The Corporate Enforcement Agency in Irelnd ("CEA") has published an Information Note on the topic of Early Warning Tools and Restructuring Frameworks.
As outlined by the CEA :
The purpose of the document is to provide assistance to company directors in understanding certain aspects of the European Union (Preventive Restructuring) Regulations 2022.
Specifically, the Information Note has been prepared with a view to assisting company directors to understand:
- the importance of maintaining adequate accounting records,
- what is meant by a company being in financial difficulty, being unable to pay its debts and being insolvent respectively,
- specific aspects of company directors’ duties where a company is in financial difficulty, and
- the potential consequences of non-compliance with company directors’ duties.
The Information Note also:
- provides a series of easy to understand indicators that can help to identify whether a situation might be developing in which a company will experience difficulties in paying its debts,
- sets out certain key steps that company directors can take to ensure, on an ongoing basis, that they are aware of a company’s financial position, and
- details the various restructuring options open to companies and their directors where financial difficulties are being experienced. These include SCARP and examinership.