A HIGH COURT judge has criticised as “unnecessary” and “costly” the routine practice of seeking the appointment of interim examiners to companies when they secure court protection.
There appears to be a view interim examiners can provide some comfort for companies, employees and creditors but that is “mythical and their appointment should be the exception, rather than the rule”, Mr Justice Peter Kelly said.
Interim examiners were there only “to examine” except in exceptional circumstances where company directors have been divested of powers or there is extreme urgency, he said. Such exceptional circumstances rarely arose and interim examiners were “mostly unnecessary and costly”.
The judge said he wanted to dissuade such applications unless truly required as they run up additional expenses and costs which are not necessary.
Unfortunately, the appointment of interim examiners often seems to be sought as “some form of PR exercise” for companies, he added.
He made the remarks yesterday when granting court protection to Rockwell Constructions Ltd, which provides high technology air-conditioning, clean room and environmental control systems.
The judge returned the company’s petition to October 29th next, when the appointment of an examiner will be sought, but refused to appoint an interim examiner after finding no basis for such an appointment had been made out. He also noted there was no prior agreement on the interim examiner’s fees.
The judge said he was satisfied to grant court protection to Rockwell, based at Macroom, Cork, on the basis of insolvency and a report of an independent accountant which expressed the opinion the company has a reasonable prospect of survival. The company had identified a prospective investor, he noted.
The judge also noted the company had been in business for 28 years and now employs 62 people, down from a high of 101 employees.
In moving the petition, James Doherty, for the company, said it had some 20 ongoing contracts, wanted to complete those and had also secured valuable new contracts.
