Examinership helped to save 1,251 jobs this year

The economy may be in recovery mode but Irish companies are continuing to turn to examinership as they seek to deal with legacy issues such as unsustainable leases and debt.

New figures from chartered accountants Hughes Blake, a firm which provides examinership services, indicates that 1,251 jobs were saved through the process this year, up slightly on the 2014 figure of 1,243. Among those companies to successfully exit examinership this year were Best Menswear and Mothercare Ireland.

In 2013, just 832 jobs were saved through the process, the figures show.

During the fourth quarter of 2015 some 380 jobs were saved, the highest number seen this year and a surprise given that most examinerships typically tend to occur in the first half.

Examinership is a corporate rescue mechanism that allows insolvent companies that have a reasonable prospect of survival to seek court protection from creditors.

The success rate of examinerships - where the company moves through the process and emerges on the other side to continue to trade - remains high at 83 per cent this year, compared to 90 per cent for 2014.

"On the surface the boom may be back, but not all SMEs are in a position to benefit from the upturn. Through a combination of low interest rates and lenders' unwillingness to address corporate insolvency issues, SMEs with distressed finances have continued to trade during the recession. Now that we have come out of that period and consumers are spending again, underlying problems unfortunately exist and businesses that have survived the recession may not survive the recovery," said Neil Hughes, managing partner at Hughes Blake.