Oury Clark Blog

• Elliot GreencloseAuthor: Elliot Green Name: Elliot Green ACA MABRP
  Email: Elliot.Green@ouryclark.com
  Site: http://ouryclark.com/insolvency/partners
  About: With an interest in the field of insolvency that was already well-developed when he qualified as a Chartered Accountant in 1999, Elliot has concentrated almost exclusively on under-performing business ever since and is now also a Licensed Insolvency Practitioner. Elliot enjoys an outstanding reputation for his facility with the forensic aspects of insolvency work, although his commitment to the “Rescue Culture” ensures that his goal remains to ensure the survival of the business wherever possible. When not working, Elliot is often to be found indulging his love and enjoyment of sport of many varieties, generally from a suitably comfortable vantage point. However, as a keen supporter of Manchester United he has, from time to time, been known to brave the elements for the right cause.See Authors Posts (48)

• Position: Insolvency Partner OCA
• Phone: +44 (0) 1753 551111
• Fax: +44 (0) 1753 550544
• Email: Elliot.Green@ouryclark.com
• More information about
  Elliot Green at ouryclark.com

The ability of the Trustee in Bankruptcy or Liquidator to apply to Court for orders of disclosure and private examination is a powerful weapon in the armoury of an Insolvency Practitioner (“IP”), seeking to unravel the financial affairs of a bankrupt or a company particularly given an IP usually enters his or her office as a stranger.

What was interesting about this case was that such orders are more often than not utilised to seek information from a bankrupt or a former company director who have mandatory statutory obligations to assist the IP in the execution their duties.

In the matter of Hooper v Duncan Lewis (Solicitors) Ltd & Ors [2010] BPIR 591 (“Hooper”) the Trustee in Bankruptcy sought disclosure of solicitors’ files, not of the bankrupt [...]

• Elliot GreencloseAuthor: Elliot Green Name: Elliot Green ACA MABRP
  Email: Elliot.Green@ouryclark.com
  Site: http://ouryclark.com/insolvency/partners
  About: With an interest in the field of insolvency that was already well-developed when he qualified as a Chartered Accountant in 1999, Elliot has concentrated almost exclusively on under-performing business ever since and is now also a Licensed Insolvency Practitioner. Elliot enjoys an outstanding reputation for his facility with the forensic aspects of insolvency work, although his commitment to the “Rescue Culture” ensures that his goal remains to ensure the survival of the business wherever possible. When not working, Elliot is often to be found indulging his love and enjoyment of sport of many varieties, generally from a suitably comfortable vantage point. However, as a keen supporter of Manchester United he has, from time to time, been known to brave the elements for the right cause.See Authors Posts (48)

• Position: Insolvency Partner OCA
• Phone: +44 (0) 1753 551111
• Fax: +44 (0) 1753 550544
• Email: Elliot.Green@ouryclark.com
• More information about
  Elliot Green at ouryclark.com

Preferences are defined in Section 239 of the Insolvency Act 1986 and arise when one creditor is placed into a better position to that of another, when an individual or a company enters into a formal insolvency procedure.

The precise timescales and circumstances for a Preference are outside the scope of this post but the leading case on Preferences is Re MC Bacon Ltd [1990] BCLC 324 for more detailed consideration of the rules.

This post is seeking to consider the relationship between a Preference and invalid set off for director’s loans in the context of an insolvent company.

A rather common preference scenario is where a company director lends a sum of money to fund their business which at some point enters into decline. Upon the realisation [...]

• Elliot GreencloseAuthor: Elliot Green Name: Elliot Green ACA MABRP
  Email: Elliot.Green@ouryclark.com
  Site: http://ouryclark.com/insolvency/partners
  About: With an interest in the field of insolvency that was already well-developed when he qualified as a Chartered Accountant in 1999, Elliot has concentrated almost exclusively on under-performing business ever since and is now also a Licensed Insolvency Practitioner. Elliot enjoys an outstanding reputation for his facility with the forensic aspects of insolvency work, although his commitment to the “Rescue Culture” ensures that his goal remains to ensure the survival of the business wherever possible. When not working, Elliot is often to be found indulging his love and enjoyment of sport of many varieties, generally from a suitably comfortable vantage point. However, as a keen supporter of Manchester United he has, from time to time, been known to brave the elements for the right cause.See Authors Posts (48)

• Position: Insolvency Partner OCA
• Phone: +44 (0) 1753 551111
• Fax: +44 (0) 1753 550544
• Email: Elliot.Green@ouryclark.com
• More information about
  Elliot Green at ouryclark.com

It never ceases to amaze me the number of professional qualified accountants who believe that the files that they create are their own property.

A company accountant is usually employed under a contract for services to enable the directors to comply with their statutory duties, to maintain proper books and records (Section 386 of the Companies Act 2006 – formerly Section 221 of the Companies Act 1985), prepare financial statements, for tax advice and compliance purposes such as for Part III if Schedule 18 of the Finance Act 1998. It may also be the case that a company accountant is also contracted as agent to be the company’s registered office and therefore receive all Companies House documentation and service of any legal documents upon the company.

The [...]

• Elliot GreencloseAuthor: Elliot Green Name: Elliot Green ACA MABRP
  Email: Elliot.Green@ouryclark.com
  Site: http://ouryclark.com/insolvency/partners
  About: With an interest in the field of insolvency that was already well-developed when he qualified as a Chartered Accountant in 1999, Elliot has concentrated almost exclusively on under-performing business ever since and is now also a Licensed Insolvency Practitioner. Elliot enjoys an outstanding reputation for his facility with the forensic aspects of insolvency work, although his commitment to the “Rescue Culture” ensures that his goal remains to ensure the survival of the business wherever possible. When not working, Elliot is often to be found indulging his love and enjoyment of sport of many varieties, generally from a suitably comfortable vantage point. However, as a keen supporter of Manchester United he has, from time to time, been known to brave the elements for the right cause.See Authors Posts (48)

• Position: Insolvency Partner OCA
• Phone: +44 (0) 1753 551111
• Fax: +44 (0) 1753 550544
• Email: Elliot.Green@ouryclark.com
• More information about
  Elliot Green at ouryclark.com

This case highlights that the IVA Protocol which applies to the vast majority of consumer orientated IVAs, is a voluntary code of best practice without legal enforceability over creditors.

The IVA Protocol has been widely taken up and endorsed by many organisations, including the British Bankers Association, whose members are usually representative of the largest block of creditors in many consumer IVAs.

In this case the Court declined to exercise its discretion to grant declaratory relief in the terms sought; that MBNA had to give a good reason as to the basis of its rejection of the debtor’s proposed IVA. The Court submitted that creditors who are inclined to be bound by the IVA Protocol might need more guidance from the Protocol itself on what was a [...]

• Elliot GreencloseAuthor: Elliot Green Name: Elliot Green ACA MABRP
  Email: Elliot.Green@ouryclark.com
  Site: http://ouryclark.com/insolvency/partners
  About: With an interest in the field of insolvency that was already well-developed when he qualified as a Chartered Accountant in 1999, Elliot has concentrated almost exclusively on under-performing business ever since and is now also a Licensed Insolvency Practitioner. Elliot enjoys an outstanding reputation for his facility with the forensic aspects of insolvency work, although his commitment to the “Rescue Culture” ensures that his goal remains to ensure the survival of the business wherever possible. When not working, Elliot is often to be found indulging his love and enjoyment of sport of many varieties, generally from a suitably comfortable vantage point. However, as a keen supporter of Manchester United he has, from time to time, been known to brave the elements for the right cause.See Authors Posts (48)

• Position: Insolvency Partner OCA
• Phone: +44 (0) 1753 551111
• Fax: +44 (0) 1753 550544
• Email: Elliot.Green@ouryclark.com
• More information about
  Elliot Green at ouryclark.com

Well possession could indeed be said often to be 9/10s of the law because recovery from the possessor is no easy business, notwithstanding any legal remedies that are available, including those in statute such as the Torts (Interference with Goods) Act 1977 and common law.

For example only, professionally I frequently seek files as Liquidator from both solicitors and accountants who have historically been retained by the insolvent company, to assist my investigations into a company’s demise. Such fellow professionals have usually entered into contracts for services with the company and the files in relation to the same (in which they will often have acted as an agent) will usually contain documents to which a liquidator is legally entitled. However, it is not uncommon to meet [...]

• Elliot GreencloseAuthor: Elliot Green Name: Elliot Green ACA MABRP
  Email: Elliot.Green@ouryclark.com
  Site: http://ouryclark.com/insolvency/partners
  About: With an interest in the field of insolvency that was already well-developed when he qualified as a Chartered Accountant in 1999, Elliot has concentrated almost exclusively on under-performing business ever since and is now also a Licensed Insolvency Practitioner. Elliot enjoys an outstanding reputation for his facility with the forensic aspects of insolvency work, although his commitment to the “Rescue Culture” ensures that his goal remains to ensure the survival of the business wherever possible. When not working, Elliot is often to be found indulging his love and enjoyment of sport of many varieties, generally from a suitably comfortable vantage point. However, as a keen supporter of Manchester United he has, from time to time, been known to brave the elements for the right cause.See Authors Posts (48)

• Position: Insolvency Partner OCA
• Phone: +44 (0) 1753 551111
• Fax: +44 (0) 1753 550544
• Email: Elliot.Green@ouryclark.com
• More information about
  Elliot Green at ouryclark.com

The new insolvency rules seem to make a few changes to the Insolvency Rules 1986 but I wonder if they really provide value or even will afford creditors the alleged c.£48million in costs savings. I rather think not.

For those practitioners for example who specialise in court work (compulsory liquidations and bankruptcies), costs will rise with having to do annual progress reports which previously were not a requirement.

For example further, Rule 12A.12 is a rule which essentially is unlikely I think to be taken up by many smaller firms in its current construction. This is a pity as a practical construction of such a rule would be hugely beneficial to creditors and save costs.

For those of us who predominantly do court work and wanted to utilise [...]