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ARTICLE · 25 JUNE 2021

SCARP - The Creditor's Perspective

Grant Thornton
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Small Company Administrative Rescue Process (SCARP) is a new restructuring process available to SMEs and is likely to negatively impact creditors in relation to funds outstanding as at the date...

IrelandCorporate/Commercial Law
Stephen Tennant
Stephen Tennant
Nicholas O’Dwyer
Nicholas O’Dwyer
Aengus Burns
Aengus Burns

Small Company Administrative Rescue Process (SCARP) is a new restructuring process available to SMEs and is likely to negatively impact creditors in relation to funds outstanding as at the date the process commences. The creditor retains their legal right to support or reject the proposal, however, the SME only needs 50% of the value of creditors to support the process for the proposal to proceed. It is critically important that creditors partake in the process as demonstrated below

How does SCARP impact your debt?

  • Unsecured Creditor  – Likely write down of debt
  • Excludable Creditor  – Likely write down of debt, subject to excludable creditor agreeing to the process
  • Secured Creditor; Mortgage security and floating security  – secured assets may, in certain instances, be disposed of but the secured creditor's position is not prejudiced 

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