Independent Expert Reports

An Independent Expert Report (IER) is a critical document required during the examinership process, where an independent accountant assesses a company’s financial health and prospects. This report is commissioned by the company and must include detailed information to demonstrate the company’s viability and potential for recovery. Specifically, it should confirm that the company has a ‘reasonable prospect of survival’ if the examinership is successful and that this outcome would be more beneficial to creditors than liquidation.

Key Requirements of the Report

The independent expert must provide a comprehensive analysis, including:

Reasonable Prospect of Survival

The report must analyse how the company became insolvent and identify the factors contributing to its difficulties. It should also demonstrate that the company has a reasonable prospect of survival, with the independent expert forming a well-founded opinion on its potential for recovery.

Financial Adequacy & Insolvency

The company must confirm its insolvency and ensure there are no unaccounted financial deficiencies. Additionally, it must demonstrate that it has sufficient funds to continue trading during the protection period.

Core Protection

The report should include cash flow projections and statements of affairs that validate the expert’s conclusions. The company will require court protection and a breathing space of up to 100 days.

Commercial Considerations

Several factors influence the viability of examinership, including:

Survival Potential

Is the company likely to continue as a going concern or is it terminally insolvent?

Asset and Liability Assessment

What are the company’s assets and liabilities? Are the assets easily saleable?

Cost Justification

Do the company’s assets justify the costs of examinership? How have the 12-month trading projections been assessed to show that the company can trade profitably with necessary adjustments?

Staff and Regulatory Impact

How will staffing and regulatory issues influence the process, considering that directors and staff will continue to manage the company during this period?

Note: The process of petitioning for an examiner involves meeting rigorous statutory tests but can be managed in a cost-effective manner. Companies must be prepared to allocate resources to support and manage this process.

Report Preparation and Requirements

The IER typically takes about one week to prepare. It includes an analysis of the company’s past issues and future prospects if restructured. The report must be thorough and all relevant facts must be disclosed, as there is an obligation for utmost good faith in the application process.

Content of the Report

The Independent Expert Report should include:

Company Details: Names and addresses of the company’s officers and related bodies.
Financial Statement: A detailed statement of the company’s assets, liabilities, and creditors, including securities held and dates given.
Insolvency Analysis: A review of the company’s trading difficulties and the reasons for its insolvency, including any unaccounted deficiencies or evidence of substantial property disappearance.
Survival Prospects: Evaluation of whether the company has a reasonable prospect of survival and necessary conditions for this.
Compromise Proposals: Opinion on whether a compromise or scheme of arrangement would offer a viable chance for survival.
Comparison with Liquidation: Opinion on whether continuing operations would be more beneficial than liquidation for the creditors.
Recommendations: Suggestions for the company’s immediate course of action, including draft proposals as necessary and funding requirements.
Funding Details: Information on required funding to continue trading during protection and its sources.
Liability Payments: Recommendations on pre-petition liabilities.
Court Directions: Opinion on whether the company requires an interim order from the court.

Contact Us

For expert advice and assistance with Independent Expert Reports, contact us at +353 (1) 213 5910 to learn more about how we can support your company through the examinership process.

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