Success rate for examinerships at 75% in first half of the year -survey
Pamela Scott, Monsoon and The Sunday Business Post are some of the names that have successfully used the process
The Sunday Business Post successfully emerged from the examinership process last month. Photograph: Brenda Fitzsimons / IRISH TIMES
Three out of every four companies that concluded an examinership process in the first half of the year exited successfully, saving 680 jobs in the process according to new statistics.
The Hughes Blake SME Examinership Index shows that the examinership process continues to be a successful vehicle for saving small and medium businesses that experience challenges, and a total of eleven SMEs successfully emerged from examinership in the first half of this year.
Three-quarters of troubled firms were saved in the process, and demand for examinership is increasing, with twice as many firms concluding the examinership process in the first half of 2013 compared with the same period last year. The increased number of firms coming through the process this year indicates both recessionary conditions which are afflicting the Irish economy once again and the growth in popularity of a mechanism that has been proven to be effective. Last year in Q2, just five companies concluded the examinership process. This year, eleven concluded the process within the quarter.
“The increasing popularity of the mechanism is no doubt largely due to continuing difficulties in the state of the Irish economy. However, it is also attributable to the fact that the process has been shown to be very successful at saving businesses. Some well-known companies will continue to trade as a result of the process including Pamela Scott, Monsoon and The Sunday Business Post,” says Neil Hughes, managing partner at Hughes Blake.
More Leinster based firms use the process than those based elsewhere in the country. According to Neil Hughes, managing partner at Hughes Blake, this is not unexpected as the High Court remains the only place where examinerships can be carried out
“Currently it remains challenging for business owners and managers to try to run the day to day operations of their business, while also participating in applications to the High Court. We need to remove this obstacle from SME firms around Ireland as soon as possible in order to encourage other viable businesses to use examinership as a route to survival,” he said, adding that once the process moves to the Circuit Court, pending the enactment of the Companies Bill 2012, there should be more of a geographic spread.
The survey also points to a decline in the cost of the process, with the cost of a petition for an SME now as low as €7,000.