Chapter 1 - Legal and regulatory framework Flashcards
What are the three sources of law IP’s need to be aware of?
Statue Law
EU Law
Case Law/Precedent
What are the four non-legal rules that IP’s need to be aware of?
Statement of Insolvency Practice (SIPS) - prepared by R3 (association of Business Recovery Professionals)
Technical releases - SIPs dealing with non pref and director employment claims were replaced by technical releases
Insolvency Guidance Papers - authorised by Joint Insolvency Committee
Joint Insolvency Code of Ethics
SIP1
Introduction to SIPs/Ethics
SIP2
Investigations by office holder in administrations and Insolvent Liquidations
SIP3
3.1 Individual voluntary arrangements (effective March 2023)
3.2 Company voluntary arrangements (effective April 2021)
SIP4
Disqualification of directors (withdrawn in October 2013 0 incorporated into SIP2)
SIP5
There is no SIP5
SIP6
Deemed consent and decision procedures (effective January 2018)
SIP7
Presentation of financial information in insolvency proceedings (effective April 2021)
SIP9
Remuneration of office holders
SIP12
Records of meetings
SIP13
Disposal of assets to connected parties in an insolvency process (effective April 2021)
SIP14
A receivers responsibility to preferential creditors
SIP15
Reporting and providing information on IPS functions to committees and commissioners (effective March 2017)
SIP16
Pre-packaged sales in administrations (effective April 2021)
SIP17
An administrator receivers responsibility for company’s records (effective May 2011)
Name the three roles of the Secretary of State
Responsible for amendment of the Insolvency Rules
Exercises function of a creditors committee where no committee exists
Applies for disqualification of directors under CDDA 1986
What is the primary role of the insolvency service?
To supervise those involved in the administrations of bankruptcies and compulsory liquidations
Name the four Recognised Professional Bodies (RPBs)
IPA - Insolvency Practitioners Association
ICAEW - Institute of Charted Accountants in England and Wales
ICA - Institute of Charted Accountants in Ireland
ICAS - Institute of Charted Accountants in Scotland
Each IP must be registered with an RPB as well as:
Provide security - general bond £250k and specific bond based on assets of company £5k to £5m
Not be bankrupt
Not be disqualified under CDDA 1986
Be an individual
Where the IP needs the creditors to make a decision, there are three options, what are they?
Deemed Consent
Creditors Decision Procedure
Physical Meeting
Deemed consent - what is time frame for notice, the percentage needed to object decision and what can it not be used for?
Rule15.6, S379B
Notice must not be less than 14 days from date of delivery of the notice.
If fewer than 10% in value object, the the decision is deemed made.
Cannot use for CVA, or for agreeing remuneration or if court decides that a creditors decision procedure needs to be used.
Where in a CLV or compulsory the decision is whether a replacement should be appointed after resignation of a liquidator, min of 28 days notice
Procedures that can be used for a creditors decision procedure and when would a physical meeting be called?
Correspondence
Electronic voting
Virtual meeting
Physical meeting will be held if 10% by value, 10% by number of creditors or 10 creditors request it.
When will a physical creditors meeting be held and what at the notice timeframes?
Physical meeting will be held if 10% by value, 10% by number of creditors or 10 creditors request it.
Request must be made either before convenor delivers notice of decision procedure, or within 5 business days after the notice.
If requested, the convenor must summon a meeting R15.6 no later than 3 business days from when the 10% threshold was met.
Administration - what is the notice period for a decision of creditors and who does notice need to be delivered to?
Minimum 14 days notice
Delivered to creditors who had claims against the company at the date when the company entered administration (except those who have subsequently been paid in full)
Administrative receivership - what is the notice period for a decision of creditors?
14 days
Sent to all creditors
CVL - what is the notice period for decision of creditors for appointment of liquidator in the below scenarios (including any decision made at the same time on the liquidators remuneration or the establishment of a liquidation committee)
i) Standard
ii) On conversion from an MVL
iii) On conversion from MVL when DC has been objected
3 business days
14 days on conversion from a members voluntary liquidation
7 days on conversion from a members voluntary liquidator where deemed consent has been objected to
Sent to all creditors
Creditors voluntary winding up or a winding up by the court - what is the notice period for a decision of creditors to consider whether a replacement should be appointed after a liquidators resignation?
28 days
Sent to all creditors
Winding up by court - what is the notice period for a decision of creditors to consider whether to remove or replace a liquidator (other than the creditors and the OF receiver 14 days 355 after a liquidators resignation)
14 days
Sent to the creditors and the OR
Creditors Voluntary Winding up or Winding up by the court - what is the notice period for other decisions other than appointing liquidator?
14 days
Sent to all creditors
Winding up by court - what is the notice period and who does it need to be sent to for decisions of contributories?
14 days
Sent to every person appearing (by company records or otherwise) to be a contributory
Proposed CVA - what is the notice period for a decision of creditors?
14 days, however
7 days for consideration or proposal where physical meeting requisitions.
Sent to all creditors
Proposed IVA - what is the notice period for a decision of creditors?
14 days
Sent to all creditors
Bankruptcy - what is the notice period for decision of creditors to consider whether a replacement should be appointed after the resignation of a trustee and who should notice be sent to?
28 days
Notice sent to creditors and the OR
Bankruptcy - what is the notice period for decision of creditors to consider removing trustee and who should notice be sent to?
14 days
Notice sent to creditors and the official receiver
Bankruptcy - what is the notice period for decision of creditors on appointment of a new trustee following removal of previous trustee (including any decision made at the same time on the establishment of a creditors committee) and who does notice need to be sent to?
7 days
Notice sent to creditors
Bankruptcy - what is the notice period for other decisions of creditors (not removing trustee/replacing trustee)?
14 days
Notice sent to creditors
Who commissions SIPs, who produces SIPs and who is responsible for their adoption?
Joint Insolvency Committe
R3 (The Association of Business Recovery Professionals)
RBP (Recognised Professional Bodies)
Official receiver is the officer of what?
the court
For how long after an officeholder has received their release are documents to be made available on the website?
2 months
