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Small-firm rescue process will bypass courts
Pic: Shutterstock

21 May 2021 / business Print

Small-firm rescue process will bypass courts

More information has emerged on plans to allow the vast majority of companies in Ireland to be rescued without applying to the courts.

The Companies (Small Company Administrative Rescue Process and Miscellaneous Provisions) Bill 2021 will amend the Companies Act 2014 to allow small and micro companies – which make up around 98% of the total – to access a new dedicated rescue process.

The Government has published further information about how the proposed Small Company Administrative Rescue Process (SCARP) process, based on recommendations by the Company Law Review Group (CLRG), will work.


Minister Robert Troy said the plan is to introduce SCARP as soon as possible.

“I want to ensure a high level of transparency so that businesses and stakeholders understand SCARP and the rationale behind it,” he said.

"In designing a new rescue process for small and micro companies, my department considered the CLRG report and opened a public consultation on several matters, including the inclusion of repudiation in an administrative process and the status of State creditors.


"I believe we have struck the right balance to develop a simplified and effective process that will assist viable companies to restructure and remain in business."

The new administrative rescue process will include provisions mirroring those in examinership, including:

  • Repudiation of onerous contracts,
  • Automatic stay on proceedings,
  • Cross-claim cram-down of debts, and
  • Creditor engagement.

Where companies owe Revenue, the State will only be able to opt out of a process on limited and specified grounds, which will be set out in the legislation, such as companies that might be using the process to avoid tax.

Gazette Desk
Gazette.ie is the daily legal news site of the Law Society of Ireland