What is SCARP - Small Company Administrative Rescue Process?

Small Company Administrative Rescue Process (SCARP) officially commenced on 7th December 2021.

The process provides a useful rescue tool for SME’s who are facing temporary insolvency. It gives them an affordable option to restructure through a combination of a write-down of debt and new investment. SCARP is based on the key components of the examinership process but with some important differences such as the elimination or reduction of the requirement for court intervention making it more cost-effective, accessible and indeed a quicker process. 

Who qualifies for SCARP?

The proposed legislation restricts the process to small companies which comprises up to 98% of companies in Ireland and are defined by companies who meet two of the following three criteria:

  • Turnover does not exceed €12 million
  • The balance sheet total does not exceed €6 million
  • The average number of employees does not exceed 50

This captures approximately 98% of all Irish businesses and so it is expected that there will be significant uptake following its implementation and the withdrawal of Covid 19 government supports.

Process overview


  • Process Advisor engaged to complete Process Advisory Report
  • Pre Process Planning – SOA, projections, conditions for survival

Day 1

  • File notice with CRO, Court and Iris Oifigiuil
  • Give notices to employees, members, Revenue & creditors

Day 5

  • Further notice to creditors, employees, Revenue
  • Issue notification to landlords

Day 12

  • Reminder notice to any creditors who have not engaged
  • Excludable creditors have 14 days to opt-out

Day 42

  • Issue notices for meetings of members and creditors including a copy of Rescue Plan

Day 49

  • Rescue Plan filed with Court once approved
  • Process Advisor must report to DPP / ODCE if any offence relating to the Company is identified

Day 70

  • Rescue Plan becomes binding if no objection filed within 21 days
  • Issue notification of approval to interested parties, CRO and Court

Key differences to examinership



Available to all companies

Small/micro companies only

Court applications & oversight is required

Overseen by the Process Advisor

Automatic stay on proceedings

No automatic stay on proceedings

Timeline 100 – 150 days

Timeline 70 days

No excludable debt

Revenue / State creditors may opt-out

Court application to approve scheme

Rescue Plan approved at creditors meetings

Automatic entry into Liquidation if the scheme fails

Liquidation is not automatic if the scheme fails

Court applications

SCARP is designed to avoid interactions with Court and it is possible to conclude the process without court applications. The following applications are likely to be most common:

  • A stay on receivership and provisional liquidation appointments. In order to do so, they must be able to demonstrate to the court that the Company has a reasonable prospect of survival.
  • A stay on proceedings that were live at the date of commencement.
  • Application to repudiate a lease. This is only likely to arise if the landlord contests the repudiation, otherwise, repudiation will be approved when the Rescue Plan is filed with the court.
    • The Process Advisor must notify the landlord of intention to repudiate within 10 days.
    • Consideration must be given to any proposals/modifications put forward by the landlord.
    • Notify the landlord of intention to include a provision repudiating the lease in the Rescue Plan and inform them of their right to participate at the meeting or file an objection.
  • Creditor objection to the Rescue Plan.
    • The creditor must set out the grounds of the application in court which must have been specified in advance in a notice of objection. The grounds must include unfair prejudice, inequitable or put forward for an improper purpose.
    • Where a creditor files a notice of objection the burden of proof is on the Process Advisor which ensures that the scheme cannot fail by simply lodging an objection.
    • If the objection is upheld, the scheme must be modified otherwise it will fail.
    • If the scheme is objected to but the Process Advisor can prove that the creditors would fair worse under a liquidation scenario it is unlikely that the Court would uphold the objection.
    • If the objection is dismissed the Rescue Plan comes into effect immediately

Key observations and considerations


  • Short timeline
  • Detailed planning critical
  • Key considerations
    • Up to date financial information
    • Projections
    • Tax compliance in order?
    • Attitude of creditors – excludable?
    • Understanding of funding requirement during process (pre-process liabilities & working capital during process)
    • Conditions necessary for survival
    • Likely investment amount
    • Secured lender

Creditor engagement

  • Communications – timely and regular
  • Open and transparent dialogue
  • Illustrate benefits of rescue plan to creditors
  • Rescue Plan must be capable of defence in the event of objections

Excludable creditors 

  • Revenue and other state creditors have the ability not to participate in the process.
  • Creditors must notify the PA of their intention to ‘opt out’ within 14 days of being given notice
  • Sufficient grounds for objection
    • History of non-compliance
    • Ongoing revenue audit or appeal to a tax liability
  • Impact on Rescue Plan?

Court jurisdiction

  • Circuit Court V High Court
  • Cost v risk
  • Timing

Onerous contracts

  • Can be repudiated
  • Notice to and from landlord
  • Will involve court engagement


  • Rescue Plan does not affect
  • Guarantor must be afforded the opportunity to attend and vote at creditors meeting if the Bank want to rely on guarantees

For more information get in touch

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