Companies Act 2014 section 537

Repudiation of certain contracts

Section 537 deals with the power of a company in examinership to affirm or repudiate certain uncompleted contracts when proposals for a compromise or scheme of arrangement are being formulated.

• A company formulating a scheme of arrangement may, with court approval, affirm or repudiate any contract where performance beyond mere payment remains outstanding on both sides.
• Any party who suffers loss or damage from such repudiation becomes an unsecured creditor for the amount of that loss or damage, and the court may hold a hearing to determine the amount, which then becomes a judgement debt.
• If the examiner is not a party to the court application for affirmation or repudiation, the company must serve notice on the examiner, who may appear and be heard at the hearing.
• The court has broad discretion when approving an affirmation or repudiation to make whatever orders it considers necessary to give full effect to its decision, including orders concerning notice to or the rights of affected parties.

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