Frequently Asked Questions

Q. What are the powers of an Examiner?

A. The Examiner has the following powers:
  1. The Examiner has the same rights and powers which an auditor has in relation to the supplying of information and co-operation;
  2. The Examiner has the power to convene, set the agenda for, and preside at meetings of the board of directors and general meetings and to propose motions or resolutions;
  3. The Examiner is entitled to reasonable notice of, to attend and be heard at all meetings of the board of directors and all general meetings.The Act provides that the Examiner may certify liabilities of the company incurred during the protection period. Liabilities so certified are treated as expenses properly incurred under the Act.

Q. What are the powers of Directors whose company has entered examinership?

A. Unlike liquidations or receivership, the directors remain responsible for the day-to-day management of the company. The principal task of the Examiner is to examine the company's affairs and formulate a compromise or scheme of arrangement. In practice, the Examiner will work closely with the directors to re-assure creditors, employees and staff.

Restriction on payment of pre-petition debts

The payment of pre-petition debts is restricted by the Act, which provides that no payment may be made by a company, during the period it is under the protection of the court, by way of satisfaction or discharge of the whole or part of the liability incurred by the company before the date of the presentation of the Petition. However, there are two circumstances where payments in respect of the pre-Petition may be made: firstly, where the report of the independent accountant recommends that the whole or part of that liability should be discharged or satisfied, and secondly, where an application is made by the Examiner or any interested party for an order authorising the payment or discharge of the liability.

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