The High Court recently considered the scope of an interim examiner's powers in Re M.D.Y. Construction Ltd [2018] IEHC 676.

Binding actions by the Interim Examiner

Of interest to the High Court was the timeline within which certain actions were taken by the interim examiner appointed to M.D.Y. Construction Limited (the Company). Prior to confirmation of his appointment as examiner, the interim examiner entered into a binding investment agreement with a third party to fund proposals for a scheme of arrangement.

On the same day, the interim examiner commenced the process of convening meetings of the members and creditors for the purpose of considering and voting on the proposed scheme of arrangement. Notices were issued and meetings were scheduled for the day after the petition to appoint the interim examiner as examiner was heard in court. The timing of the notices and proposals was a point of criticism by certain creditors who objected to the proposals. Usually proposals would not be formulated and notices of meetings issued until after the confirmation hearing.


Judge Quinn in the High Court noted that it was highly unusual for an interim examiner to invoke his powers to convene meetings of creditors on a proposed scheme of arrangement prior to the hearing of the petition to confirm his appointment.

It was the court's view that these actions should be considered "the exception and not the norm". Judge Quinn acknowledged that it was good practice for an examiner to move quickly after his appointment but noted that, in doing so, creditors and other interested parties may not have sufficient opportunity to be heard in relation to the petition or the identity of the examiner. The Court stated that in taking the course of action in the manner he did, the interim examiner had not acted improperly, but as a general rule, this course of action should only be taken where there are compelling reasons to do so.

In this case the Court found that the fact that key clients of the Company had indicated that they would terminate important contracts with the Company unless a plan for its survival was forthcoming as a matter of urgency was considered to be a compelling reason.

Key Outcomes

This decision shows that in certain circumstances an interim examiner may take steps to implement his/her proposals prior to the confirmation of their appointment as examiner. However, this course of action should only be exercised in compelling circumstances and time being of the essence will not always justify such a course of action.