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15 1997

CREDIT UNION ACT, 1997

PART XII

Appointment of Examiner

Power of the Court to appoint examiner.

142. —(1) Where, on application by petition under this section, it appears to the Court that—

(a) a credit union is or is likely to be unable to pay its debts, and

(b) no resolution subsists for the winding up of the credit union, and

(c) no order has been made for the winding up of the credit union,

it may, subject to subsection (2), appoint an examiner to the credit union for the purpose of examining the state of the credit union's affairs and performing such duties in relation to the credit union as may be imposed by or under this Part; and in the following provisions of this Part, “examiner” means an examiner appointed under this section.

(2) The Court shall not make an order under this section unless it is satisfied that there is a reasonable prospect of the survival of the credit union as a going concern.

(3) A petition under this section may be presented by the Registrar or, with the consent of the Registrar, by all or any of the following, together or separately—

(a) the credit union;

(b) the directors of the credit union;

(c) a qualifying group of members of the credit union; and

(d) a creditor, or contingent or prospective creditor (including an employee), of the credit union;

and, at the hearing of a petition under this section, every such creditor as is mentioned in paragraph (d) shall have a right to be heard (whether or not he is a party to the presentation of the petition).

(4) For the purpose of paragraph (c) of subsection (3), a group of members of a credit union is a qualifying group if—

(a) each of them has been a member throughout the period of 12 months ending on the date of the application for the consent of the Registrar under that subsection; and

(b) they together number at least 30 or, if it is less, at least ten per cent. of the membership of the credit union on that date.

(5) For the purposes of this section, a credit union is unable to pay its debts if—

(a) it is unable to pay its debts as they fall due; or

(b) the value of its assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities.

(6) In deciding whether to make an order under this section, the Court may also have regard to whether the credit union has sought from its creditors significant extensions of time for the payment of its debts, from which it could reasonably be inferred that the credit union was likely to be unable to pay its debts.

Petition for protection of the Court.

143. —(1) A petition presented under section 142

(a) shall nominate a person to be appointed as examiner;

(b) subject to section 146 , shall be accompanied by a report under section 145 , prepared by a person (in this Part referred to as “the independent accountant”) who is either the auditor of the credit union concerned or a person who is qualified to be an auditor of a credit union; and

(c) shall be accompanied by a consent signed by the person nominated to be examiner.

(2) The Court shall not give a hearing to a petition under section 142 which is presented by a contingent or prospective creditor until such security for costs has been given as the Court considers reasonable.

(3) The Court shall not give a hearing to a petition under section 142 if a receiver stands appointed to the credit union the subject of the petition and that receiver has stood so appointed for a continuous period of at least three days prior to the presentation of the petition, excluding a Saturday, Sunday or public holiday.

(4) The Court may decline to hear a petition under section 142 or, as the case may be, may decline to continue hearing such a petition if it appears to the Court that, in the preparation or presentation of the petition or in the preparation of the report of the independent accountant, the petitioner or independent accountant—

(a) has failed to disclose any information available to him which is material to the exercise by the Court of its powers under this Part; or

(b) has in any other way failed to exercise the utmost good faith.

(5) On hearing a petition under section 142 , the Court may dismiss it, or adjourn the hearing conditionally or unconditionally, or make any interim order or any other order it thinks fit.

(6) Without prejudice to the generality of subsection (5), an interim order under that subsection may restrict the exercise of any powers of the directors or of the credit union (whether by reference to the consent of the Court or otherwise).

(7) On the making of an order under subsection (5), the examiner or such other person as the Court may direct shall deliver an office copy of the order to the Registrar for placing on the public file of the credit union.

Powers of the Circuit Court.

144. —(1) Where it appears to the Court that the total liabilities of the credit union (taking into account its contingent and prospective liabilities) do not exceed £250,000, the Court may, after making such interim or other orders as it thinks fit, order that the matter be remitted to the Circuit Court.

(2) Where an order is made by the Court under subsection (1), the Circuit Court shall have full jurisdiction to exercise all the powers of the Court conferred by this Part in relation to the credit union and every reference to the Court in this Part shall be construed accordingly.

(3) Where, in any proceedings under this Part which have been remitted to the Circuit Court by virtue of subsection (1), it appears to the Circuit Court that the total liabilities of the credit union exceed £250,000, it shall, after making such interim orders as it thinks fit, make an order transferring the matter to the Court.

(4) The jurisdiction of the Circuit Court under this section shall be exercised by the judge for the time being assigned to the circuit in which the registered office of the credit union is situated.

The independent accountant's report.

145. —(1) The report of the independent accountant referred to in section 143 (1)(b) shall comprise the following—

(a) the names and permanent addresses of the officers of the credit union and, in so far as the independent accountant can establish, any person in accordance with whose directions or instructions the directors of the credit union are accustomed to act;

(b) the names of any other bodies corporate of which the directors of the credit union are also directors;

(c) a statement as to the affairs of the credit union showing, in so far as it is reasonably possible to do so, particulars of the credit union's assets and liabilities (including contingent and prospective liabilities) as at the latest practicable date, the names and addresses of its creditors, the securities held by them respectively and the dates when the securities were respectively given;

(d) whether in the opinion of the independent accountant any deficiency between the assets and the liabilities of the credit union has been satisfactorily accounted for or, if not, whether there is evidence of a substantial disappearance of property that is not adequately accounted for;

(e) his opinion as to whether the credit union would have a reasonable prospect of survival as a going concern and a statement of the conditions which he feels are essential to ensure such survival, whether as regards the internal management and controls of the credit union or otherwise;

(f) his opinion as to whether the formulation, acceptance and confirmation of proposals for a compromise or scheme of arrangement would offer a reasonable prospect of the survival of the credit union as a going concern;

(g) whether, in his opinion, an attempt to keep the credit union in being would be likely to be more advantageous to the members as a whole and the creditors as a whole than a winding-up of the credit union;

(h) recommendations as to the course he thinks should be taken in relation to the credit union including, if warranted, draft proposals for a compromise or scheme of arrangement;

(i) his opinion as to whether the facts disclosed would warrant further inquiries with a view to proceedings under section 297 or section 297A of the Companies Act, 1963 ;

(j) details of the extent of the funding required to keep the credit union in being during the period of protection and the sources of that funding;

(k) his recommendations as to which debts incurred before the presentation of the petition should be paid;

(l) his opinion as to whether the work of the examiner would be assisted by a direction of the Court in relation to the role or membership of any creditors' committee referred to in section 160 ; and

(m) such other matters as he thinks relevant.

(2) The independent accountant shall supply a copy of his report under this section to the credit union and to the Registrar on the same day as his delivery of the report to the Court.

(3) The independent accountant shall also supply a copy of his report under this section to any member or creditor of the credit union on written application, provided that that supply may, if the Court so directs, be subject to the omission of such parts of the report as the Court thinks fit.

(4) The Court may, in particular, give a direction under subsection (3) if it considers that the inclusion of certain information in the copy of the report to be supplied under that subsection would be likely to prejudice the survival of the credit union as a going concern.

Interim protection pending report.

146. —(1) If a petition presented under section 142 shows, and the Court is satisfied—

(a) that, by reason of exceptional circumstances outside the control of the petitioner, the report of the independent accountant is not available in time to accompany the petition, and

(b) that the petitioner could not reasonably have anticipated the circumstances referred to in paragraph (a),

and, accordingly, the Court is unable to consider the making of an order under that section, the Court may make an order under this section placing the credit union under the protection of the Court for such period, not exceeding ten days, as the Court thinks appropriate in order to allow for the submission of the independent accountant's report.

(2) Where an order is made under this section it shall be the duty of the directors of the credit union to provide all reasonable assistance in the preparation of the report of the independent accountant and, in particular, to furnish the information specified in paragraphs (a) to (c) of subsection (1) of section 145 .

(3) Any person who fails to comply with subsection (2) shall be guilty of an offence.

(4) If the report of the independent accountant is submitted to the Court before the expiry of the period of protection ordered under subsection (1), the Court shall proceed to consider the petition together with the report as if they were presented in accordance with section 143 (1).

(5) If the report of the independent accountant is not submitted to the Court before the expiry of the period of protection ordered under subsection (1), then, at the expiry of that period, the credit union shall cease to be under the protection of the Court, but without prejudice to the presentation of a further petition under section 142 .

Effect of petition to appoint examiner on creditors and others.

147. —(1) Subject to section 146 , during the period beginning with the date of the presentation of a petition under section 142 and (subject to subsections (4) and (5) of section 157 ) ending on the expiry of 70 days from that date or on the withdrawal or refusal of the petition, whichever first happens, the credit union shall be deemed to be under the protection of the Court.

(2) For so long as a credit union is under the protection of the Court in a case under this Part, the following provisions shall have effect—

(a) no proceedings for the winding up of the credit union may be commenced or resolution for winding up passed in relation to the credit union and any resolution so passed shall be of no effect;

(b) any other proceedings in relation to the credit union may be commenced only with the leave of the Court and subject to such terms as the Court may impose;

(c) on the application of the examiner, the Court may make such order as it thinks proper in relation to any existing proceedings, including an order to stay those proceedings;

(d) no receiver shall be appointed over any part of the assets of the credit union and, if a receiver was appointed before the presentation of a petition under section 142 , then, subject to section 148 , he shall not be able to act;

(e) no attachment, sequestration, distress or execution shall be put into force against the property of the credit union, except with the consent of the examiner;

(f) where any claim against the credit union is secured by a charge, pledge, or other encumbrance of, on or affecting the whole or any part of the property of the credit union, no action may be taken to realise the whole or any part of that security, except with the consent of the examiner;

(g) no steps may be taken to repossess goods in the credit union's possession under any hire-purchase agreement (within the meaning of section 153 ) except with the consent of the examiner;

(h) where, under any enactment, rule of law or otherwise any person other than the credit union is liable to pay all or any part of the debts of the credit union—

(i) no attachment, sequestration, distress or execution shall be put into force against the property of that person in respect of the debts of the credit union, and

(ii) no proceedings of any sort may be commenced against that person in respect of the debts of the credit union;

(i) no set-off between separate bank accounts of the credit union shall be effected, except with the consent of the examiner, and in this paragraph “bank account” includes an account with any person exempt by virtue of section 7 (4) of the Central Bank Act, 1971 , from the requirement of holding a licence under section 9 of that Act.

Effect on receiver or provisional liquidator of order appointing examiner.

148. —(1) Where, at the time of the presentation of a petition under section 142 with respect to a credit union, a receiver or provisional liquidator stands appointed to the whole or any part of the assets of that credit union, the Court may make such order as it thinks fit, including an order as to any or all of the following matters—

(a) that the receiver or provisional liquidator shall cease to act as such from a date specified by the Court;

(b) that, where a receiver stands appointed, he shall, from a date specified by the Court, act as such only in respect of certain assets specified by the Court;

(c) that, where a provisional liquidator stands appointed, he be appointed as examiner;

(d) directing the receiver or provisional liquidator to deliver all books and documents which relate to the assets of the credit union (or any part thereof) and are in his possession or control, to the examiner within a period to be specified by the Court;

(e) directing the receiver or provisional liquidator to give the examiner full particulars of all his dealings with the assets of the credit union.

(2) In deciding whether to make an order under paragraph (a) or paragraph (b) of subsection (1), the Court shall have regard to whether there is a reasonable prospect of the survival of the credit union as a going concern.

(3) Where the Court makes an order under subsection (1) it may, for the purpose of giving full effect to the order, include such conditions in the order and make such ancillary or other orders as it deems fit.

(4) Where a petition is presented under section 142 in respect of a credit union at a date subsequent to the presentation of a petition for the winding up of that credit union, but before a provisional liquidator has been appointed or an order made for its winding up, both petitions shall be heard together.

Powers of an examiner.

149. —(1) Any provision of this Act relating to the rights and powers of an auditor of a credit union and the supplying of information to or co-operation with such an auditor shall, with the necessary modifications, apply to an examiner.

(2) Notwithstanding any provision of this Act relating to notice of general meetings, an examiner shall have power to convene, set the agenda for, and preside at meetings of the board of directors and general meetings of the credit union to which the examiner is appointed and to propose motions or resolutions and to give reports to any such meetings.

(3) An examiner shall be entitled to reasonable notice of, to attend and be heard at, all meetings of the board of directors of a credit union and all general meetings of the credit union to which he is appointed.

(4) For the purpose of subsection (3)reasonable notice”, in relation to a meeting, shall be deemed to include a description of the business to be transacted at the meeting.

(5) Where an examiner becomes aware of any actual or proposed act, omission, course of conduct, decision or contract, by or on behalf of the credit union to which he has been appointed, or by its officers, voluntary assistants, members or creditors or by any other person in relation to the income, assets or liabilities of that credit union which, in his opinion, is or is likely to be to the detriment of the credit union, or any member or creditor of the credit union, he shall, subject to the rights of parties acquiring an interest in good faith and for value in the income, assets or liabilities, have full power to take whatever steps are necessary to halt, prevent or rectify the effects of the act, omission, course of conduct, decision or contract.

(6) The examiner may apply to the Court to determine any question arising in the course of his office.

(7) The examiner shall, if so directed by the Court, have power to ascertain and agree claims against the credit union to which he has been appointed.

Production of documents and evidence.

150. —(1) It shall be the duty of all persons who are, or at any material time were, officers, members, voluntary assistants or agents of a credit union to which an examiner has been appointed to produce to the examiner all books and documents of or relating to the credit union which are in their possession or power, to attend before him when required so to do and otherwise to give to him all assistance in connection with his functions which they are reasonably able to give.

(2) If the examiner considers that a person other than one falling within subsection (1) is or may be in possession of any information concerning the affairs of the credit union the examiner may require that person to produce to him any books or documents in that person's possession or power relating to the credit union, to attend before him and otherwise to give him all assistance in connection with his functions which that person is reasonably able to give; and it shall be the duty of that person to comply with the requirement.

(3) If the examiner has reasonable grounds for believing that a person who is, or at a material time was, an officer, member, voluntary assistant or agent of a credit union maintains or has maintained a bank account of any description, whether alone or jointly with another person and whether in the State or elsewhere, into or out of which there has been paid—

(a) any money which has resulted from or been used in the financing of any transaction, arrangement or agreement particulars of which have not been disclosed in the accounts of the credit union for any financial year as required by law; or

(b) any money which has been in any way connected with any act or omission, or series of acts or omissions, which on the part of that officer, member, voluntary assistant or agent constituted misconduct (whether fraudulent or not) towards the credit union or its members;

the examiner may require the person concerned to produce to him all books and documents in his possession or under his control relating to that bank account; and in this subsection “bank account” includes an account with any person exempt by virtue of section 7 (4) of the Central Bank Act, 1971 , from the requirement of holding a licence under section 9 of that Act.

(4) An examiner may examine on oath, either by word of mouth or on written interrogatories, any person who is, or at a material time was, an officer, member, voluntary assistant or agent of the credit union or any other such person as is mentioned in subsection (2) in relation to the affairs of the credit union and may—

(a) administer an oath accordingly; and

(b) reduce the answers of any such person to writing and require him to sign them.

(5) If any such person as is referred to in subsection (4)

(a) refuses to produce to the examiner any book or document which it is his duty under this section to produce, or

(b) refuses to attend before the examiner when required to do so, or

(c) refuses to answer any question which is put to him by the examiner with respect to the affairs of the credit union,

the examiner may certify the refusal under his hand to the Court, and the Court may thereupon enquire into the case and, after hearing any witnesses who may be produced against or on behalf of the alleged offender and any statement which may be offered in defence, may make any order or direction it thinks fit.

(6) Without prejudice to the generality of subsection (5), the Court may, after a hearing under that subsection, make a direction—

(a) to the person concerned to attend or re-attend before the examiner or produce particular books or documents or answer particular questions put to him by the examiner; or

(b) that the person concerned need not produce a particular book or document or answer a particular question put to him by the examiner.

(7) Nothing in this section shall compel the production by a barrister or solicitor of any books or documents containing a privileged communication made by or to him in that capacity or the furnishing of information contained in a privileged communication so made.

(8) In this section “agents”, in relation to a credit union, includes its bankers, accountants and solicitors, any person who is or has been an auditor of the credit union and its financial and other advisers.

Further powers of the Court.

151. —(1) Where it appears to the Court, on the application of the examiner, that, having regard to the matters referred to in subsection (2), it is just and equitable to do so, it may make an order that all or any of the functions which are vested in or exercisable by the directors (whether by virtue of the rules of the credit union or by law or otherwise) shall be performable or exercisable only by the examiner.

(2) The matters to which the Court is to have regard for the purpose of subsection (1) are—

(a) that the affairs of the credit union are being conducted, or are likely to be conducted, in a manner which is calculated or likely to prejudice the interests of the credit union or of its members or of its creditors as a whole; or

(b) that it is expedient, for the purpose of preserving the assets of the credit union or of safeguarding the interests of the credit union or of its members or of its creditors as a whole, that the carrying on of the business of the credit union by, or the exercise of the powers of, its directors should be curtailed or regulated in any particular respect; or

(c) that the credit union, or its directors, have resolved that an order under subsection (1) should be sought; or

(d) any other matter in relation to the credit union the Court thinks relevant.

(3) Where the Court makes an order under subsection (1), it may, for the purpose of giving full effect to the order, include such conditions in the order and make such ancillary or other orders as it sees fit.

(4) Without prejudice to the generality of subsections (1) and (3), an order under this section may provide that the examiner shall have all or any of the powers that he would have if he were a liquidator appointed by the Court in respect of the credit union and, where such an order so provides, the Court shall have all the powers that it would have if it had made a winding up order and appointed a liquidator in respect of the credit union concerned.

Incurring of certain liabilities by examiner.

152. —(1) Any liabilities which are incurred by the credit union during the protection period and which fall within subsection (2) shall be treated as expenses properly incurred, for the purpose of section 168 , by the examiner.

(2) The liabilities referred to in subsection (1) are those certified by the examiner at the time they are incurred, to have been incurred in circumstances where, in the opinion of the examiner, the survival of the credit union as a going concern during the protection period would otherwise be seriously prejudiced.

(3) In this section “protection period” means the period, beginning with the appointment of an examiner, during which the credit union is under the protection of the Court.

Power to deal with charged property etc.

153. —(1) Where, on an application by the examiner, the Court is satisfied that there is a reasonable prospect of the survival of the credit union as a going concern and that the disposal (with or without other assets) of—

(a) any property of the credit union subject to a security, or

(b) any goods in the possession of the credit union under a hire-purchase agreement,

would be likely to further that prospect, the Court may by order authorise the examiner to dispose of the property as if it were not subject to the security or dispose of the goods as if all rights of the owner under the hire-purchase agreement were vested in the credit union.

(2) It shall be a condition of an order under subsection (1) that—

(a) the net proceeds of the disposal, and

(b) where those proceeds are less than such amount as may be determined by the Court to be the net amount which would be realised on a sale of the property or goods in the open market by a willing vendor, such sums as may be required to make good the deficiency,

shall be applied towards discharging the sums secured by the security or payable under the hire-purchase agreement.

(3) Where a condition imposed in pursuance of subsection (2) relates to two or more securities, that condition requires the net proceeds of the disposal and, where paragraph (b) of that subsection applies, the sums mentioned in that paragraph to be applied towards discharging the sums secured by those securities in the order of their priorities.

(4) An office copy of an order under subsection (1) in relation to a security shall, within seven days after the making of the order, be delivered by the examiner to the Registrar.

(5) If the examiner without reasonable excuse fails to comply with subsection (4), he shall be guilty of an offence and liable to a fine not exceeding £1,000.

(6) References in this section to a hire-purchase agreement include a conditional sale agreement, a retention of title agreement and an agreement for the bailment of goods which is capable of subsisting for more than three months.

Notification of appointment of examiner.

154. —(1) Where a petition is presented under section 142 , notice of the petition shall, within three days after its presentation, be placed on the public file of the credit union.

(2) An examiner shall, within the time limits specified in subsection (3), cause notice of his appointment and the date thereof to be published in Iris Oifigiúil and in at least two daily newspapers circulating in the district in which the registered office of the credit union is situated.

(3) The time limits referred to in subsection (2) are—

(a) twenty-one days after the examiner's appointment in the case of Iris Oifigiúil, and

(b) three days after his appointment in the other case referred to in that subsection.

(4) An examiner shall, within three days after his appointment, deliver to the Registrar a copy of the order appointing him.

(5) Where a credit union is, by virtue of section 146 or section 147 , under the protection of the Court, every invoice, order for goods or letter issued by or on behalf of the credit union, being a document on or in which the name of the credit union appears, shall contain the statement “under the protection of the Court”.

(6) An examiner who fails to comply with the provisions of this section shall be guilty of an offence.

General provisions as to examiners.

155. —(1) An examiner may resign or, on cause shown, be removed by the Court.

(2) If for any reason a vacancy occurs in the office of examiner, the Court, on an application made by the Registrar or by the person on whose petition the examiner was appointed, may by order fill the vacancy.

(3) An examiner shall be described by the style of “the examiner” of the particular credit union in respect of which he is appointed and not by his individual name.

(4) The acts of an examiner shall be valid notwithstanding any defects that may afterwards be discovered in his appointment or qualification.

(5) An examiner shall be personally liable on any contract entered into by him in the performance of his functions, whether the contract is entered into by him in the name of the credit union or in his own name as examiner or otherwise, unless the contract provides that he is not to be personally liable on the contract, and he shall be entitled in respect of that liability to indemnity out of the assets of the credit union.

(6) Nothing in subsection (5) shall be taken as limiting any right to indemnity which an examiner would have apart from that subsection, or as limiting his liability on contracts entered into without authority or as conferring any right to indemnity in respect of that liability.

(7) Where an examiner has been appointed to a credit union,—

(a) the credit union,

(b) the Registrar, or

(c) a member or creditor of the credit union,

may apply to the Court for the determination of any question arising out of the performance or otherwise by the examiner of his functions.

Hearing relating to missing property etc.

156. —(1) Where, in relation to a credit union which is under the protection of the Court, there is evidence, whether contained in the report of the independent accountant or otherwise, of a substantial disappearance of property that is not adequately accounted for, or of other serious irregularities in relation to the affairs of the credit union, the Court shall, as soon as practicable, hold a hearing to consider that evidence.

(2) If, in advance of a hearing under subsection (1), the Court so requests, the examiner shall prepare a report on the issues raised by the evidence in question.

(3) Where the examiner prepares a report as mentioned in subsection (2), the examiner shall supply a copy of his report to the credit union and the Registrar on the same day as his delivery of the report to the Court.

(4) The examiner shall also supply a copy of a report prepared by him as mentioned in subsection (2)

(a) to every person who is mentioned in the report, and

(b) on written application, to any member or creditor of the credit union,

provided that any supply may, if the Court so directs, be subject to the omission of such parts of the report as the Court thinks fit.

(5) The Court may, in particular, give a direction under subsection (4) if it considers that the inclusion of certain information in the copy of the report in question would be likely to prejudice the survival of the credit union as a going concern.

(6) The following parties shall be entitled to appear and to be heard at a hearing under subsection (1)

(a) the examiner;

(b) the Registrar;

(c) the credit union;

(d) any member or creditor of the credit union, and

(e) any person who is referred to in the report.

(7) Following a hearing under subsection (1), the Court may make such order or orders as it deems fit.

(8) An office copy of any order made by the Court under this section shall be delivered by the examiner, or by such other person as the Court may direct, to the Registrar for placing on the public file of the credit union.

Duties of examiner.

157. —(1) As soon as practicable after he is appointed, the examiner shall formulate proposals for a compromise or scheme of arrangement for the survival of the credit union as a going concern and, notwithstanding any other provision of this Act, the Court may impose on the examiner such other duties as it deems appropriate.

(2) Notwithstanding any provision of this Act relating to notice of general meetings, (but subject to notice of not less than three days in any case) the examiner shall convene and preside at such meetings of members and creditors as he thinks proper, to consider such proposals as are referred to in subsection (1) and report thereon to the Court in accordance with section 158 within 35 days of his appointment or such longer period as the Court may allow.

(3) The Registrar shall have the right to attend and speak at any meeting convened under subsection (2).

(4) Where, on the application of the examiner, the Court is satisfied that the examiner would be unable to report to the Court within the period of 70 days referred to in section 147 (1) but that he would be able to make a report if that period were extended, the Court may by order extend that period by not more than 30 days to enable him to do so.

(5) Where the examiner has submitted a report under this section to the Court and, but for this subsection, the period mentioned in section 147 (1) (and any extended period allowed under subsection (4)) would expire, the Court may, of its own motion or on the application of the examiner, extend the period concerned by such period as the Court considers necessary to enable it to take a decision under section 163 .

(6) The examiner shall deliver a copy of his report under this section—

(a) to the credit union and to the Registrar on the same day as his delivery of the report to the Court, and

(b) to any member or creditor of the credit union on written application,

provided that delivery under paragraph (b) may, if the Court so directs, be subject to the omission of such parts of the report as the Court thinks fit.

(7) The Court may, in particular, give a direction under subsection (6) if it considers that the inclusion of certain information in the copy of the report to be delivered under paragraph (b) of that subsection would be likely to prejudice the survival of the credit union, as a going concern.

Contents of examiner's report under section 157 .

158. —An examiner's report under section 157 shall include—

(a) the proposals placed before the required meetings;

(b) any modification of those proposals adopted at any of those meetings;

(c) the outcome of each of the required meetings;

(d) the recommendation of the committee of creditors, if any, appointed under section 160 ;

(e) a statement of the assets and liabilities (including contingent and prospective liabilities) of the credit union as at the date of his report;

(f) a list of the creditors of the credit union, the amount owing to each such creditor, the nature and value of any security held by any such creditor, and the priority status of any such creditor under any statutory provision or rule of law;

(g) a list of the officers of the credit union;

(h) his recommendations; and

(i) such other matters as the examiner deems appropriate or the Court directs.

Repudiation of certain contracts.

159. —(1) Where proposals for a compromise or scheme of arrangement are to be formulated in relation to a credit union, the credit union may, subject to the approval of the Court, affirm or repudiate any contract under which some element of performance other than payment remains to be rendered both by the credit union and the other contracting party or parties.

(2) Any person who suffers loss or damage as a result of such a repudiation shall stand as an unsecured creditor for the amount of the loss or damage.

(3) In order to facilitate the formulation, consideration or confirmation of a compromise or scheme of arrangement, the Court may hold a hearing and make an order determining the amount of any such loss or damage as is referred to in subsection (2) and the amount so determined shall be due by the credit union to the creditor as a judgement debt.

(4) Where the examiner is not a party to an application to the Court for the purposes of subsection (1), the credit union shall serve notice of the application on the examiner, and the examiner may appear and be heard on the hearing of the application.

(5) Where the Court approves the affirmation or repudiation of a contract under this section, it may, in giving its approval, make such orders as it thinks fit for the purposes of giving full effect to its approval, including orders as to notice to, or declaring the rights of, any party affected by the affirmation or repudiation.

Appointment of creditors' committee.

160. —(1) An examiner may, and if so directed by the Court shall, appoint a committee of creditors to assist him in the performance of his functions.

(2) Save as otherwise directed by the Court, a committee appointed under subsection (1) shall consist of not more than five members and shall include the holders of the three largest unsecured claims who are willing to serve.

(3) The examiner shall provide the committee with a copy of any proposals for a compromise or scheme of arrangement and the committee may express an opinion on the proposals on its own behalf or on behalf of the creditors or classes of creditors represented on the committee.

(4) As soon as practicable after the appointment of a committee under subsection (1) the examiner shall meet with the committee to transact such business as may be necessary.

Proposals for compromise or scheme of arrangement.

161. —(1) Proposals for a compromise or scheme of arrangement shall—

(a) specify the members and each class of creditors of the credit union;

(b) specify any members or class of creditors whose interests or claims will not be impaired by the proposals;

(c) specify any members or class of creditors whose interests or claims will be impaired by the proposals;

(d) provide equal treatment for each interest or claim of a member or class of creditor unless the holder of a particular interest or claim agrees to less favourable treatment;

(e) provide for the implementation of the proposals;

(f) if the examiner considers it necessary or desirable to do so to ensure that there is a reasonable prospect of the survival of the credit union as a going concern, specify whatever changes should be made in relation to the management or direction of the credit union;

(g) if the examiner considers it necessary or desirable as mentioned in paragraph (f), specify any changes he considers should be made in the rules of the credit union, whether as regards the management or direction of the credit union or otherwise; and

(h) include such other matters as the examiner deems appropriate;

and a copy of the proposals shall be sent to the Registrar in advance of any meeting of members or creditors under section 162 .

(2) A statement of the assets and liabilities (including contingent and prospective liabilities) of the credit union as at the date of the proposals shall be attached to each copy of the proposals sent to the Registrar and submitted to meetings of members and creditors under section 162 .

(3) There shall also be attached to each such copy of the proposals a description of the estimated financial outcome of a winding-up of the credit union for the members and each class of creditors.

(4) The Court may direct that the proposals include whatever other provisions it deems fit.

(5) For the purposes of this section and sections 162 and 163 , a creditor's claim against a credit union is impaired if he receives less in payment of his claim than the full amount due in respect of the claim at the date of presentation of the petition for the appointment of the examiner.

(6) For the purposes of this section and sections 162 and 163 , the interest of a member of a credit union in the credit union is impaired if—

(a) he is deprived of all or any part of the rights accruing to him by virtue of his shareholding in, or membership of, the credit union; or

(b) he is deprived of the whole or part of his shareholding in the credit union.

Consideration by members and creditors of proposals.

162. —(1) This section applies to a meeting of members or creditors or any class of creditors summoned to consider proposals for a compromise or scheme of arrangement.

(2) At a meeting to which this section applies, a modification of the proposals may be put to the meeting but may only be accepted with the consent of the examiner.

(3) Proposals shall be deemed to have been accepted by a meeting of members if a majority of the members present and voting vote in favour of the resolution for the proposals.

(4) Proposals shall be deemed to have been accepted by a meeting of creditors or of a class of creditors when a majority in number representing a majority in value of the claims represented at that meeting have voted, either in person or by proxy, in favour of the resolution for the proposals.

(5) Where a State authority is a creditor of the credit union, that authority shall be entitled to accept proposals under this section notwithstanding—

(a) that any claim of the State authority as a creditor would be impaired under the proposals; or

(b) any other enactment;

and in this subsection “State authority” means the State, a Minister of the Government, a local authority or the Revenue Commissioners.

(6) With every notice summoning a meeting to which this section applies which is sent to a creditor or member, there shall be sent also a statement explaining the effect of the compromise or scheme of arrangement and, in particular, stating any material interests of the officers of the credit union, whether as officers or as members or as creditors of the credit union or otherwise and the effect thereon of the compromise or arrangement, in so far as it is different from the effect on the like interest of other persons.

(7) Where a resolution is passed at an adjourned meeting to which this section applies, the resolution shall for all purposes be treated as having been passed on the date on which it was passed and shall not be deemed to have been passed on any earlier date.

Consideration of proposals by the Court.

163. —(1) The report of the examiner under section 157 shall be set down for consideration by the Court as soon as may be after receipt of the report by the Court.

(2) The following persons shall be entitled to appear and be heard at the hearing under subsection (1)

(a) the examiner;

(b) the Registrar;

(c) the credit union;

(d) the savings protection scheme in which the credit union participates; and

(e) any creditor or member whose claim or interest would be impaired if the proposals for a compromise or scheme of arrangement were implemented;

and the Court may permit to appear and be heard any other person who it considers to have a sufficient interest in the matter.

(3) At a hearing under subsection (1) the Court may, as it thinks proper, subject to the provisions of this section, confirm, confirm subject to modifications, or refuse to confirm the proposals.

(4) The Court shall not confirm any proposals unless one member and one class of creditor whose interests or claims would be impaired by implementation of the proposals have accepted the proposals and the Court is satisfied that—

(a) the proposals are fair and equitable in relation to any member or class of creditors that has not accepted the proposals and whose interests or claims would be impaired by implementation; and

(b) the proposals are not unfairly prejudicial to the interests of any member or creditor;

nor shall the Court confirm any proposals if the sole or primary purpose of them is the avoidance of payment of tax due.

(5) At a hearing under this section, the Registrar or a member or creditor whose interest or claim would be impaired by the proposals may object in particular to their confirmation by the Court on any of the following grounds—

(a) that there was some material irregularity at or in relation to a meeting to which section 162 applies;

(b) that acceptance of the proposals by the meeting was obtained by improper means;

(c) that the proposals were put forward for an improper purpose; or

(d) that the proposals unfairly prejudice the interests of the objector.

(6) Any person who voted to accept the proposals may not object to their confirmation by the Court except on the grounds—

(a) that acceptance of the proposals was obtained by improper means; or

(b) that, after voting to accept the proposals, he became aware that they were put forward for an improper purpose.

(7) Where the Court upholds an objection to the confirmation of any proposals, the Court may make such order as it deems fit, including an order that the decision of any meeting be set aside and an order that any meeting be reconvened.

(8) Notwithstanding subsection (4), or any other provision of this Part, nothing in this Part shall prevent the examiner from including in his report under section 157 proposals which will not involve the impairment of the interests of members or creditors of the credit union, nor the Court from confirming any such proposals.

Confirmation or otherwise of proposals by the Court.

164. —(1) Where the Court confirms proposals for a compromise or scheme of arrangement (with or without modification), the proposals shall be binding on all the members of the credit union and also on the credit union itself.

(2) Where the Court confirms the proposals (with or without modification) the proposals shall, notwithstanding anything in any other enactment, be binding on all the creditors or the class or classes of creditors, as the case may be, affected by the proposals in respect of any claim or claims against the credit union and any person, other than the credit union who, under any enactment, rule of law or otherwise, is liable for all or any part of the debts of the credit union.

(3) Any alterations in, additions to or deletions from the rules of the credit union which are specified in the proposals shall, after confirmation of the proposals by the Court, take effect from the date fixed by the Court; and where the Court confirms proposals, it may make such orders for the implementation of its decision as it deems fit.

(4) A compromise or scheme of arrangement, the proposals for which have been confirmed by the Court, shall come into effect from a date fixed by the Court, being not later than 21 days from the date of their confirmation.

(5) If, at any time after a compromise or scheme of arrangement has come into effect, it appears to the Registrar that an amendment of the rules of the credit union sent to him under section 14 (2) conflicts with the proposals confirmed by the Court, he may on that ground refuse to register the amendment, and section 14 (5) shall apply accordingly.

(6) As soon as practicable after the confirmation of proposals by the Court, an office copy of any order made by the Court under this section shall be delivered by the examiner, or by such other person as the Court may direct, to the Registrar for placing on the public file of the credit union.

(7) Where—

(a) the Court refuses to confirm proposals for a compromise or scheme of arrangement for a credit union, or

(b) the report of an examiner under section 157 concludes that, following the required meetings of members and creditors of a credit union under this Part, it has not been possible to reach agreement on a compromise or scheme of arrangement,

the Court may, if it considers it just and equitable to do so, make an order for the winding up of the credit union, or any other order it deems fit.

(8) Where the Court makes an order for the winding-up of a credit union under this Part, the winding-up shall be deemed to have commenced on the date of the making of the order, unless the Court otherwise orders.

Ending of protection.

165. —(1) Notwithstanding anything in the preceding provisions of this Part, any protection deemed to be granted to a credit union under those provisions shall cease—

(a) on the coming into effect of a compromise or scheme of arrangement under this Part; or

(b) on such earlier date as the Court may direct.

(2) Where a credit union ceases to be under the protection of the Court, the appointment of the examiner shall terminate on the date of that cessation.

Revocation of confirmation on grounds of fraud.

166. —(1) If, within six months after the confirmation by the Court of proposals for a compromise or scheme of arrangement—

(a) the credit union concerned,

(b) the Registrar, or

(c) a member or creditor of the credit union,

applies to the Court for the revocation of the confirmation on the grounds that it was procured by fraud and the Court is satisfied that that is the case, the Court may by order revoke the confirmation.

(2) A revocation of a confirmation under this section shall be on such terms and conditions, particularly with regard to the protection of the rights of parties acquiring interests or property in good faith and for value in reliance on that confirmation, as the Court deems fit.

(3) As soon as practicable after the revocation of a confirmation under this section, an office copy of the order made by the Court under this section shall be delivered by such person as the Court may direct for placing on the public file of the credit union.

Disqualification to act as examiner.

167. —(1) A person shall not be qualified to be appointed or to act as an examiner of a credit union if he would not be qualified to act as its liquidator.

(2) A person who acts as an examiner of a credit union while disqualified under this section shall be guilty of an offence.

Remuneration, costs and expenses of examiners.

168. —(1) The Court may from time to time make such orders as it thinks proper for payment of the remuneration and costs of, and reasonable expenses properly incurred by, an examiner.

(2) Unless the Court otherwise orders, the remuneration, costs and expenses of an examiner shall be paid, and the examiner shall be entitled to be indemnified in respect thereof, out of the income of the credit union to which he has been appointed, or the proceeds of realisation of its assets (including investments).

(3) The remuneration, costs and expenses of an examiner which have been sanctioned by order of the Court shall be paid in full and shall be paid before any other claim, secured or unsecured, under any compromise or scheme of arrangement or in any receivership or winding-up of the credit union to which he has been appointed.

(4) The functions of an examiner may be performed by him with the assistance of persons appointed or employed by him for the purpose, provided that an examiner shall, in so far as it is reasonably possible, make use of the services of the officers and facilities of the credit union to which he has been appointed to assist him in the performance of his functions.

(5) In considering any matter relating to the costs, expenses and remuneration of an examiner the Court shall have particular regard to the proviso to subsection (4).

Publicity.

169. —(1) An examiner or, where appropriate, such other person as the Court may direct, shall within 14 days after the delivery to the Registrar of every order made under section 156 , section 164 or section 166 cause notice of that delivery to be published in Iris Oifigiúil.

(2) A person who fails to comply with this section shall be guilty of an offence.

Hearing of proceedings otherwise than in public.

170. —The whole or any part of any proceedings under this Part may be heard otherwise than in public if the Court, in the interests of justice, considers that the interests of the credit union concerned or its creditors or its members as a whole so require.