Examiner’s appointment
General
The company debt restructuring framework was established and is regulated through the examiner’s Appointment mechanism. The mechanism is activated when the company or a creditor or any potential or future creditor or the members of the company or its guarantor files a petition to Court requesting that the company is placed under the protection of the Court. The petition also includes a suggestion of a private examiner. It is accompanied by an expert’s report (company auditor) with regard to the financial standing of the company and suggestions for a settlement and funding plan.
Once the petition is filed and the examiner’s appointment is approved, the company is placed under the protection of the Court for a period of 4 months, with a right of extension. For as long as the company is under the protection of the Court, it may not be wound-up, no receiver may be appointed and no creditor may bring an appeal against it.
The examiner should submit a report to the Court, including among others the suggestions presented before the required Meetings, the outcomes of the meetings, as well as their suggestions for the survival of the company, within 60 days from their date of appointment.
The Court may confirm the suggestions or confirm them with amendments or refuse to confirm them. If the suggestions are verified by the Court, they become legally binding for all parties involved and must enter into force within 30 days from their confirmation.
When the settlement plan enters into force, the company is no longer protected by the Court and the examiner is dismissed.
Requirements
The Court appoints an examiner for a company based on the following criteria:
- the company is or will probably be unable to pay off its debts;
- there is no resolution or order for the company’s winding-up;
- there is a reasonable survival prospect for the company (as a whole or for any part of it) as an active economic unit.
The Court does not confirm any suggestions unless:
- At least one class of creditors, whose interests are not affected by the implementation of the suggestions, has accepted the suggestions; and
- The suggestions do not adversely affect the interests of any interested party.
General obligations:
- The petitioner should submit a relevant notification to the Insolvency Department within 3 months from the date of filing the petition for protection and the appointment of an examiner.
- The examiner should submit a copy of their appointment order to the Insolvency Department, within 3 days from their appointment.
- The examiner should ensure the publication of their appointment in the Official Gazette of the Republic of Cyprus within 21 days from their appointment.
- The examiner should submit a copy of any order issued by the Court to the Insolvency Department, as soon as the suggestions are confirmed by the Court.
- The examiner should ensure the publication of the notification of service in the Official Gazette of the Republic of Cyprus, within 14 days from the service of each order to the Insolvency Department.
- The Insolvency Department maintains a public register published on its official website, including the companies for which an examiner’s appointment application has been filed and/or for which an examiner has been appointed.
