Module 2 - Liquidator / Liquidation Committee / Remuneration

Question 1

What is the Creditor Order of Priority?

Answer 1

Fixed Charge Creditors;
IP Fees;
Preferential Creditors (employees);
Secondary Preferential Creditors (HMRC 1st Dec 2020);
Floating Charge Creditor;
Unsecured Creditors;
Shareholders

Question 2

Who is the Liquidator’s duty to?

Answer 2

Creditors

Question 3

4 x Duties of a Liquidator?

Answer 3

Principal;
Ethical;
SIP Duties;
Statutory Duties

Question 4

4 Things to Consider Pre Appointment?

Answer 4

Ethics;
Staffing / Capability;
Money Laundering;
Qualified to Act

Question 5

3 Ways a Liquidator leaves office?

Answer 5

Remove;
Choice (retirement / vacation);
Death

Question 6

What is Removal in CVL?

Answer 6

Creditors decide they no longer want a Liquidator in power.
Decision procedure summoned for the purpose

Question 7

What is Removal in WUC?

Answer 7

Removal by Court Order or Decision Procedure

Question 8

What is Retirement / Vacation in Liquidations?

Answer 8

Creditors meet to accept retirement and appoint a new Liquidator by a Decision Procedure.
Everything passed along

Question 9

Death of a Liquidator in CVL?

Answer 9

Personal Representatives give Notice to Registrar and Committee (CVL) or OR (WUC)

Question 10

Reasons to form a Liquidation Committee (7)?

Answer 10

Represent Creditors’ wishes;
Police activities of the Liquidator;
Provide expert views and guidance;
Agree basis of remuneration;
Sanction specific actions of the Liquidator;
Receive reports from Liquidator;
Request meetings from Liquidator

Question 11

Membership Numbers of a Committee?

Answer 11

Minimum 3, Maximum 5

Question 12

Committee Problem Scenarios (3)?

Answer 12

Committee member cannot profit from their membership;
Member must leave the Committee if absent for three meetings;
Liquidator must send a written report to Committee when requested

Question 13

3 Requirements for an application to join a Committee?

Answer 13

Must have submitted a proof of debt;
Claim cannot be fully secured;
Claim cannot have been disallowed

Question 14

What basis of fees can Remuneration be taken on?

Answer 14

Percentage of assets realised / distributed;
Time costs;
A set amount;
A combination of

Question 15

Guiding Principles for Fees?

Answer 15

Fair;
Reasonable;
Transparent;
Consistent;
Understandable;
Proportionate

Question 16

Fixing the Basis of Fees is done on:

Answer 16

Complexity of the Case;
Responsibilities of the IP;
Excessive / Work of an exceptional nature;
Value and Nature of the Assets on hand