Even now, with a stronger than expected recovery, 10 per cent of Irish SME bank loans are non-performing, while another 29 per cent are classified by lenders as being at high risk of distress. What might an ideal insolvency regime look like in the face of such a build-up in liabilities, along with the existence of a complex combination of creditors?
Well, conceptually at least, we think it would look a lot like the Small Company Administrative Rescue Process – or SCARP – introduced by the government last year. 4 The key policy issues we see will therefore revolve around the operation and implementation, rather than design, of the scheme.