Speaking this afternoon, Sinn Féin Spokesperson on Enterprise, Trade, and Employment, Louise O’Reilly TD, said that the new small company administrative rescue process must be quicker and cheaper than the current administrative process in order for it to work.
Teachta O’Reilly said:
“There is unified agreement that there has long been a need for an examinership-lite model as is attempted to be delivered through the Companies (Small Company Administrative Rescue Process) Bill 2021.
“This Bill, while long overdue, is welcome and I will work constructively and thoroughly to ensure that there are no undue delays in implementing it.
“There are many welcome aspects laid out in the General Scheme of the legislation which outlines the new small company administrative rescue process. However, the success or failure of the process will boil down to two things – speed and cost.
“The new process must be not only cheaper than the current administrative process which is estimated to cost on average between €80,000 – €120,000, but it also must be quicker.
“It is hoped that the new process will reduce costs to between €20,000 – €50,000, which is an extremely welcome reduction in costs if that is achieved, however, these costs are only estimates and in practice they could be higher. Regardless, they still look prohibitively high for microbusinesses and small companies. I hope through the passage of the legislation we can work out ways to achieve even greater cost reduction so as to benefit micro and small businesses.
“In relation to the length of time that the new process will take, it is estimated that there may be little reduction in the length of time it takes to conclude the new small company administrative rescue process in comparison to normal administration. Minister Damien English relayed to me that it could take up to 49 days to produce a rescue plan, and it could take even longer to implement it thereafter.
“This is extremely disappointing, and it is an area that must be improved upon in anticipation of the implementation of the new process.
“There are numerous companies with sound business models who incur significant debts for many reasons, this new process must put those businesses and their workers front and centre and ensuring the new process is cheaper and quicker is central to this.”