THOUSANDS of jobs will go the way of the dodo if a new affordable system, specifically tailored to the needs of small businesses, is not put in place before the Covid pandemic ends.
That’s according to Limerick Fianna Fáil TD Willie O’Dea, who raised the issue of Examinership and SMEs with Tánaiste Leo Varadkar in the Dáil last week.
“It’s absolutely extraordinary that insolvencies only rose one per cent last year. However, the blunt facts mask the true situation. Many companies, particularly SMEs are surviving in a zombie like state due to Government supports and debt forbearance,” Deputy O’Dea claimed.
“This raises the bleak and frightening prospect that there will be a tsunami of redundancies particularly among small and medium sized companies once the situation changes.
“The Government has already spent hundreds of millions keeping businesses afloat. For every small company that goes under, a part of that money will have been wasted.
“Since 1990, a system called Examinership has been in place to enable companies in financial difficulty to avoid going into liquidation by adopting a programme of restructuring, accepted by creditors and agreed by the Court.
“Two out of every three examinerships succeed thereby enabling thousands of jobs and livelihoods to be saved. However, only a very small number of SMEs have been able to use the examinership process. This is because the costs are prohibitive due to the fact that it has to be dealt with by the High Court,” he explained.
O’Dea went onto say that a new affordable system, specifically tailored to the needs of SMEs, needs to be established urgently and be in place before the pandemic supports end.
”A model is being proposed by a company law advisory group and a version of what is recommended by this group needs to be urgently passed into law. Otherwise thousands of jobs will go the way of the dodo!” he declared.