PART XI

Appointment of Credit Union Administrator

137. —(1) The Registrar may present a petition to the Court for an order (in this Part referred to as an “administration order”) for—

(a) the administration of a credit union; and

(b) the appointment of a person nominated by the Registrar to be the administrator of the credit union;

and may do so notwithstanding that there is or may be another remedy or course of action available to him in relation to that credit union.

(2) On a petition under subsection (1), the Court may make an administration order if it considers—

(a) that the manner in which the business of the credit union is being or has been conducted has failed to make adequate provision for its debts, including contingent and prospective liabilities, or

(b) that the business of the credit union is being or has been so conducted as to jeopardise or prejudice the rights and interests of its members, or

(c) that the credit union has become unable to comply with the requirements of this Act in a material respect,

and that the making of an administration order would assist in the re-establishment, in the public interest, of the proper and orderly regulation and conduct of the credit union.

(3) The administrator of a credit union—

(a) shall take over the management of the business of the credit union; and

(b) shall carry on that business as a going concern with a view to placing it on a sound financial footing; and

(c) shall have in relation to the credit union all such powers as may be necessary for or incidental to his functions in relation to the credit union, including the sole authority over, and direction of, all officers and voluntary assistants of the credit union.

(4) The administration of a credit union under this Part shall be deemed to have commenced at the time of the presentation of the petition for the administration order.

138. —(1) At any time after the presentation of a petition under section 137 (1) (and before the making of an administration order), the Court may—

(a) upon the ex parte application of the Registrar, and

(b) upon prima facie proof by affidavit of one or more of the matters mentioned in paragraphs (a) to (c) of subsection (2) of section 137 , and

(c) without advertisement or notice to any person,

appoint such person as may be nominated by the Registrar to act as provisional administrator of the credit union pending the hearing of the petition.

(2) Unless the context otherwise requires, any reference in the following provisions of this Part to an administrator of a credit union includes a reference to a provisional administrator appointed under this section.

(3) If—

(a) an appointment of a provisional administrator of a credit union is made under this section, but

(b) on the hearing of the petition no administration order is made,

the appointment of the provisional administrator shall be annulled; but the annulment shall not invalidate any act done or other function performed by him as provisional administrator.

(4) Where the appointment of a person as provisional administrator of a credit union is annulled under subsection (3), he shall nevertheless be entitled to be paid out of the assets of the credit union all the costs, charges and expenses properly incurred by him as provisional administrator, including such sum as the Court may fix for his remuneration, and may retain the amount of those costs, charges and expenses out of the assets of the credit union.

139. —(1) For as long as the administrator of a credit union stands appointed under this Act, the following provisions shall have effect—

(a) no proceedings or resolution for the winding up of the credit union shall be commenced or passed without the prior sanction of the Court;

(b) no receiver over any part of the property of the credit union shall be appointed without the prior sanction of the Court;

(c) no attachment, sequestration, distress or execution shall be put into force against any part of the property of the credit union without the prior sanction of the Court;

(d) the words “under administration” shall be used in relation to the name of the credit union in all circumstances in which the words “in liquidation” would fall to be used in relation to the name of a company being wound up by the Court;

(e) the functions of the administrator may be performed by him with the assistance of persons appointed or employed by him for that purpose;

(f) all functions which are vested in the directors or in a principal Committee of the credit union (whether by virtue of its rules or by law or otherwise) shall be performable only by the administrator and all such powers of the credit union as are exercisable by a general meeting of the credit union shall be exercisable only by the administrator and that exercise shall be subject to the sanction of the Court;

(g) the administrator may apply to the Court to determine any question arising in the course of the exercise of the administration of the credit union;

(h) the administrator may resign or, upon the application of the Registrar, may be removed by the Court for cause shown; and

(i) a vacancy in the office of administrator may be filled by the Court upon the nomination of the Registrar.

(2) Except as provided by this section, the business of a credit union in respect of which an administrator has been appointed shall be continued without interruption as a going concern, and no contract (including a contract of employment or service), policy, transaction, bank account or bank mandate, right, title, claim, debt, proceeding or obligation of the credit union or right, claim or proceeding against the credit union shall be avoided, cancelled, stayed or otherwise affected by reason only of the appointment of the administrator or the existence of an administration order.

(3) Where an administrator is appointed in respect of a credit union—

(a) the costs and expenses of the performance of his functions and his remuneration shall be paid, and

(b) he shall be entitled to be indemnified in respect of the costs, expenses and remuneration referred to in paragraph (a) and to retain them from time to time,

out of the revenue of the business of the credit union or the proceeds of the realisation of the assets (including investments) or other funds available to the credit union.

(4) On the application of the administrator of a credit union, the Court shall by order fix the amount, or the basis of calculation of the amount, of the costs, expenses and remuneration of the administrator; and such an order may extend to a period prior to the date of the making of the order.

(5) Within six weeks of each anniversary of his appointment (or at such other times as the Court may direct) the administrator of a credit union shall deliver to the Court a summary of the sums received or retained by him in each year for the costs and expenses of the administration and for his remuneration.

(6) Within four weeks of his appointment, and within four weeks of each anniversary of his appointment, the administrator of a credit union, in exercise of the power of the board of directors under section 79 (1), shall convene a special general meeting of the credit union at which he shall report to the members on his work and plans as administrator of the credit union.

140. —(1) The administration of a credit union and the appointment of an administrator pursuant to an administration order shall terminate—

(a) upon the making of an order for the winding up of the credit union concerned; or

(b) upon the making of an order under Part XII for the appointment of an examiner to the credit union concerned; or

(c) upon the making of an order by the Court, in accordance with subsection (2), for the termination of the administration.

(2) The Court shall not make an order for termination of the administration of a credit union except—

(a) on the application of the Registrar or of the administrator with the approval of the Registrar; and

(b) in circumstances where the Court considers—

(i) that, if the administration is terminated, the business of the credit union will not be so conducted as to jeopardise or prejudice the rights and interests of its members and will continue to be in all other respects on a sound financial footing; and

(ii) that it would be unjust and inequitable not to make the order.

141. —(1) The whole or any part of any proceedings under this Part, or an appeal in relation thereto, may be heard otherwise than in public if the Court considers that the interests of the credit union concerned or its members or creditors or the public interest so requires.

(2) If at any time no rules of court in respect of the making of an administration order under this Part are in force, then, subject to section 138 (4) and subsections (3) and (4), the provisions of Order 74 of the Rules of the Superior Courts (S.I. No. 15 of 1986), or any rules of court for the time being amending or replacing that Order, shall apply with any necessary modifications.

(3) Unless the Court otherwise directs—

(a) a petition under section 137 (1) shall be served only on the credit union; and

(b) on the hearing of such a petition, only the Registrar and the credit union concerned shall be entitled to be heard.

(4) In so far as the provisions of any such Order or other rules of court as are referred to in subsection (2) relate, in the case of an official liquidator, to the giving of security, the filing of accounts, the lodging of monies to a bank account or the fixing of the remuneration of the liquidator, those provisions shall not apply in the case of an administrator.