The appointment of an examiner to companies in financial difficulty was introduced in Cyprus with the Companies (Amending) (No.2) Law of 2015- Examinership N62 (I)/ 2015.
Examinership legislation is based on the respective provisions of the Irish Companies Act 1990, where this restructuring tool has been implemented successfully and contributed to the continuation of hundreds of business and the maintenance of thousands of jobs.
Examinership reflects the pro-active self-help mechanisms of U.S. Chapter 11 type protection afforded to companies.
The Court protection
The activities of a company which is set under the protection of the Courts are subject to the scrutiny of a Judge.
The system is almost self-regulating because with few licensed insolvency practitioners operating within the area, their integrity as officers of the Court is of paramount importance. Where the assigned Judge finds that the highest standards have not been met by the company or the examiner or that there has been any failure by petitioners for the protection of the Court to disclose all material facts, the Courts may remove the company from the protection formerly afforded to it.
t the very outset, this analysis does not purport to set out an exhaustive statement of the law or practice in examinerships, insolvency or corporate recovery.
It is meant to highlight certain circumstances whereby the owners and management of companies should consider the appointment of an examiner as potentially a positive step for both the company and its creditors, following a period of difficult trading conditions.