Chapter 1 - Legal and regulatory framework

Question 1

What are the three sources of law IP’s need to be aware of?

Answer 1

Statue Law
EU Law
Case Law/Precedent

Question 2

What are the four non-legal rules that IP’s need to be aware of?

Answer 2

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

Question 3

SIP1

Answer 3

Introduction to SIPs/Ethics

Question 4

SIP2

Answer 4

Investigations by office holder in administrations and Insolvent Liquidations

Question 5

SIP3

Answer 5

3.1 Individual voluntary arrangements (effective March 2023)
3.2 Company voluntary arrangements (effective April 2021)

Question 6

SIP4

Answer 6

Disqualification of directors (withdrawn in October 2013 0 incorporated into SIP2)

Question 7

SIP5

Answer 7

There is no SIP5

Question 8

SIP6

Answer 8

Deemed consent and decision procedures (effective January 2018)

Question 9

SIP7

Answer 9

Presentation of financial information in insolvency proceedings (effective April 2021)

Question 10

SIP9

Answer 10

Remuneration of office holders

Question 11

SIP13

Answer 11

Disposal of assets to connected parties in an insolvency process (effective April 2021)

Question 12

SIP14

Answer 12

A receivers responsibility to preferential creditors

Question 13

SIP15

Answer 13

Reporting and providing information on IPS functions to committees and commissioners (effective March 2017)

Question 14

SIP16

Answer 14

Pre-packaged sales in administrations (effective April 2021)

Question 15

SIP17

Answer 15

An administrator receivers responsibility for company’s records (effective May 2011)

Question 16

Name the three roles of the Secretary of State

Answer 16

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

Question 17

Name the four Recognised Professional Bodies (RPBs)

Answer 17

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

Question 18

Each IP must be registered with an RPB as well as:

Answer 18

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

Question 19

Where the IP needs the creditors to make a decision, there are three options:

Answer 19

Deemed Consent

Creditors Decision Procedure

Physical Meeting

Question 20

Deemed consent - what is time frame for notice, the percentage needed to object decision and what can it not be used for?

Answer 20

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

Question 21

Procedures that can be used for a creditors decision procedure and when would a physical meeting be called?

Answer 21

Correspondence
Electronic voting
Virtual meeting

Physical meeting will be held if 10% by value, 10% by number of creditors or 10 creditors request it.

Question 22

When will a physical creditors meeting be held and what at the notice timeframes?

Answer 22

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.

Question 23

Administration - what is the notice period for a decision of creditors and who does notice need to be delivered to?

Answer 23

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)

Question 24

Administrative receivership - what is the notice period for a decision of creditors?

Answer 24

14 days

Sent to all creditors

Question 25

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

Answer 25

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

Question 26

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?

Answer 26

28 days

Sent to all creditors

Question 27

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)

Answer 27

14 days

Sent to the creditors and the OR

Question 28

Creditors Voluntary Winding up or Winding up by the court - what is the notice period for other decisions other than appointing liquidator?

Answer 28

14 days

Sent to all creditors

Question 29

Winding up by court - what is the notice period and who does it need to be sent to for decisions of contributories?

Answer 29

14 days

Sent to every person appearing (by company records or otherwise) to be a contributory

Question 30

Proposed CVA - what is the notice period for a decision of creditors?

Answer 30

14 days, however

7 days for consideration or proposal where physical meeting requisitions.

Sent to all creditors

Question 31

Proposed IVA - what is the notice period for a decision of creditors?

Answer 31

14 days

Sent to all creditors

Question 32

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?

Answer 32

28 days

Notice sent to creditors and the OR

Question 33

Bankruptcy - what is the notice period for decision of creditors to consider removing trustee and who should notice be sent to?

Answer 33

14 days

Notice sent to creditors and the official receiver

Question 34

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?

Answer 34

7 days

Notice sent to creditors

Question 35

Bankruptcy - what is the notice period for other decisions of creditors (not removing trustee/replacing trustee)?

Answer 35

14 days

Notice sent to creditors

Question 36

Who commissions SIPs, who produces SIPs and who is responsible for their adoption?

Answer 36

Joint Insolvency Committe

R3 (The Association of Business Recovery Professionals)

RBP (Recognised Professional Bodies)