Almost a decade ago, I sadly found myself in the middle of an examinership. I had covered dozens of them during my career, outlining how and why various companies had sought bankruptcy from creditors. This one was different, however. I was working for what was then known as The Sunday Business Post. The title had collapsed into insolvency after its owner, Thomas Crosbie Holdings, ran out of reserves and went into receivership.

It was a torrid period, resulting in write-downs and redundancies. Ultimately, the newspaper survived after being bought out by a new owner. But it was a lesson in life. The paper was so close to full-scale collapse that I dramatically reframed how I reported on company failures in Ireland.

The process of examinership saved the paper. But, having seen it from the inside, it also showed how expensive and delicate the process could be. At the time, big companies could manage to restructure their balance while small companies could not.

Since then, the government has sought to help with the introduction of the new Small Companies Administrative Rescue Process (Scarp). Essentially this is examinership for small companies – designed to be outside of the remit of the High Court.

So how is it doing? JW Accountants has been tracking the success (or otherwise) of the process since it was launched. As Rosanna reported last week, more than 70 per cent of the cases concluded have resulted in creditors approving a rescue plan, with the process helping to save 367 jobs.

The firm said there had been 15 rescue plans formulated and approved by creditors of the companies resulting in successful Scarp cases. However, it was also aware of two approved rescue plans where notices of objections have been received.

“We would expect to see an increase in the number of Scarps, with the number of Scarps likely to account for five per cent plus of all insolvencies. Based on an estimate of 1,000 insolvencies in 2023 this would equate to 50-plus Scarp cases,” according to JW Accountants.

They are not the only ones tracking the usage of Scarp. Both PwC and Deloitte have been monitoring the insolvency statistics in Ireland in recent years. I reached out to both.

Ken Tyrell, a partner with PwC, told me that during the fourth quarter of last year, almost one in ten of all insolvencies were either a Scrap or an examinership. “This is a very positive development and the highest utilisation of company rescue processes in Ireland since the aftermath of the global financial crisis. We do expect to see more use of Scarp during 2023 and could see a multiple of the 23 Scarps initiated to date,” he said. 

“With approximately 70 per cent success rate to date, it is running a bit lower than historic examinership success rates but the process is only getting started and we’ll have a better idea on this at the end of 2023.” 

Tyrell added: “In addition to restructuring existing debts, larger Scarps and examinerships may need fresh capital from investors or lenders to not just exit the restructuring process but to be really set up for success in the future.”

David Van Dessel, a partner with Deloitte, said that there are undoubtedly several factors influencing the present take-up, particularly around awareness of the process.

“A dedicated marketing campaign specifically targeting micro businesses would be a real benefit in highlighting the existence of the process. Also, with this initial high success rate, I think we can look forward to seeing Scarp becoming more widely used by SMEs, with resulting jobs being saved in our local communities, but that is in the hands of SME Directors,” he said.

“The Government has played its part by providing struggling SMEs with the Scarp option and it is now incumbent on the business community to ‘act early’ where they are facing financial difficulties and to deal with their finances in a pragmatic and realistic manner.”

This was backed up by Graham Kenny, a partner with the law firm Eversheds Sutherland. Kenny has worked on a high volume of Scarp cases and told me that the number of companies availing of Scarp remains unusually low. “Despite the fact that countless companies throughout Ireland continue to struggle with unsustainable debt, remarkably only 15 companies have actually successfully completed the process,” he said. 

“The issue of such low uptake is not necessarily the process itself, but awareness of what it can do. For Scarp to take hold, directors need to know it really can save their company. This in turn requires professional advisory bodies to drive Scarp’s message to every town across the state, as that is where these companies trade and where they will seek advice.

“Since the commencement of Scarp, 400 jobs in insolvent small companies have been saved. While not perfect, Scarp works. That is the message directors of small companies across the country need to hear.

Ken Fennell has been working in the insolvency industry for decades and is now a managing director with Interpath Advisory. His view was informative.

“It’s worth noting that 50 per cent of all Scarps to date commenced at the end of October/November so take up of the process is building momentum. It will be interesting to see if this trend continues in 2023 but I expect it will,” he said.

He added: “In terms of the industry sectors where Scarp is being utilised, it appears to have a relatively even spread, although retail and hospitality make up nearly 50 per cent. Another interesting consequence of the Scarp process can be seen in the low uptake of the examinership process. There were just ten examinerships in 2022 and it is likely that the Scarp process is seen as a more viable alternative

“Finally, one of the initial concerns surrounding the process was Revenue’s ability to opt out of the process by excluding debt but it appears to date Revenue have been supportive of Scarp whereby companies are up to date with tax filings.”

The system is not perfect. But, hopefully, it will help more and more struggling but potentially viable companies over the coming years. 


Meanwhile, Thomas last week reported on the inside story of Nestlé’s decade-long $518 million battle with Revenue. When the Swiss food multinational acquired Pfizer’s infant formula business in 2012, it claimed the cost of unwinding intercompany debt as a tax-deductible expense. The Tax Appeals Commission has now decided the case. It is a great story.

The government must decide whether to scrap or retain the special nine per cent Vat rate for the hospitality industry imminently. Economic theory says it should be abolished and replaced with more targeted supports. Political reality, however, suggests otherwise, according to Stephen Kinsella.

GridBeyond is an Irish company helping businesses around the world manage their energy input using a combination of consumption management, on-site equipment such as batteries and solar panels, and supplier contracts. Its chief executive Michael Phelan gave Thomas some tips on how to navigate the volatile electricity market and discusses the impact of the ongoing energy crisis on the much-needed transition to low-carbon power.

The jury is now in, says John Looby who argued that the “shambolic collapse of FTX and the associated fallout has settled the argument. Cryptocurrencies are nonsense. Regulators should have nothing to do with them. Neither should investors”.