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Solicitors Seminar in Killarney
The Sixteenth Seminar, organised jointly by the Society
of Young Solicitors and by the Provincial Solicitors'
Association, was held in the Great Southern Hotel,
Killarney, Co. Kerry, on Saturday, March 31, and Sun-
day, April 1, 1973. More than 200 members attended
the Seminar.
The first lecture on Saturday morning was delivered
by Senator
Alexis Fitzgerald,
Solicitor, on the subject of
"Takeovers, Amalgamations and Reconstructions in
Company Law". He referred to the takeover procedure
contemplated by sections 203 and 204 of the Companies
Act 1963 and then in detail to the takeover code of
the Bank of England. He emphasised that the usual
clauses in a takeover agreement were :
(1) That the management was to be carried on as
heretofore.
(2) That if necessary special steps are to be taken
before completion about reconstruction and devaluing
or revaluing shares. It was obvious that this agreement
would have to be drafted with great care : a distinction
was also made between this agreement for sale and the
warranty document, which seeks security against the
liabilities of the purchasing company if the main pur-
chaser is living abroad : arbitration should be provided
to settle disputes, if required. The schemes of Recon-
struction under Sections 201 and 203 of the Companies
Act 1963 were then considered.
Mr. John
Stakelum, F.C.A.,
then dealt with the
"Accountancy aspect of Liquidations and Receiver-
ships". He stressed that a liquidator had a great respon-
sibility as he temporarily replaced a Board of Directors
and thus controlled the management of the company.
He had to make quick decisions, and his main attributes
should be, apart from professional competence and
common sense, tact and diplomacy. While a Receiver
acts for one specific creditor, the liquidator acts for
them all. Most liquidations due to insolvency are
Creditors Voluntary Liquidators, and this is often due
to defective financial records. If an accountant is to
advise in an insolvency situation, he must get accurate
information. The Accountant must advise a liquida-
tion where the company's prime purpose has dis-
appeared. In the case of a substantial liquidation, the
creditors should avail of the opportunity to appoint a
Committee of Inspection.
When a Receiver is appointed, he should first satisfy
himself whether the person appointing him has author-
ity to do so—whether there are sufficient powers given
to him to carry out his functions, and whether he can
carry on trading if it is necessary to do so. All necessary
documents such as stationery books, company seals,
financial books and records, insurance policies, relating
to the deeds and records, and particularly the keys to
the companys premises should be handed over to the
liquidators who should make sure that all the actions
and assets of the Company are adequately protected
under a policy issued in his name. The Liquidator will
then have to decide to what extent the business will
be carried on—normally sufficient to dispose of any
substantial stocks in trade at this normal market value.
Mr. Oliver Fry,
Solicitor, then spoke on the "Legal
aspects of Liquidation and Receivership". He stressed
that a Voluntary Liquidation could arise either (a)
from a Members Winding Up, when the Company is
solvent, or (b) from a Creditor's Winding Up, if the
Company is insolvent. The procedure for a Members
Winding up is fully set out in Section 256 of the Com-
panies Act 1963. Here the Directors make a Statutory
Declaration stating that they consider the Company will
be asked within 12 months from the Winding Up to
pay its debts in full; which must be made within 28
days of the resolution of Winding Up—to be passed by
a general meeting. Once the resolution is passed, it
must be officially advertised.
In the case of a
Creditor's Winding Up,
14 days
notice must be given of the meeting of the Company
and public. At this meeting a resolution is proposed to
the effect that the Company cannot by reason of its
debts continue its business, and that it is advisable
to wind up the Company voluntarily, and to appoint
Mr. X Liquidator. When the shareholders meeting is
over, a Creditors Meeting to be held, which must be
covered with ten clear days notice. They can accept the
shareholders nominee as Liquidator, or appoint a
different one themselves. Most creditors are companies
representatives at the meeting. The Solicitor at the
Creditors meeting will indicate the capital structure of
the company, and what trade was carried on. The pro-
cedure by petition for Winding Up a Company was
then fully set out. If the Company is in serious financial
state, then it is advisable to apply to the Court to
appoint a provisional liquidator, as the accounts of the
Company may be frozen.
Mr. Martin Rafferty,
Chairman of Belevedere Trust
Ltd., delivered a paper on "Mergers and Takeovers",
said that the bulk of rationalisation, in the way of
mergers in Ireland has involved publicly quoted com-
panies who will have to make a fundamental decision
as to whether they will go public or become part of a
much larger unit. Industrial Holding Companies have
increased because it is difficult to build a substantial
Irish Company from scratch, and large private Com-
panies can then develop at a faster rate. With great
incidences in taxation there is a greater incentive for
highly paid managers to undertake the work, parti-
cularly in view of the fact that more Irish Companies
will endeavour to expand their operations outside
Ireland.
As regards take-over bids, when the bid is made, the
public company should seek the advice of an outside
merchant banker, and the company must at all times
act for all the shareholders. Note that an offer must be
properly made before it is accepted; in fact 90 per
cent of decisions in takeover bids relate to the com-
patibility of the specific people involved.
In the case of mergers, the amount of information
in the financial" pages of the press is minimal. The
lecturer has been involved in 40 mergers, and came to
the conclusion that there must be an essential trust
and compatibility between the persons concerned.
The final lecture was given by
Mr. John
Gleeson,
Solicitor, Chairman of the Redundancy Appeals Tri-
bunal, on "The Redundancy Payments Acts of 1967
and of 1971". He first stressed the dismissal provisions
under section 9 of the 1967 Act. The five categories of
redundancy are set out in section 7 of the 1967 Act, as
amended by Section 4 of the 1971 Act as follows:
(1) When the employer has ceased to carry on busi-
ness.
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