator” reveals zero results. Why? There is no such thing as Administration under Irish Company Law. The Irish equivalent of Administration, is Examinership. Examinership has been a part of the Irish company law landscape for a long time, but has been resorted to relatively few times compared to Receivership and Liquidation. Generally, therefore, our experience shows that most businesses know relatively little about the Examinership process.


Obviously it depends on the individual circumstances of each case, however, in our view if your business is struggling, but you think it can survive, and you want it to survive, then it’s certainly something that should be considered. That is the whole purpose of the process:

“the entire purpose is to make it possible to rescue companies in difficulty” – Fennelly J in Re Gallium Ltd [2009]

Examinership is only available if the company is insolvent and there is a possibility of survival. If you believe your company ticks those two boxes then it’s worth considering. If it is something that you are considering, our advice would be that you make contact with us urgently. As will be seen below, in order to seek the protection of the Court under Examinership, an extensive Independent Expert’s Report is required. Given the current climate and the extreme pressures on business it is essential to ensure that you can get this expert report finalised as soon as possible. This will make it possible for your company to petition the Court for protection under Examinership before a receiver is appointed or an application to wind up your company is made.

Most Examinerships which make the headlines and newspaper inches tend to be in respect of very large companies which have had very large implosions. But there is nothing which dictates this has to be the case. The common perception that Examinership is for large companies only is not correct. Examinership is not just an option for large companies/groups of companies. It can be just as beneficial to a small or medium sized company, and perhaps even more so in the current and post-Covid19 reality

Ogier Leman has extensive experience in acting for Companies, Examiners (both are typically legally represented throughout the process) and 3rd party funders who are funding Examinerships. For example we acted on behalf of the 3rd party funder in the Examinership of the Sammon Group when that company was placed into Examinership following the collapse of Carillon Group in 2018/2019.


The Examiner is an independent party appointed by the Court (either Circuit Court or High Court depending on the size of the company) when a company is, for the want of a better expression “experiencing financial difficulties.”

The appointment of an Examiner therefore allows a company to continue to trade with the benefit of Court protection (discussed below) even though it may be insolvent. It is a prerequisite that there is a real possibility of the company surviving and generally it will have to have solid foundations and a business model which justifies it allowing to trade. Allowing a company enter examinership also protects jobs, being those of the Company’s employees at least in the short term.

Once a company is under Examinership, it comes under the protection of the Court for a period of 70 days (which can be extended for a further 30 days, in certain circumstances). While under the protection of the Court no creditor can take any action to enforce any judgments or security against the company. Equally importantly no creditor can take any steps or act to wind up the company or have a receiver appointed over its assets for the duration of the Examinership.


Examinership Key Points


Once appointed, the Examiner will investigate the affairs of the company and must, within 70 days of his appointment, prepare a “scheme of arrangement“, i.e. a proposal, to help ensure the survival of the company. That scheme of arrangement must be agreed/approved, and the details approval process are discussed further below. Typically, a proposed Scheme of Arrangement will include measures such as:

  • A requirement that a portion of the company’s debt is written off;
  • A requirement that the company is permitted to repay its debts over a longer period of time;
  • The forced termination of onerous contracts;
  • The forced surrender/termination of property leases;
  • An injection of capital into the company by a third party in exchange for a shareholding; and/or
  • The investment of further monies into the company by an existing shareholder.



  • The examiner must place a notice of his appointment in 2 daily newspapers within 2 days, notify the CRO within 3 days and publish the details of their appointment in Iris Oifigiúil within 21 days.
  • The primary role of an examiner is to formulate a proposal for a compromise or scheme of arrangement in relation to the company, its creditors and members, and to report to the Court on the viability of the company.
  • The Scheme of Arrangement is put to the shareholders and different classes of creditors – it will be deemed to be accepted by the creditors if passed by a majority in number and value of any class.
  • Once the Examiner’s proposals have been voted upon by the members and creditors, he will then report to the court on the outcome of those meetings, and if the Scheme of Arrangement has been accepted, a hearing date is set for the Court to consider it.
  • At the hearing, any creditor or member whose claim or interest would be impaired if the proposals were implemented, may appear and be heard.
  • The Court has discretion to approve the Scheme of Arrangement or approve subject to certain amendments/modifications or it can reject the Scheme of Arrangement.
  • If the Scheme of Arrangement is approved by the Court, the Court will fix a date for implementation, which will not be later than 21 days from the date of its approval – section 524(3) of CA 2014.
  • The implementation date will be the date the company comes out of court protection and the role of the examiner will cease on this date.
  • The Scheme of Arrangement, approved by the Court, is binding on the company, its members and creditors, even those members and creditors who have not approved the proposals.
  • If the Court rejects the Scheme of Arrangement formulated by the Examiner, it can make such order as it deems fit, which includes an order to wind up the company


 The legal process begins with a petition presented to the High Court/Circuit Court. The application is made on an “ex-parte” basis which means that nobody has to be notified in advance that the application is being made.

A petition for Examinership can be presented by

  1. The Company;
  2. The Directors;
  3. Any secured, unsecured, contingent or prospective creditor (including an employee); or
  4. Members representing 10% or more of paid-up capital of the company.

On hearing the petition, the Court, if satisfied that Examinership may be appropriate, will often place the company in interim examinership. This is particularly common if the Company expresses a concern that the goodwill may be impacted if not placed under Court protection. The Court will list a return date for a hearing to confirm the examiners appointment.



1. The Company is insolvent i.e. is or is likely to be “unable to pay its debts”.

Under the Companies Act 2014, a company will be unable to pay its debts if:

  • It is unable to pay its debts as they fall due; or
  • The value of its assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities (i.e. the balance sheet test); or
  • A statutory demand for a debt issued by a creditor under the provisions of the Companies Act 2014 remains unsatisfied for a period in excess of 3 weeks;

Solvency, Insolvency & A Company’s Options

If a company is solvent then an examinership is not appropriate, and the company needs to consider are:

  • Member’s voluntary winding up; or
  • Receivership (where one asset is in distress / default).

If a company is insolvent and there is possibility of survival, the options are:

  • Examinership (Court appointed Examiner); or
  • Voluntary scheme of arrangement (like a scheme of arrangement under the examinership, but this is agreed directly between a company and its creditors).

If a company is insolvent and no possibility of survival, the options are:

  • Creditors liquidation; or
  • Compulsory Winding Up – Court appointed liquidator.

The Independent Expert’s Report

To determine if insolvent, the Company must get an independent expert’s report (typically an accountant). This report is typically very details and must show (with supporting information)

  1. that the company is insolvent;
  2. that there is a ‘reasonable prospect of survival’ as a going concern provided the Examinership is successful; and
  3. that the likely result of the process would be more advantageous to the creditors than a winding up.

The report must confirm that there is no deficiency in the finances of the company that is not satisfactorily accounted for and that the company has sufficient funds to trade throughout the period of protection. Frequently this is only possible if a 3rd party funder provides a letter of support and comfort and agrees to finance the period of Examinership.

The Independent Expert must provide the Court with the necessary cash flow projections and statements of affairs to vouch the conclusions drawn in their report.

2.There has been no resolution or court order to wind up the company;

3. A receiver has not been appointed to the company for a continuous period of 3 days or more.

This means that even where a receiver is appointed, the company, if it considers itself to be a suitable candidate for Examinership, can still make an Examinership application within the 3 day period following that receiver’s appointment.

4. The Court will only appoint an Examiner to the company where that company (and the whole or any part of its undertaking) has a reasonable prospect of survival as a going concern.

Where it is appropriate to do so, and where it may have a bearing on the survival of a company, the Court may also appoint an Examiner to an associated or related company and may grant that Examiner all of the same powers that he has over the first company.


The Companies (Miscellaneous Provisions) Act 2013 introduced a new regime for “small companies” enabling them to apply directly to the Circuit Court for the appointment of an examiner whereas prior to the Act their only option was to apply to the High Court. In order to avail of this new regime, companies are required to satisfy two of the following three conditions:

  • The value of the company must not exceed €4.4million;
  • The company’s turnover must not exceed €8.8million; and
  • The company must have no more than 50 employees.

If you have any questions or queries in relation to Examinership, Receivership or Liquidation please get in touch with either Brian Conroy or Ronan McGoldrick, your points of contact on the Leman Financial Services Disputes team. We have worked closely with a number of the country’s leading Examiners and on all sides of the Examinership process. Our experience ranges in dealing with small family runs SMEs to large multinational corporations.

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