High Court refuses “unprecedented” application to appoint examiner

In what was deemed an “unprecedented” application, the High Court recently refused to confirm the appointment of an interim examiner to a special purpose vehicle incorporated to develop commercial property. The Court determined that the company was not the “type of company for which examinership was designed”. The decision highlights some of the factors that the Court will consider when exercising its discretion to confirm the appointment of an examiner. Our Restructuring & Insolvency team analyses the case.

What you need to know

• The High Court[1] refused an application by KC Capital Property Group Limited (KC)[2] for the appointment of an examiner.
• KC is a special purpose vehicle (SPV) established to facilitate a property investment.
• While the evidence was contested, the Court assumed there was a reasonable prospect of the company’s survival within the available timeframe.
• The Court instead focused on how it should exercise its discretion in the circumstances.
• The application was refused for a number of material reasons, including:
  • KC was not the type of entity the examinership regime is intended to protect, as it was not a “real enterprise with real jobs”.
  • KC failed to meet the required standard of uberrimae fidei (utmost good faith).

Background

KC is an SPV incorporated to facilitate a property investment. KC borrowed funds from Fairfield REF ECS II Gen DAC to buy a site in Dublin and develop a commercial property. Its only two employees were the two investors behind the property investment[3].

KC ran into financial difficulties and became insolvent, owing approximately €54 million to Fairfield, its only secured creditor. Fairfield called in its loan and, on 19 December 2025, appointed joint-receivers. In response, on 22 December 2025, KC filed a petition in the Circuit Court and an interim examiner was appointed on that date.

Mr Justice O’Connor of the Circuit Court refused to confirm the appointment of the interim examiner in February 2026. The matter came to the High Court by way of a de novo appeal[4]. Mr Justice Twomey affirmed the Circuit Court decision, concluding that the interim examiner’s appointment should not be confirmed.

Analysis

Mr Justice Twomey identified some nine cumulative reasons as to why the Court should exercise its discretion against confirming the examiner’s appointment. We will focus on the three most prominent ones.

Not the right “type of company for which examinership was designed”

Central to the Court’s judgment was its finding that KC, as an SPV incorporated for the specific limited purpose of holding property and financing its development, with its only two employees being its shareholders, was not “the type of company for which examinership was designed.”

The Court noted that this was an “unprecedented” application and there were no authorities where an SPV engaged solely for property investment had previously successfully availed of an examinership application.

The Court examined the relevant and well-established legal principles[5], which provide that the primary purpose and intent of examinership is to enable “an enterprise to continue in existence, for the benefit of the economy as a whole” and to enable as many of the jobs at stake to be maintained “for the benefit of the community.”[6]

Applying these principles to the facts before the Court, it noted as follows:

“It is difficult to see how a pure property investment through a special purpose company, could possibly be regarded as an enterprise which it was important for the community to continue, particularly where the only jobs at stake are the jobs of the people, who, however it happened, failed to ensure that their company complied with its loan repayment obligations.”

The Court drew a clear distinction between the roles of the two shareholders, whom it categorised as "incidental" employees, and the more substantive workforce genuinely at risk. It contrasted their position with that of the 70 employees of the primary contractor, as well as the numerous individuals employed by the various suppliers and sub-contractors whose livelihoods depended on the project’s continuation. However, the contractor actively opposed the appointment of an examiner, arguing, and the Court agreed, that the examinership would undermine rather than preserve employment. In these circumstances, the Court noted that:

“It is hard to see how this clear financial consequence of the delay in the building being available for rent could be regarded as positive for the ‘general economic welfare of the community.’”

In summary, the Court described KC as an SPV incorporated “for a very limited purpose,” which was to hold title to a property that was to be developed. It was intended to act as a conduit to receive funds from a lender and then channel repayments back to the lender. Its only employees were its two investors. This, in the Court’s view, was “a long way from being” a “real enterprise with real jobs” or otherwise a company that should be granted protection through receivership on the basis that it would save “as many as possible of the jobs which may be at stake.”

Utmost Good Faith

The Court was also persuaded by the conduct of KC in the present application. Mr Justice Twomey found that KC did not meet the required standard of utmost good faith when filing its application. This obligation requires an ex parte applicant to present all relevant information to the Court, including material that may be adverse to its case. KC failed to provide the Court with a previously obtained valuation report. This omission was significant, because the report that KC presented revealed “huge differences” in valuation from the previous report.

The Court also noted that KC had transferred, without authorisation, approximately €50,000 of funds beneficially owned by Fairfield to pay unsecured creditors. According to submissions, this transfer occurred “within hours” of Fairfield’s demand letters. In the Court’s view, this transfer was “… an apparent attempt by KC Capital to take what is, in effect, Fairfield’s money before a freeze might be put on that account.” In other words, prior to applying to appoint interim examiner, KC had “already taken the law into its hands and removed money to which Fairfield would be entitled.”

KC argued that the funds were transferred to pay other creditors with the hope that these payments would bolster relationships with “key contractors and legal advisors” and ensure the progression of the construction. However, this “well intentioned” desire to pay creditors for the benefit of the overall project did not persuade the Court. It noted that it was still not an acceptable justification for removing money beneficially held by Fairfield, a secured creditor.

The Court was also not persuaded that examinership was necessary, noting that the joint receivers could complete the development and continue any ongoing litigation if appropriate.

Comment

This decision, while not a significant departure from established principle, is still a useful addition to the body of Irish examinership case law.

The Court was careful to confine its analysis to the specific, and, as it acknowledged, unprecedented facts of the application before it. Of significance were the cumulative factors that swayed the Court to exercise its discretion to refuse the appointment, including what it deemed to be serious breaches of the applicant’s obligations to come to the Court with the utmost good faith. It is a stark reminder to practitioners that the very short time frames within which ex parte applications to appoint interim examiners are often required to be made, for example where a receiver has been appointed, cannot excuse the omission of materially relevant information in the application.

The decision should not be read as shutting the door on SPVs or companies with modest employee numbers from availing of examinership. Rather, it is a reminder that practitioners ought to very carefully consider if it can be demonstrated to the Court’s satisfaction that the company in question is a “real enterprise with real jobs” and that appointing an examiner would, on all of the facts of a particular case, be for the “general economic welfare of the community”.

For more information and expert advice on restructuring and insolvency matters, please contact a member of our Restructuring & Insolvency team.

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[1] In the Matter of KC Capital Property Group Limited, KC Capital Property 182 Limited and KC Capital Property 185 Limited [2026] IEHC 115, Twomey J., 6 March 2026

[2] And two other related companies

[3] The Court observed that it “exists purely for the purpose of holding legal title to a site and taking a loan for its development and the repayment of that loan” – see para 71.

[4] A de novo appeal is a complete re-hearing of a case by a higher court or tribunal, disregarding the previous decision.

[5] See Re Traffic Group [2008] 3 IR 253; Re Kitty Hall [2017] IECA 247.

[6] Re Traffic Group [2008] 3 IR 253, para. 5.5.