Multiple choice/short questions Flashcards

Question 1

Q

Who is unable to make a proposal for a company to be placed into a Company Voluntary Arrangement?

a) Administrator
b) The members
c) Liquidator
d) The directors

Answer

A

The members

Question 2

Q

The supervisor of a CVA is required to notify creditors that the arrangement has been terminated or fully implemented. Within how many days after the termination or full implementation must creditors be notified?

Answer

A

Not more than 28 days

Question 3

Q

Within what time period must the trustee deal with the matrimonial home to prevent it from re-vesting in the debtor?

Answer

A

Within the period of 3 years beginning with the date of the bankruptcy

Question 4

Q

What constitutes a quorum in the case of a meeting of creditors?

Answer

A

At least one creditor entitled to

Question 5

Q

Which of the following cannot apply to the Court for an Administration Order?

Answer

A

The members

Question 6

Q

Where a Trustee in Bankruptcy intends to claw back an item of excess value pursuant to Section 308 IA 1986 he must serve notice on the bankrupt within how many days from when the item first came to his knowledge?

Question 7

Q

Where a company has gone into compulsory liquidation the Court may appoint any person to be a special manager of the business to assist in the management of the company. Name two of the special manager’s duties.

Answer

A

Give security based upon the value of the assets of which he has been appointed
Prepare and keep accounts detailing his receipts and payments
These must be prepared for each three month period since appointment

Question 8

Q

What insolvency options are available to creditors of a partnership that is unable to pay its debts?

Answer

A

Sue and obtain judgement on the debt
Bankrupt one or more partners without seeking to wind-up the firm
Wind-up the firm as an unregistered company without seeking to bankrupt individual partners
Wind-up the firm as an unregistered company and bring concurrent petitions against one or more partners
Petition the Court for a Partnership Administration Order

Question 9

Q

Which decisions in a proposed CVA are required to have three quarters or more in value of those responding vote in favour of?

Answer

A

A decision approving a proposal or a modification
A decision extending or further extending a moratorium
A decision bringing a moratorium to an end before the end of the period of any extension

Question 10

Q

What additional powers are commonly found within a mortgage deed to assist a receiver appointed under the Land of Property Act 1925, in carrying out his duties?

Answer

A

Power to take possession and sell the property
Power to borrow money to carry out statutory duties
Power to trade or manage
Power to deal with employees
Power to raise or borrow money
Power to appoint solicitors and other agents
Power to retain out of money received his reasonable remuneration
Power to do all such other things reasonably and property necessary for realising the property

Question 11

Q

There are various legislative sources and non-statutory guidance which an Insolvency Practitioner should be comply with. List eight of these?

Answer

A

Insolvency Act 1986
Statements of Insolvency Practice (“SIPs”)
Insolvency Rules 2016
EC Regulations
Company Directors Disqualification Act 1986
Companies Act 2006
Law of Property Act 1925
Money Laundering
Bribery Act 2010
Technical releases
Insolvency guidance papers
Code of Ethics
Case law

Question 12

Q

A creditor’s petition (Form 4.2) served against a company, must specify the grounds on which it is presented and the nature of the relief sought. What other information should also be contained on the petition?

Answer

A

SADNESS Follows Pain

Share capital of the company
Address of its registered office
Date of incorporation of the company
Name and registered number of the company
EC Regulations apply?
Statement that the company is insolvent and unable to pay its debts
Statement that “in the circumstances it is just and equitable that the company be wound up under the provisions of IA 1986”
Full name and address of the petitioner
Proceedings main, secondary or territorial if EC Regs apply

Question 13

Q

What are your obligations as an office holder under the Money Laundering regulations?

Answer

A

Establish procedures to identify the directors and verify their identities
Determine those with a controlling interest in the company
Assess individual risk of money laundering (high, medium, low)
Carry out ongoing monitoring of business relationships
Appoint a nominated office Money Laundering Officer to whom principals and employees must make money laundering reports
Establish internal systems, procedures, policies and controls to prevent money laundering
Provide relevant training on money laundering to staff
Maintain records of client identification and of business relationships for at least 5 years
Maintain a continuing obligation to review
Report suspicions of money laundering to the National Crime Agency

Question 14

Q

What powers does the Act give to a supervisor In an Individual Voluntary Arrangement?

Answer

A

Power to apply to Court for an order in respect of transactions defrauding creditors
Power to present a bankruptcy petition
Power to apply to Court for directions
Power to apply to Court for the transfer of cases

Question 15

Q

Which one of the following cannot make a Court application pursuant to Section 304 of the Act against a trustee for misapplied or retained, or become accountable, for any monies which the bankrupt’s estate has suffered a loss as a consequence?

Answer

A

The bankrupt’s spouse

Question 16

Q

In administration, what type of recovery action cannot be assigned to a third party?

Answer

A

Avoidance of a floating charge

Question 17

Q

You are required by law to notify the Redundancy Payments Service within a period of 90 days if you are proposing to dismiss how many employees?

Answer

A

20 or more

Question 18

Q

Following legislative changes in October 2015, where office holders are seeking approval to draw fees on a time costs basis, fees and costs estimates need to be provided in advance of approval being sought. Which type of formal insolvencies does this not apply to?

Answer

A

MVL and CVA

Question 19

Q

You are declaring a dividend to the unsecured creditors. The company was previously in administration but is now in CVL. As the company traded overseas, several of the creditors’ claims submitted are in Euros and US Dollars. What exchange rate date should be utilised for the purposes of converting these claims to Sterling?

Answer

A

The exchange rate on the date of the administration order

Question 20

Q

What are the RPO weekly payment limits?

Answer

A

Arrears of pay 8 weeks

Holiday pay 6 weeks

Question 21

Q

Which of the following does not have to be included in a a report by an Administrative Receiver under S48 of the Act?

a. The events leading up to his appointment
b. The disposal by him of any property of the company
c. Amounts of of principle and interest repayable to the debenture holder and the amounts payable to preferential creditors
d. Names, address and debts of the unsecured creditors
e. An estimate of the value of the prescribed part available to unsecured creditors

Answer

A

d. Names, address and debts of the unsecured creditors

Question 22

Q

Whose agent is an Administrative Receiver?

Answer

A

The company’s

Question 23

Q

Within what period must an Administrative Receiver deliver an abstract of Receipts and Payments to the Registrar of Companies?

Answer

A

Within 2 months after the end of 12 months from the date of their appointment and every subsequent period of 12 months

Question 24

Q

Within what period of being given notice of a proposal for a Company Voluntary Arrangement (subject to extension by the court) must a Nominee report to the court whether meetings of the company and its creditors should be called to consider the proposal?

Question 25

Q

When a moratorium comes into force prior to the calling of decision meetings to approve a Company Voluntary Arrangement the Nominee is required to advertise the fact that a moratorium is in force. When must the Nominee place this advertisement?

Answer

A

As soon as is reasonably practicable

Question 26

Q

Where no steps are taken to obtain a moratorium, to whom does the Nominee submit his report on the prospect of a Company Voluntary Arrangement being approved and implemented?

Answer

A

The court

Question 27

Q

At your first meeting you advise the directors that the first step to placing the company into MVL is to call a board meeting in order to pass certain resolutions to commence the process. What resolutions do the directors need to pass at this board meeting?

Answer

A

Company should be wound up by the members
Declaration of solvency
That a general meeting of the company’s members should be called
Director to chair GM
Notice of the proposed liquidation be given to any QFCH
Distribution in specie

Question 28

Q

What guidance should be provided to the directors in respect of the swearing of a declaration of solvency?

Answer

A

Declaration must contain a sworn statement by the directors that:

They have made full inquiry into the company’s affairs; and
They have formed the opinion that the company will be able to pay its debts in full plus interest within 12 months from the commencement of the winding up.
The declaration must include a statement of the company’s assets and liabilities
The declaration must be made within 5 weeks immediately preceding the date of the passing of the resolution for winding up.

Question 29

Q

In accordance with the Rules what debts are not provable in a bankruptcy?

Answer

A

POF GOONS

Post bankruptcy order debts
Obligation arising under a confiscation order made
Fine imposed for an offence
Gaming debts
Obligation (other than obligation to pay a lump sum or costs) arising under an order made in family proceedings
Obligation arising under a maintenance assessment made under Child Support Act 1991
Non-EU tax claims
Statute barred debts after six years

Question 30

Q

SIP 7 details certain information which should be disclosed in a receipts and payments account or by way of a note when the payments concerned are to the office holders and their associates. List four of the payments that should be disclosed.

Answer

A

OH remuneration, showing sums paid on each basis
amounts paid to OH out of the estate for pre-appointment costs
amounts paid to OH in respect of supervision of trading
All other amounts required to be approved in the same manner as remuneration
amounts paid to sub-contractors for work that would otherwise have to be carried out by the OH or their staff
Any remuneration /disbursements paid to the OH other than out of the estate, with amounts paid, name of the payer, its relationship to the insolvent estate and the nature of the payment

Question 31

Q

In Administration, what 2 types of recovery action cannot be assigned to a third party?

Answer

A

Avoidance of floating charge and misfeasance

Question 32

Q

You are due to meet a debtor who is considering entering into an IVA. During the course of this meeting, what preliminary advice should be provided to the debtor at this early stage, in accordance with SIP 3.1?

Answer

A

The advantages and disadvantages of each available option to the debtor
The key stages and roles of the adviser / nominee / supervisor
Any potential delays or complications
Likely duration of the IVA
What is required of the debtor
The consequences of proposing and entering into an IVA
What may happen if the IVA is not approved or not successfully completed

Question 33

Q

A partner in a partnership has recently been declared bankrupt. What effect will his bankruptcy have on the partnership, should the court apply the terms of an Insolvency Partnership Order?

Answer

A

The partnership is automatically dissolved
The bankrupt’s share in the partnership vests in the trustee on appointment
The deed often provides for expulsion of the bankrupt partner and some mechanism for valuing and buying out of the bankrupt’s share by the other partners
If no such buy-out provision the trustee may bring proceedings against the firm to realise the bankrupt’s interest in the partnership

Question 34

Q

Notwithstanding any additional powers and duties which may or may not have been provided to a receiver under the terms of a legal mortgage, what powers or duties does a receiver have if appointed under the Law of Property Act 1925?

Answer

A

Duty to insure
Duty to keep property in repair
Power to collect rent and income

Question 35

Q

What is a category 2 disbursement?

a. Costs that are not directly referable to the appointment
b. Costs paid to an independent third party
c. Costs directly referable to the appointment
d. Costs that do not need to be approved by the creditors in advance

Answer

A

c. Costs directly referable to the appointment

Question 36

Q

Which of the below need not be contained in an officeholder’s progress report?

(a) Contact details of the officeholder
(b) The amount of any fee estimate (if any given)
(c) The date of the appointment of the officeholder
(d) Identification details for the proceedings

Answer

A

(b) The amount of any fee estimate (if any given)

Question 37

Q

Where the Nominee of a CVA is not the Administrator or Liquidator of the company and it appears that the Nominee’s report cannot be properly prepared on the basis of information in the proposals and Statement of Affairs, the Nominee may require certain information. Which of the below is not in the statutory list?

(a) More information on why a CVA is being proposed
(b) The company’s last three years’ audited accounts
(c) Particulars of any previous proposals
(d) Further information relating to the company’s affairs that the Nominee regards as necessary

Answer

A

(b) The company’s last three years’ audited accounts

Question 38

Q

Which Schedule of the Act deals with the powers of an Administrative Receiver?

Answer

A

Schedule 1

Question 39

Q

If a Liquidator were to reject a creditor’s proof of debt, what should they do?

Answer

A

All proofs must be dealt with within 5 business days from the last date of proving.
If the Liquidator rejects a proof…
in whole or in part…
He shall prepare a written statement of his reasons for doing so…
and send it to the creditor…
as soon as reasonably practicable

Question 40

Q

List four people who may be required to attend a private examination under S366 IA 1986?

Answer

A

The Bankrupt
The Bankrupt’s spouse/civil partner (including former spouses/civil partners)
Any person known or believed to have any property comprised in the Bankrupt’s estate in her/his possession/indebted to the bankrupt.
Any person appearing to the court to be able to give information concerning the Bankrupt or the Bankrupt’s dealings, affairs or property.

Question 41

Q

What are the two main types of Retention of Title clause and outline the main characteristics of the two clauses

Answer

A

Simple clause
stipulates that the supplier has retention of title over goods supplied under a specific invoice, until that invoice has been paid in full.
All monies clause
this clause will stipulate that all goods supplied by the supplier remain the property of the supplier until all sums due to that supplier are settled in full.
If the purchaser has, at any point, cleared the account with that supplier down to nil, title of all goods purchased prior to that date passes to the purchaser.

Question 42

Q

Where no IVA is being proposed, what are the grounds available to annul a Bankruptcy order?

Answer

A

that, on the grounds existing at the time the order was made, it ought not to have been made
that, to the extent required by the Rules, the bankruptcy debts and expenses have all, since the making of the order, been either paid or secured for to the satisfaction of the Court

Question 43

Q

You are the Administrator of Sweet Homes Limited and wish to sell a property over which First Clear Bank has a fixed charge. First Clear Bank has refused you permission to sell the property.

What steps can you take, if any, as Administrator to overcome this and achieve a sale of the property?

Answer

A

Is any negotiation possible with chargeholder?
What are reasons for refusal? Concerned if a shortfall arises?
Consider preparing EOS to address any concerns
If negotiation not possible, then the ADM has recourse to Para 71, Sch B1 IA
Under this, ADM can apply to Court for an order enabling him to dispose of property subject to a fixed charge as if it were not subject to the charge.
Court may only make order where satisfied that disposal of the property would be likely to promote the purpose of the administration.
Net proceeds of disposal must be applied towards discharge of the security – including any additional amount the Court considers to be necessary in order to achieve what it thinks ought to be market value.

Question 44

Q

In accordance to SIP 3.2, what matters must a Nominee in a CVA comment upon in his report to the Court?

Answer

A

whether:

the company’s financial position is materially different from that contained in the proposal,
the CVA is manifestly unfair;
the CVA has a reasonable prospect of being approved and implemented.
proposer understands the impact of the modifications on the implementation of the CVA and its viability;
where modification is adopted, that consent has been obtained from the proposer of the CVA and if appropriate the creditors
The likely outcome if the proposal is rejected
History of other failures
view of major creditors
Attitude and Co-op of directors
Any transactions better pursued in Liquidations

Question 45

Q

Where a company enters into insolvent Liquidation the directors are prohibited by Section 216 of the Act from re-using the company name. Explain what the exception to this rule is where a sale of the insolvent business takes place?

Answer

A

R22.4 IR 2016: this is the first excepted case to s216 prohibition.

Directors acquiring the insolvent business may re-use the prohibited name if they give notice:

to all creditors of the insolvent company
in the Gazette
this notice can be given before completion of the sale, but must be within 28 days of completion, if not

the notice must state:

name and registered number of the insolvent company
names of the directors
intention of the directors to trade using the prohibited name
what the prohibited name is.

Question 46

Q

In accordance with the Rules, what is the latest day on which a Trustee can give notice to the Bankrupt and spouse/former spouse that a property falls within the provisions of S283A (“Bankrupt’s home”)

Answer

A

14 days prior to the expiry of the 3 year period under S283A

Question 47

Q

A Trustee in Bankruptcy may disclaim ‘onerous property’. Explain what is meant by ‘onerous property in this context’.

Answer

A

Unprofitable contract
Unsaleable or not readily saleable property
Property that may give rise to a liability to pay money
or perform any onerous act

Question 48

Q

The principle of equity of exoneration enables which of the following results?

(a) A person to claim an interest in a property through direct contribution
(b) A person to claim an interest in a property through indirect contribution
(c) A person to marshal all or part of a secured debt against another person, thus increasing their own share in the equity
(d) A person to treat a secured debt as unsecured, thus increasing the available equity in the property

Answer

A

(c) A person to marshal all or part of a secured debt against another person, thus increasing their own share in the equity

Question 49

Q

What is the definition of a transaction at an undervalue in accordance with s339 of the Act?

Answer

A

Where the Bankrupt has, at a relevant time:
- Made a gift to another person

or

enters into a transaction:

that provides no consideration
in consideration of marriage or civil partnership with a person
for significantly less consideration than they ought to have received

Question 50

Q

A meeting has been convened to approve the remuneration of the Trustee. Within what time period must the meeting be advertised in the London Gazette?

Question 51

Q

Set out the grounds on which the Official Receiver may revoke a Debt Relief Order which has been made.

Answer

A

s251L(2)

Information supplied (either in or in support of the application, or after the determination date) was incomplete, incorrect, or otherwise misleading
Debtor has failed to comply with a duty under s251J
Debtor has been adjudged bankrupt
Debtor has made, or notified intention to make, an IVA proposal

Question 52

Q

In a Protocol Compliant IVA all funds received, after payment of the arrangement costs, must be used to pay dividends to unsecured creditors. If at the end of the arrangement there are funds left in the account does the Supervisor have any discretion to return these funds to the debtor?

Answer

A

Yes – but only up to a limit of £200

Question 53

Q

If a person issues the Liquidator with a ‘Notice to Elect’, how long has s/he got to decide whether to disclaim onerous property?

Question 54

Q

A Trustee in Bankruptcy may obtain a charge on a Bankrupt’s home under s313A of the Act for the ‘charged value’. What does s313A of the Act advise is the ‘charged value’?

Answer

A

S.313 (2A):
• The value of the Trustee’s interest in the property at the date of the s313 order
• Interest on that amount from the date of the Charging Order at the prescribed rate

Question 55

Q

R15.7 IR 2016 sets out the detail of the notice to creditors of the decision procedure. It states that the convenor must deliver a note to every creditor who is entitled to a notice of the procedure. What must the notice contain?

Answer

A

SIDS Deer Stalker

Statement of the decision date
If creditor who has opted out of receiving notices can still vote
Description of the decision procedure
Statement of when a proof must be delivered
Details of the decision to be made
Statement that 10% of the creditors may, within five business days from the date of delivery of the notice require a physical meeting

Question 56

Q

Who may take part in the public examination of a Bankrupt and question her concerning her affairs, dealings and property and the causes of her failure?

Answer

A

S.290(4):
• The Official Receiver
• The Trustee of the Bankrupt’s estate, if his appointment has taken effect
• Any person who has been appointed as special manager of the Bankrupt’s estate or business
• Any creditor of the Bankrupt who has tendered a proof in the Bankruptcy

Question 57

Q

In accordance with Schedule 6 of the Rules what is the scale for a Trustee’s and a Liquidator’s remuneration for funds distributed?

Answer

A

On first £5,000 or fraction thereof 10%
On the next £5,000 or fraction thereof 7.5%
On the next £90,000 or fraction thereof 5%
On all further sums distributed 2.5%

Question 58

Q

Where an Administrative Receiver is appointed he shall, within three months after his appointment, send to the Registrar of Companies, any trustees for secured creditors of the company and to all such creditors a report. On what matters should he report?

Answer

A

S48(1):
• The events leading up to his appointment, so far as he is aware of them
• The disposal or proposed disposal by him of any property of the company and the carrying on or proposed carrying on by him of any business of the company
• The amounts of principal and interest payable to the debenture holders by whom or on whose behalf he was appointed and the amounts payable to preferential creditors
• The amount (if any) likely to be available for the payment of other creditors

Question 59

Q

What information must be included when providing notice to interested parties of a dwelling house falling within s283 of the Act?

Answer

A

PLANT Big Nobbly Cacti

Persons to receive the notice
Last date under which the notice can be issued
Address of the property in question
Name and address of Trustee
Title number of the property
Bankruptcy order date
Name of Bankrupt
Court details

Question 60

Q

You have been appointed Liquidator of Glassway Limited, a company which ceased to trade six months ago and there are no known assets. The directors have agreed to make the sum of £8,000 available to cover the costs and expenses of the winding up. For what amount should you, as Liquidator, bond?

Answer

A

Include monies provided by third parties towards the costs and expenses of the liquidation in your bond calculation
The Liquidator should therefore bond for £8,000

Question 61

Q

State four matters that would constitute a breach of a Protocol Complaint IVA according to the Protocol.

Answer

A

• Any time arrears of contributions equivalent to three months or more of contributions proposed
• Debts and liabilities exceed by 15% or more the figure
estimated for the proposal
• False or misleading information was provided to obtain the IVA
• Significant omissions in the information provided for the IVA
• Failure to do anything that the Supervisor reasonably asks for the purposes of the IVA
• Failure to comply with any obligation under the IVA

Question 62

Q

What is the ‘official exchange rate’ to be used when calculating claims in foreign currencies?

Answer

A

The middle exchange rate on the London Foreign Exchange Market at close of business on the relevant day

Question 63

Q

To whom does the Administrator not have to send his Proposals?

Answer

A

The Court

Question 64

Q

How much does the registration with the Secretary of State of an approved IVA cost?

Answer 60

A

Imprisonment or a fine, or both

Answer 61

A

Satisfied that the company is, or likely to become, unable to pay its debts

considers that the making of an order is reasonably likely to achieve the purpose of administration
(para 11 Sch B1).

Answer 62

A

Where the Net Property is less than £10,000 £50% of the Net Property

Where the Net Property exceeds £10,000 50% of the first £10,000 plus 20% of the property that exceeds £10,000 up to a maximum prescribed part of £600,000.

Answer 63

A

–Made all payments required by the debtor under the IVA

Fully explained any breach of the IVA as required by the Supervisor
Paid the Supervisor any sum that they have reasonably requested to compensate creditors for any reduction in dividend caused by the debtor’s breach of the IVA

Answer 64

A

Amount of the debt(s) equal to or exceeds £5,000
The debt(s) are for a liquidated sum payable to the petitioning creditor immediately or at some certain, future time
The debt(s) is/ are unsecured
The debtor is unable to pay the debt or has no reasonable prospect of being able to pay
There is no outstanding application to set aside a statutory demand served on the debtor in relation to the debt(s) s267(2) IA 86

Answer 65

A

By a notice sent by the Supervisor to creditors for an initial six month extension period.
By a notice sent by the Supervisor to creditors for a further three month extension period.
If a creditors meeting is called for a date after the IVA will have expired, the IVA is extended to cover the meeting date and any adjournment.
Where exceptional income not disclosed by the debtor, the term of the IVA may be extended by up to six months to recover any sums due.
By agreement of creditors at a variation meeting.

Answer 66

A

The circumstances leading to the Bankruptcy.
A summarised account of the extent of the Bankrupt’s assets and liabilities at the date of the bankruptcy order and date of the annulment application.
Details of any creditors known to the Trustee who have not lodged a claim in the bankruptcy.
The Trustee’s remuneration.
Basis fixed for the Trustee’s remuneration.
Expenses incurred by the Trustee.
The extent to which the debts and expenses have been paid or secured and whether the security is satisfactory.
Any other matters as considered necessary for the information of the court.

Answer 67

A

Contents of chair’s report - Wario’s REALM

Was the proposal for an IVA approved or rejected.
Resolutions taken at the meeting and the decision on each one.
EC Regulations - if they apply and if they do, main, secondary or territorial proceedings
Any other information that is appropriate to make known to creditors and/or the Court.
List of creditors with their respective values who were present or represented at the meeting and how they voted on each resolution
Modifications to the proposal - what were they

Time limits

Notice to be sent as soon as is reasonably practicable after a copy of the report is filed at Court (where Interim Order is in place).

Four business days of the meeting being held (where no Interim Order is in place).

Answer 68

A

MCAT SANDS

Make out a statement of affairs in the prescribed form as to the affairs of the company.
Cause that statement to be laid before the creditors’ meeting.
Appoint one of their number to preside at that meeting.
The director so appointed attends the meeting and presides over it.

Contents of statement:

securities held by creditors
assets, debts and liabilities - particulars of
names and addresses of company’s creditors
dates when the securities were given
such further or other information as may be prescribed

Answer 69

A

Schedule 6 IA 86

Any sum due in respect of occupational pension schemes.
Remuneration of employees in preceding 4 months.
Holiday pay.
Sums advanced to pay employees that would otherwise have been a preferential debt.
Levies on coal and steel production.

Answer 70

A

To get in, realise and distribute the company’s assets to its creditors and, where there is a surplus, to the persons entitled to it

If the Liquidator is a person other than the Official Receiver, he must also:

furnish the Official Receiver with information
produce to/permit inspection by the Official Receiver books and records
give the Official Reciever assistance

as the Official Receiver may reasonably require for the purposes of carrying out his functions in relation to the winding-up

Answer 71

A

Debtor is allowed a payment break of up to 6 months once during the term of the IVA without any modification being required at the discretion of the Supervisor.

The term of the IVA will be extended by the length of the payment break

so that the debtor will make the same number of contributions as agreed in the original proposal.

The debtor cannot already have had a payment break

and must not already be in breach of the terms of the IVA in other ways

and should provide to the Supervisor documentary evidence of the item of expenditure in any event.

Supervisor shall, if necessary, review the position at the end of the break.

Answer 72

A

The Court must be satisfied that:

the company is, or is likely to become, unable to pay its debts

and that the Administration Order is reasonably likely to fulfil the purpose of the Administration (both Para 11, Sch B1).

Answer 73

A

To sell any part of the property comprised in the Bankrupt’s estate, including goodwill and book debts of any business
To refer to arbitration or to compromise debts, claims or liabilities owed by another person to the Bankrupt
To make a compromise or other arrangement with regard to claims or potential claims against the Trustee arising out of the Bankruptcy estate
To prove debts and receive dividends in respect of claims in other insolvency proceedings arising from debts owed to the bankrupt
To exercise statutory powers in the IA relating to the Bankrupt’s estate

Answer 74

A

Inform Supervisor of notice of redundancy within 14 days
regardless of whether he has received, or expects to receive, any redundancy payment
Inform Supervisor of amount of any redundancy payment within 14 days
Pay Supervisor within 14 days of receipt of any redundancy payment
any amount above 6 months net take home pay (as set out at the last annual review date)
If no amount above 6 months net take home pay no payment is required
Where possible continue to make monthly contributions to the IVA as set out at the last annual review date
Keep Supervisor informed of any changes in employment status
If unable to make contributions the Supervisor will review the matter
When new job obtained the Supervisor will review IVA contributions
at that point there will be an expectation that any remaining redundancy funds will be paid into the IVA
performance in this regard will be reported to creditors
if the debtor fails to disclose an entitlement to a redundancy payment, this is considered to be a breach of the IVA

Answer 75

A

NITRIC USD

Name, address and authority of any person authenticating the claim, if not the creditor personally
If creditor is a company, its registered number
Total amount of claim including VAT less any discounts that would have been available but for the insolvency
Retention of title over goods to which the debt refers
Incurred debt - how and when
Creditor’s name and address
Uncapitalised interest, if claim includes any outstanding
Security - any held, date given and value
Documents evidencing the claim should be specified

Answer 76

A

IP Practitioners Regulations 2005

Answer 77

A

Administrative Receiver

Answer 78

A

Power to bring legal proceedings for a TUV or a Preference

Answer 79

A

Execution

This is creditor action whereby an individual or corporation owed money by a company takes formal court action against that company..
the court action is successful and a judgement is made against the company
Execution is the enforcement of that court judgement, often by a court official called the High Court Enforcement Officer
or it can be taken by the creditor themselves.
The HCEO or the creditor can enter the premises if the company and take ‘walking possession’ over assets or goods physically on the premises
which are not privileged (for example, belonging to a third party or electronically turned on)
available to any creditor of the company

Answer 80

A

a party can raise a defence if they took every step to minimise potential loss
Statute does not state that this should be ‘every reasonable step’ but it is interpreted as meaning this
An example of a ‘step’ that should be taken is to minimise outgoings and deal only in cash

Answer 81

A

The Administrator should first consider whether the sale of the business will meet statutory purpose of Administration

Valuation
- The Administrator should obtain a valuation of the business from an independent agent on both a going concern basis and a break up basis

Advertise
- The sale of the business should be advertised in at least two papers or publications

MBO
- Consider whether the existing management team would be interested in buying the business

Property matters
- Consider whether there are any fundamental issues with the property e.g. health and safety or issues with landlord such as him not consenting to a sale

Insurance
- Ensure that appropriate insurance is in place
Realistic chance of sale

The Administrator should consider whether the sale is realistic and if not should consider closing the business and sell assets at public auction

Environmental matters
- Have an environmental report carried out to ensure there are no environmental issues

Secured creditors
- Identify assets subject to fixed charges and ensure that the fixed charge holders agree to a sale of the assets

Answer 82

A

San Francisco VEHICLES

Licences
- Are any specific licences required for this type of business in order for it to trade

Finances/Cashflow

Is trading financially viable? Have cashflow projections prepared
can you obtain an overdraft to allow trading or an indemnity from the bank?

Security
- Ensure the business premises are secure and take custody of all sets of keys

Environment

Consider environmental risks of trading the business
Consider getting an environmental report carried out

Health and Safety
- Consider all health and safety risks involved in trading the business and consider having a health and safety check carried out.

Employees
- There needs to be sufficient employees in order to trade the business. Check if there is any arrears of wages and if they are willing to co-operate

Insurance
- Ensure there is adequate insurance in place for the business and if there is not obtain open cover insurance

Valuation
- At the earliest opportunity obtain a valuation of the business as a going concern

Stock-take
- Carry out a stock take to ensure you have sufficient stock and you can ensure stock levels remain consistent

Customers/Suppliers

Are there any customers or suppliers who are owed money that are fundamental to the trade of the business
Will they continue to supply

Answer 83

A

The administrators’ proposals
Any major amendments or deviation from, those proposals
The steps taken during the administration
The outcome

Answer 84

A

− Notice of Intention to appoint an administrator
− Notice of Appointment of administrator
− Board meeting minutes
− General Meeting minutes?
− Resolutions of GM?
− Consent to Act
− Notice to QFC
− Statutory Declaration with Notice of Intention
− Statutory Declaration with Notice of Appointment
− Administrators’ statement
− Para 100 statement
− Evidence of QFC consent

Answer 85

A

Para 51 (1) IA 86

The above shall not apply where the statement of proposal states that the Administrator thinks:
− That the company has sufficient property to enable to each creditor of the company to be paid in full
− That the company has insufficient property to enable a distribution to be made to the unsecured creditors, other than by virtue of section 176 (2) (a)
− That neither of the objectives specified in para 3(1)(a) or para 3(1)(b) can be achieved.

But
The Administrator shall summon an initial creditors decision if it is requested by 10% of total creditors.

Answer 86

A

As soon as reasonably practicable:
− Advertise his appointment in the London gazette…
… and any other manner he thinks fit

Give notice of his appointment in the prescribed manner to:
− The Company
− The creditors of whose claims and addresses he is aware
− Any Receiver or Administrative Receiver who has been appointed
− Any Court Enforcement officer, who to the Administrator’s knowledge is charged with execution or other legal process other the company
− Any person who to the Administrator’s knowledge has distrained against the company or its property
− Any Supervisor of a CVA

Send notice of appointment to the Registrar of Companies within 7 days of receiving the sealed copy of the notice of appointment from the appointer.

Answer 87

A

Check that the ROT clause is valid and has been incorporated into the contract.

Request copies of all documentation: orders, invoices, ROT clause

To be incorporated an ROT clause must have been agreed before completion of the contract, it must not amount to an unregistered charge

Take legal advice as necessary (regarding the validity of the claim)

Identify the stock subject to the ROT claim (with the supplier as necessary)

Check what sums are still outstanding and reconcile with inventory of assets

Ensure stock is kept secure until ROT claims resolved.

Answer 88

A

Factors
In order to move from Administration to CVL the secured creditors and preferential creditors have been paid or funds have been set aside…
… and the company has sufficient property to allow a distribution to unsecured creditors …
…above the Prescribed Part

Advantages
− It is cheap and cost effective as there is no need to hold a section 100 Decision
− A liquidator has better investigative powers eg 212
− Not restricted by one year time limit
− Distribution can be made to unsecured creditors without court permission.
− Liquidator has broader powers to disclaim onerous assets and an administrator has no such powers

Answer 89

A

The arrangement prejudices the interest of a creditor, member or contributory

There has been a material irregularity in relation to either of the meetings

Answer 90

A

a)

Annulment does not release the trustee
remains liable to account for all actions in respect of bankruptcy estate
only released at the Court’s discretion

b)

Discharge does not bring the bankruptcy to a close
trustee is not released until he has finished administering the estate
Assets remain vested in the trustee and his duties continue

Answer 91

A

A decision approving a proposal or a modification

A decision extending or further extending a moratorium

A decision bringing a moratorium to an end before the end of the period of any extension

Answer 92

A

Power to take possession and sell the property

Power to borrow money to carry out statutory duties

Power to trade or manage

Power to deal with employees

Power to raise or borrow money

Power to appoint solicitors and other agents

Power to retain out of money received his reasonable
remuneration

Power to do all such other things reasonably and property necessary for realising the property

Answer 93

A

CRAMMED APE

Carry out ongoing monitoring of business relationships
Report suspicious of money laundering to the National Crime Agency
Assess individual risk of money laundering (high, medium, low)
Maintain records of client identification and of business relationships for at least 5 years
Maintain a continuing obligation to review
Establish procedures to identify the directors and verify their identities
Determine those with a controlling interest in the company
Appoint a nominated office Money Laundering Officer to whom principals and employees must make money laundering reports
Provide relevant training on money laundering to staff
Establish internal systems, procedures, policies and controls to prevent money laundering

Answer 94

A

Power to apply to Court for an order in respect of transactions defrauding creditors

Power to present a bankruptcy petition

Power to apply to Court for directions

Power to apply to Court for the transfer of cases

Answer 95

A

The purposes for which the Statement is to be used, as stated in the Act

Answer 96

A

The time limit for applications is within 28 days of filing of the chair’s report on the meeting with the court or date issued to creditors (in a case where there is no Interim Order)

Answer 97

A

(b) No possession proceedings may be commenced against the debtor’s property by a mortgagee

Answer 98

A

(b) 2 years immediately preceding a Bankruptcy petition

Answer 99

A

(b) 14 business days

Answer 100

A

Immediately following appointment OH should ascertain the location of, secure, and list all of the company’s books and records.
OH should invite creditors to provide information on matters of concern/assets
at the meeting of creditors at which the OH is appointed (liquidation)…
at the Para 51 first meeting of creditors in Administration…
at any subsequent meeting of creditors
in the first communication sent to creditors.
members of the creditors committee should also be invited
Inquiries should be made of directors and senior employees – questionnaire or interview
Irrespective of available funds, the OH should consider all available information in connection with the company and decide if further information is required or appropriate

Answer 101

A

that on the grounds existing at the time the bankruptcy order was made, the order ought not to have been made
that the bankruptcy debts and expenses have, since the making of the order, been paid or secured for to the satisfaction of the court.
l.

Answer 102

A

within 1 month of the expiry of the first 6 month period after the commencement of the administration

within 1 month of the expiry of each subsequent 6 month period of the administration

or one month from date of a previous administrator ceasing to act when replaced and then witin 1 month of expiry of every 6 month period thereafter

Answer 103

A

Supervisor has the discretion to admit
- claims of £1,000 or less
- claims submitted that do not exceed 110% of the amount stated by the debtor in the
proposal

…without the need for additional verification.

Answer 104

A

Liq needs sanction from creditors’ Committee/Secretary of state to commence legal proceeding under s239

Must also request authority from each floating charge creditor who is likely to suffer a shortfall as a result of the proposed action.
Request must be in writing
Liquidator has recourse to Court where the floating charge creditor is or is intended to be the defendant to the proceedings
or the floating charge creditor either:
refuses authorisation
grants it in an amount that is insufficient
or makes a request for further information which the Liquidator considers to be unreasonable

Answer 105

A

Court may do one or both of the following:

revoke or suspend any decision approving the CVA
or in the case of a material irregularity, any other decision taken at the meeting of creditors

give a direction to any person for the summoning of further meetings:

to consider a revised proposal
or in the case of a material irregularity, a further meeting of the company or creditors to reconsider the original proposal

Court will revoke any direction to summon meeting to consider a revised proposal where it is satisfied that the person making the original proposal has no intention of making a revised proposal

Answer 106

A

Wind up the partnership only as an unregistered company
Wind up the partnership with simultaneous bankruptcy petitions against one or more insolvent members
Individual insolvency proceedings against all members of the partnership without any action against the partnership itself
Individual insolvency proceedings against one or more members only, without including the remaining members or any action against the partnership itself.

Answer 107

A

Qualifying debts ( liquidated, payable immediately or at a specific future date, and not
excluded or secured) of less than £20,000
Assets of less than £1,000 (excluding a car worth less than £1,000)
Monthly disposable income of less than £50
Unable to pay debts
No previous DRO within last 6 years
Not a homeowner

Answer 108

A

another member of the Committee
anyone who is at the same time representing another Committee member
a body corporate
a person who is an undischarged Bankrupt or subject to a DRO moratorium
a disqualified director
a person who is subject to a BRO, including an interim BRO, a BRU, a DRRO or DRRU
any person claiming to be a member’s representative who cannot produce his letter of authority or whose authority appears to the chair of the relevant meeting to be deficient

Answer 109

A

Must call a first meeting to take place within 6 weeks of Committee’s establishment
Must call subsequent meetings within 21 days of receipt of a request for one from a member
or on a specified date, if the committee has previously resolved that this should happen
Must give 5 business days’ written notice of venue of meetings to Committee members (or their representatives) unless this has been waived by members
Other than this, Administrator shall hold meetings at times and locations he determines.
Must also act as chairman of committee meetings unless he appoints another IP or experienced member of staff to act as chair

Answer 110

A

OH must send a copy of the proposed resolution to all members
and must set it out in such a way that agreement or dissent can be indicated by the recipient on the copy resolution sent out
any committee member can require OH summon a meeting of the committee to consider matters raised by the resolution
but must do so within 7 business days of the date on which the resolution was sent out
If no meeting is requested, resolution is deemed passed by members when OH receives written notification that a majority of members concur with it
OH must keep a copy of every resolution passed and note the Committee’s concurrence

Answer 111

A

d) As soon as reasonably practicable

Answer 112

A

b) Physical meeting

Answer 113

A

b) Within 21 days of becoming aware of the asset’s existence

Answer 114

A

statement that the office holder intends to declare a dividend within two months of the last date for proving
statement as to whether it is an interim or final dividend
the last date for proving which must be at least 21 days from the date of the notice
statement of the place to where proofs should be delivered

Answer 115

A

Official Receiver

Trustee
Liquidator
Administrator
Supervisor if a victim is bound by the voluntary arrangement
A victim of the transaction (leave of the court is required if the debtor is bankrupt or in liquidation or administration)

Answer 116

A

Notice of the decision procedure/virtual meeting
Blank proxy
Copy of the proposal
Copy of the statement of affairs, or a summary including a list of creditors with the amounts of their debts
Estimated outcome/ comparison statement
Copy of the nominee’s report on the proposal
Nominee’s comments
Notice re requisite majorities
Creditors’ guide to IP’s fees
Claim form
Notice re opting out of receiving documents

Answer 117

A

The OR
The trustee (if other than the OR)
A special manager
Any creditor who has tendered proof

Answer 118

A

The creditor may apply to the court for the liquidator’s decision to be reversed or varied
The application to court must be made within 21 days of the creditor receiving the rejection of his claim
The creditor must deliver to the liquidator, notice of venue of the application hearing, once fixed by the Court

Answer 119

A

VH HI FI DID NUN

Verified company name against Companies House info
Have the individuals/directors fully disclosed details of their identity
Have you met individuals/directors face to face or are they refusing to meet you and want to operate through a third party
Is the business mostly cash-based (eg betting shop)
familiar with the business activities?
Is the business involved in high risk activities
Does the company/business operate in a high-risk country (check list)
Is the individual/director a PEP
Directors want to pay you in cash
No books and records or available records don’t support directors’ explanations re trading activities
Unexplained trading profits
No explanation for sources of cash

Answer 120

A

Creditors representing 25% in value of all the company’s creditors can ask the liquidator to call a meeting to vote on his own removal
The basis of the liquidator’s fees be fixed on basis preferred (rates to be provided at meeting)
The liquidator be authorised to draw “Category 2” disbursements, details provided at the meeting
Ordinary resolutions therefore 50%

Answer 121

A

Negotiate agreement with creditors
Debt reorganisation or consolidation loan
Remortgage of property
Sale of non-essential assets
Support from family/other third parties
Debt management plan

Answer 122

A

Decanters DECOCT Badly

Do all things which may be necessary for the protection of the company’s assets
Do all other things incidental to the performance of the functions and power of the PL
Employ accountants, lawyers and other persons and do all things necessary which the PL may consider expedient in connection with the above
Conduct investigations and obtain information as may be required to enable a liquidation to proceed in a speedy and efficient manner
Open or maintain such bank accounts as they consider expedient and to authorise payments out of the company’s bank account
Carry on the business of the company including employing, retaining or dismissing employees
Take possession of, collect and get in all property and assets
Bring or defend any action or other legal proceedings in the name and on behalf of the company

Answer 123

A

may occur as a result of the financial or other interests of a practice or an Insolvency Practitioner or of an immediate or close family member of an individual within the practice

Answer 124

A

may occur when a previous judgement made by an

individual within the practice needs to be re-evaluated by the Insolvency Practitioner

Answer 125

A

may occur when an individual promotes a position or opinion to the point that subsequent objectivity may be
compromised

Answer 126

A

may occur when, because of a close relationship, an individual within the practice becomes too sympathetic to the interests of others

Answer 127

A

which may occur when an Insolvency Practitioner may be deterred from acting objectively by threats, actual or perceived

Answer 128

A

An insolvency practitioner should be straightforward and honest in all professional and business relationships

Answer 129

A

An insolvency practitioner should not allow bias, conflict of interest or undue influence of others to override professional or business judgement.

Answer 130

A

An insolvency practitioner has a continuing duty to maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service based on current developments in practice, legislation and techniques

Answer 131

A

An insolvency practitioner should respect the confidentiality of information acquired as a result of professional and business relationships and should not disclose any such information to third parties without proper and specific authority unless there is a legal or professional right or duty to disclose

Answer 132

A

An insolvency practitioner should comply with relevant laws and regulations and should avoid any action that discredits the profession

Answer 133

A

(d) A maintenance assessment lump sum award

Answer 134

A

(b) The company’s last three years’ audited accounts

Answer 135

A

SAPIS

State that all relevant documents will be made available for viewing and downloading on a website
Address of the website
Password necessary to view and download documents from the site
Include a notice that any person to whom notice is given may at any time request hard copies of all or specific relevant documents
Specify tel number, email address and postal address which may be used to make request

Answer 136

A

Trustee’s remuneration must be fixed by creditors Committee or a decision procedure of creditors within 18 months of the appointment of the Trustee
If not fixed within 18 months remuneration will be fixed as follows:
applying realisation scale to monies received from the realisation of assets of BKY
— then by by applying the distribution scale to the value of assets distributed to creditors of the Bankrupt

Answer 137

A

A company is an associate of another company:

if the same person has control of both
a person has control of one and his associates, or he and his associates have control of the other

Answer 138

A

Occupation of premises for purpose of seeking sale of biz as a GC would be considered occupation for the beneficial conduct of the Adm
Consequently rent and rates incurred during period of occupation will constitute a ‘necessary disbursement’ and those payments will be payable as an expense of the Administration
Principle was confirmed in the cases of Game Stores Group and Re Atlantic Computer Systems
Administration expenses are paid in the priority set out in Rule 3.50 and will rank above other creditor claims
‘Rent’ includes other sums such as service charge and insurance that may be due under the terms of the lease
Any rent or rates due before the company entered Administration or after the Administrator ceased to occupy the premises will not rank as expense but as an ordinary unsecured debt

Answer 139

A

Notifications

Liquidator will place a notice in the London Gazette and any other manner he deems necessary within 14 days of the appointment
Notice of the appointment will go to the Registrar within 14 days.
A copy of the SOA will go to the creditor and contributories within 28 days and to the Registrar within 5 days
A note that the company is ‘In Liquidation’ is placed on all documentation, as well as the company’s website

Position of the Directors
- The directors’ powers cease on the appointment of the Liquidator but their duties continue until their position is terminated

Action
- In a Creditors’ Voluntary Liquidation actions are not automatically terminated; the Liquidator will have to apply to the court to end them.

Answer 140

A

clothing, bedding, furniture, household equipment and provisions necessary for satisfying basic domestic needs of the Bankrupt and family
Property held by the Bankrupt on trust for any other person
Personal correspondence (Haig v Aitken).
Titles of honour.
Compensation claims for pain and suffering or injured feelings.
Interest in an approved pension scheme.
Items not vested in the Bankrupt at commencement.

Answer 141

A

— the debtor
— any of his creditors
— any other person who is dissatisfied by any act, omission or decision of the Supervisor

the court may
— Confirm, reverse or modify any act or decision of the Supervisor
— Give directions
— Make any such other order as it thinks fit
— The court may also appoint another person qualified to act as Supervisor either in substitution for the existing Supervisor or to fill a vacancy

Answer 142

A

the company has sufficient property to enable each creditor of the company to be paid in
that the company has insufficient property to enable a distribution to be made to unsecured creditors other than by prescribed part
that neither of the objectives specified in paragraph 3(1)(a) and (b) can be achieved

Answer 143

A

date the CVA took effect
a summary of all receipts and payments in relation to the CVA
explanation of any departure from the original terms of the CVA
if the CVA has terminated, the reasons why
a statement as to the amount paid to any unsecured creditors by the prescribed part

Answer 144

A

Before declaring dividend OH must give notice to all creditors who are known to him and have not proved their debts of intention to declare and distribute a dividend
Notice to be given by public advertisement (Gazette) Unless creditors previously invited by Gazetted notice to prove debts
Must specify a last date for proving (not less than 21 days from the date of the notice)
Officeholder must deal within 5 business days from the last date for proving

Answer 145

A

Bankrupt has the right against the Trustee not to be evicted if in occupation (without leave of
the court).
If not in occupation a right to enter the dwelling house.
Trustee can make an application to court for leave to evict the Bankrupt
Court will do what is just and reasonable, having regard to the interests of the creditors

Answer 146

A

Written notice must be given to the Bankrupt
Notice must be served within 42 days of the Trustee first became aware of the property
Can only be longer with leave of court

Answer 147

A

Making of declaration without reasonable grounds is an offence
culpable director will be liable to fine, imprisonment or both
If a company becomes insolvent after being placed into MVL it will be presumed that the statutory declaration was not made on reasonable grounds
The company will then be placed into insolvent Liquidation.

Answer 148

A

Equitable exoneration occurs when one party has charged their share of the matrimonial home for the benefit of the other

In the event of a sale of the property, the debts must be allocated to the relevant equity share in accordance with the benefit received

Answer 149

A

A 2nd mortgage on the property was used to fund the husband’s business
As the wife could prove she did not benefit from the funds and had her own independent source of income, the loan was applied to the husband’s share of the equity first and the wife effectively became surety for any shortfall

Answer 150

A

As a percentage of the value of assets realised or distributed, or of both in combination
By reference to time properly given by the IP and his staff in attending to matters arising
A set amount
A combination of the above bases

Answer 151

A

Top row:

Harry’s Pilot Met Other Airmen Travelling To America

Hours (title) 
Partner
Manager
Other senior professionals
Assistants and support staff
Total hours 
Time costs 
Average hourly rate

First column:

Counting Avalanches In Remote Chalets Cures Truly Troubling Tremors

Classification of work function (title) 
Administration and planning
Investigations
Realisations of assets
Case specific matters
Creditors
Trading
Total hours 
Total fees claimed

Answer 152

A

Posh Venture Capitalists Persistently Act Childish Indoors

prepare SOA within 7 days of forming the opinion
verify SOA with statement of truth
convene decision procedure of creditor to take place within 28 days of forming the opinion
provide creditors with minimum of 7 days notice of th decision procedure
advertise decision procedure in the gazette and any other manner in which he sees fit
consider if any conflict prevents them from acting as CVL Liquidator, consider resignation
if he believes that the directors had no reasonable grounds to swear the declaration of solvency, report them to the crown prosecution service

Answer 153

A

Details of assets sold
Consideration paid… terms of payment
Valuations obtained of the assets and business
Options considered by the administrator and the financial outcomes
Trade in the circumstances? No… offer for sale as going concern
Efforts to consult major creditors
Requests to potential funders for working capital
Buy-back arrangements attached to sale contract
Relationship between purchaser and directors, shareholders or secured creditors of the company
Identity of the purchaser
Names of the directors who are involved in the management or ownership of the purchaser
Guarantees given from directors for amounts due from the company to a funder
Source of the Administrator’s initial introduction
Marketing activities undertaken by company/Administrator
Extent of the Administrator’s involvement pre-appointment
Date of transaction
Sale a part of wider transaction? Details of the other parts
Pre-pack pool, whether consulted
Viability statement, whether provided
Charges, details of

Answer 154

A

Investigation into affairs
Valuation basis for assets and liabilities
Attitude of debtor
Secured creditors cooperation
Approval - estimated result for creditors
Re a Debtor - Greystoke v Hamilton-Smith tests
Extent debtors estimates relied upon
Source of referral
History of previous failures
Other options
Rejection - likely outcome
Transactions best pursued in Bankruptcy

Answer 155

A

Property not owned by company to be included in VA
Preferential creditors - how they will be dealt with
Further credit facilities to be arranged and how to be paid
Business - how it is to be conducted
Funds - how they are to be held during VA
Functions to be undertaken by Supervisor
Duration proposed for VA
Any guarantees or security that are to be given for purposes of the VA
Dates proposed for distributions to creditors
Supervisors’ joint appointment statement
Liabilities - nature and amount
Identification and contact details of Supervisor
Charged assets, extent of
Excluded assets, extent of
Nominee’s remuneration
Connected parties - how they are proposed to be dealt with
Estimated amounts for distribution to creditors
Desireable to enter VA - explain why
Manner in which liabilities are to be dealt with by the arrangement
Asset details with estimates of their values
Secured creditors - how they will be dealt with
Supervisor’s remuneration
Antecedent transactions
Guarantees given for compay debts by other persons
EC Regulations, whether they apply

Answer 156

A

Consequences of entering VA
Role of Nominee and Supervisor
Advantages and disadvantages
Required of the debtor
Duration likely for VA

Answer 157

A

Face to face
Understand process
Cooperative debtor?
Key creditors’ attitude
Viability of the solution

Answer 158

A

History - info is sufficient for creditors to understand
Background and financial history, where relevant
Insolvency - why it happened
Roles of debtor and key duties
Outcomes estimated for VA
Financial difficulties, attempts to solve
Payments to Nominee and Supervisor for VA

Answer 159

A

Final position - materially different to proposal?
Unfair proposal (manifestly)
Consent to modifications by debtor
Advice - debtor had and confirmed in writing
Reasonable prospect of VA being approved and implemented

Answer 160

A

Modifications outlined to creditors
Supervised in accordance with terms
Departures identified ASAP
Monitored progress
Discretion exercised by Supervisor
Enquiries dealt with
Variations approved
Costs fully disclosed
Closed promptly on completion

Answer 161

A

5 business days

Answer 162

A

ALLOCATE CASH

assets acquired post bky and pre discharge can be claimed for the estate
liability for bky offences - concealment/falsification
legal actions stayed
or becomes receiver and manager of estate pending trustee
credit rating impaired
antecedent transactions may be recovered by trustee
transactions subject to scrutiny
employee contracts deemed to be terminated
contempt of court if do not assist trustee
asset dispositions are void without court approval
special manager may be appointed
home likely to be realised

Answer 163

A

AA BAG MANIACS

ASSETS - DELIVER TO OR
ACCOUNTS - PROVIDE OR WITH 3 YEARS WORTH
BOOKS AND RECORDS - DELIVER TO OR
ATTEND ON TRUSTEE AS REQUIRED
GIVE TRUSTEE ALL INFORMATION
MUST ATTEND ON OR
ATTEND PUBLIC EXAMINATION BY OR IF NEEDED
NOTIFY TRUSTEE OF ASSETS ACQUIRED/INCOME INCREASE WHILE UNDISCHARGED
IPO/IPA - UP TO 3 YEARS
ATTEND PRIVATE EXAMINATION BY TRUSTEE IF NEEDED
COURT - MUST DO AS IT DIRECTS FOR PURPOSES OF BKY
SOA - PROVIDE IF NEEDED

Answer 164

A

BBC DITTO

BANK ACCOUNT - NEED LEAVE TO OPERATE
BRO/BRU
CREATE, MANAGE OR PROMOTE A COMPANY WITHOUT COURTS PERMISSION
DIRECTOR - CANNOT ACT WITHOUT LEAVE
IP - CANNOT BE
TRADE - CANNOT WITHOUT LEAVE OF OR/TRUSTEE
TRADE UNDER DIFFERENT NAME WITHOUT DISCLOSING BKY STATUS
OBTAIN CREDIT OF £500 OR MORE WITHOUT DISCLOSING BKY STATUS

Answer 165

A

During Twenty Two BC CATBIRD FIT

DESTRUCTION OF BOOKS AND RECORDS DIARISED
TAX PAPERWORK FILED (CT, PAYE AND VAT)
TAX LIABILITIES PAID (CT, PAYE AND VAT)
BANK ACCOUNTS RECONCILED AND FUNDS IN HAND ACCOUNTED FOR
CORRESPONDENCE DEALT WITH
COMPANIES HOUSE FILINGS MADE
ASSETS ON SOA DEALT WITH
TAX CLEARANCE RECEIVED FROM HMRC
BOOKS AND RECORDS REVIEWED AND INVENTORIED
INVESTIGATION WORK COMPLETED AND SIGNED OFF
RELEASE SPECIFIC BOND AFTER VACATION OF OFFICE
DECISIONS NOT TO PURSUE PARTICULAR MATTERS FILE NOTED AND SIGNED OFF
FEES AND EXPENSES DRAWN IN ACCORDANCE WITH APPROVAL OBTAINED
INSURANCE CANCELLED
THIRD PARTY FEES PAID

Answer 166

A

d) Student loans

Answer 167

A

c) The bankruptcy of a partner

Answer 168

A

restoration to the position the parties would have been in had the misfeasance never taken place
Includes any interest or other enhancement of value the company may have benefited from had the directors not did what they did

Answer 169

A

the directors can be ordered to repay any profit or gain they have made as a result of the breach of fiduciary duty

Answer 170

A

the directors can be ordered to account for any gain they have made
or to account for any loss to the company or its stakeholders

Answer 171

A

Liquidator can apply to court if he considers that the basis of his remuneration is insufficient or inappropriate
he must give 14 days’ notice of the application to the Committee
If there has been a material and substantial change in the circumstances of the case since the basis was fixed…
The Liquidator can make request to the Committee for it to be changed.
The Liquidator must also have provided a fees estimate (if all or part of the remuneration is on a time cost basis) when seeking approval
so if, as well as being dissatisfied with the level, it is apparent that the estimate will be exceeded, he will also need to seek approval for that from the Committee

Answer 172

A

ADM may apply to Court for extension for a specified
period
ADM may also seek the consent of creditors to extend for a specified period up to one year

Answer 173

A

If they have submitted a written resignation
If they become Bankrupt or subject to a DRO (although if Bankrupt, the Trustee in Bankruptcy replaces the creditor as Committee member)
If at 3 consecutive meetings of the Committee they are neither present nor represented (unless at the third of these meetings it is resolved that this rule should not apply)
If they cease to be, or are found never to have been, a creditor
If a meeting of creditors resolves (on 14 days’ notice of the resolution being tabled) that they should be removed

Answer 174

A

may only be obtained for maximum of 12 months
cannot be obtained after a court order to extend has been made
cannot be obtained after expiry of the Administration period
Once extension has been obtained by consent, notice must be filed at court and with ROC

Answer 175

A

Repossession FLAWS

repossession of goods for ROT/HP - cannot take place
forfeiture by reentry - cannot be exercised
administrative receiver - cannot be appointed
legal processes - including proceedings, CRAR and execution) cannot be commenced or continued
winding up petitions - suspended/dismissed
security over property - cannot be enforced

Answer 176

A

d) distribute assets in specie

Answer 177

A

d) It is void

Answer 178

A

Broadcast
Justify the marketing strategy
Independence
Publicise rather than simply publish
Connectivity
Comply or explain

Answer 179

A

Make a winding-up Order
Dismiss the petition
Adjourn the hearing conditionally or unconditionally
Make an Interim Order
Make any order the court including in relation to any property dispositions post and petition costs

Answer 180

A

the business should be marketed as widely as possible proportionate to its nature and size
Marketing should be by whatever media or other sources are likely to achieve this

Answer 181

A

statement to creditors should explain the reasons underpinning the marketing and media strategy used.
A list of what marketing has been undertaken alone is not sufficient to justify the marketing strategy to creditors.

Answer 182

A

ADM should be satisfied as to the adequacy and independence of the marketing undertaken

If the business has been marketed by the company prior to the IP being instructed, this should not be used
as a justification in itself to avoid further marketing

Answer 183

A

ADM must be satisfied that the best available outcome for creditors as a whole has been achieved.
marketing should be undertaken appropriate length of time to achieve this
creditors informed of the reason for the length of time decided upon

Answer 184

A

marketing should include online communication, alongside other media, by default
If the business is not marketed via the internet, this needs to be justified

Answer 185

A

ADM needs to explain how the marketing strategy has achieved the best available outcome for creditors as a whole

Answer 186

A

final progress report to be sent
within 5 business days of filing the notice of automatic end of administration with the Registrar of Companies
when making a request to creditors for extension of the Administration, or applying to Court for it
if appointed by QFC holder to company/directors, within 5 business days of filing notice that the purpose of the Administration has been achieved
when applying to Court for an order ending the Administration

Answer 187

A

BOAT AMP Party

Bank funds received every 14 days or immediately if £5,000 or more received
Obtain sanction if required of the creditors committee or SOS
At request of SOS send account of receipts and payments
Take possession of estate including books, papers and records
All financial records retained for 6 years following vacation of office
Make payments into ISA account of all monies received
Provide information, documents and other assistance to OR
Prepare and maintain records and accounts

Answer 188

A

MF F MF

Misconduct during the course of winding up
Falsification of company records
Failure to co-operate with the liquidator
Material omission from the statement of affairs
False representation

Answer 189

A

Challenge the trustee’s remuneration and expenses
Request further information from the trustee
Object to the trustee’s release

Answer 190

A

It is feasible
Fair to debtors and creditors
Fit to be put to creditors
Provides an acceptable alternative to bankruptcy

Answer 191

A

MC SATANIC

Maximise realisations for the benefit of creditors
Comply with guidelines set by the Insolvency Service
Submit a D report on such conduct
Adhere to the Code of Ethics
Take control of and realise the Company’s assets
Act objectively
Notify of appointment
Investigate the conduct of the director and affairs of the Company
Comply with statutory duties, such as providing reports and information to creditors

Answer 192

A

ASCERTAINED? NA

Assets that remain to be realised
Statement of the creditors’ rights to request information and right to challenge the administrator’s remuneration and expenses
Court and Court reference number
Extensions to the initial period of appointment
Remuneration - details of basis fixed or steps taken to fix it
Time cost basis, any fees which exceed the initial estimate with explanation of why and what the administrator intends to do
Administrator’s name and address, date of appointment
If exit is to precede a new form on insolvency and the report is the final
Name of company, address of registered office and registered number
Expenses incurred in the period covered by the report
Details of progress during the period of the report, including a receipts & payments account
Name and address of appointer
Any other relevant information

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