The Insolvency Practitioners Regulations (Northern Ireland) 2006

Regulation 4

SCHEDULE 1 Regulations revoked

• The Insolvency Practitioners Regulations (Northern Ireland) 1991(1)

• The Insolvency Practitioners (Amendment) Regulations (Northern Ireland) 1993(2)

• The Insolvency Practitioners (Amendment No. 2) Regulations (Northern Ireland) 1993(3)

• The Insolvency Practitioners (Amendment) Regulations (Northern Ireland) 2003(4)

Regulation 12

SCHEDULE 2 Requirements for Security and Related Matters

PART 1 Interpretation

Interpretation

1.  In this Schedule—

“cover schedule” means the schedule referred to in paragraph 3(2)(c);

“the insolvent” means the individual or company in relation to which an insolvency practitioner is acting;

“general penalty sum” shall be construed in accordance with paragraph 3(2)(b);

“insolvent’s assets” means all assets comprised in the insolvent’s estate together with any monies provided by a third party for the payment of the insolvent’s debts or the costs and expenses of administering the insolvent’s estate;

“specific penalty sum” shall be construed in accordance with paragraph 3(2)(a).

PART 2 Requirements relating to security

Requirements in respect of security

2.  The requirements in respect of security for the proper performance of the duties of insolvency practitioners prescribed for the purposes of Article 349(3)(b) of the Order shall be as set out in this Part.

Requirement for Bonding – Terms of the Bond

3.—(1) Where an insolvency practitioner is appointed to act in respect of an insolvent there shall be in force a bond in a form approved by the Department which—

(a) contains provision whereby a surety undertakes to be jointly and severally liable for losses in relation to the insolvent caused by—

(i) the fraud or dishonesty of the insolvency practitioner whether acting alone or in collusion with one or more persons; or

(ii) the fraud or dishonesty of any person committed with the connivance of the insolvency practitioner and

(b) otherwise conforms to the requirements of this Part.

(2) The term of the bond shall provide—

(a) for the payment, in respect of each case where the insolvency practitioner acts, of claims in respect of liabilities for losses of the kind mentioned in sub-paragraph (1) up to an aggregate maximum sum in respect of that case (“the specific penalty sum”) calculated in accordance with the provisions of this Schedule;

(b) in the event that any amounts payable under (a) are insufficient to meet all claims arising out of any case, for a further sum of £250,000 (“the general penalty sum”) out of which any such claims are to be met;

(c) for a schedule containing the name of the insolvent and the value of the insolvent’s assets to be submitted to the surety within such period as may be specified in the bond;

(d) that where at any time before the insolvency practitioner obtains his release or discharge in respect of his acting in relation to an insolvent, he forms the opinion that the value of that insolvent’s assets is greater than the current specific penalty sum, a revised specific penalty sum shall be applicable on the submission within such time as may be specified in the bond of a cover schedule containing a revised value of the insolvent’s assets;

(e) for the payment of losses of the kind mentioned in sub-paragraph (1), whether they arise during the period in which the insolvency practitioner holds office in the capacity in which he was initially appointed or a subsequent period where he holds office in a subsequent capacity.

(3) The terms of the bond may provide—

(a) that total claims in respect of the acts of the insolvency practitioner under all bonds relating to him are to be limited to a maximum aggregate sum (which shall not be less than £25,000,000); and

(b) for a time limit within which claims must be made.

4.  Subject to paragraphs 5, 6 and 7, the amount of the specific penalty in respect of a case in which the insolvency practitioner acts, shall equal at least the value of the insolvent’s assets as estimated by the insolvency practitioner as at the date of his appointment but ignoring the value of any assets—

(a) charged to a third party to the extent of any amount which would be payable to that third party; or

(b) held on trust by the insolvent to the extent that any beneficial interest in those assets does not belong to the insolvent.

5.  In a case where an insolvency practitioner acts as a nominee or supervisor of a voluntary arrangement under Part II or Chapter II of Part VIII of the Order, the amount of the specific penalty shall be equal to at least the value of those assets subject to the terms of the arrangement (whether or not those assets are in his possession) including, where under the terms of the arrangement the debtor or a third party is to make payments, the aggregate of any payments to be made.

6.  Where the value of the insolvent’s assets is less than £5,000, the specific penalty sum shall be £5,000.

7.  Where the value of the insolvent’s assets is more than £5,000,000 the specific penalty sum shall be £5,000,000.

8.  In estimating the value of an insolvent’s assets, unless he has reason to doubt their accuracy, the insolvency practitioner may rely upon any statement of affairs produced in relation to that insolvent pursuant to any provision of the Order.

PART 3 Records relating to bonding and connected matters

Record of specific penalty sums to be maintained by insolvency practitioner

9.—(1) An insolvency practitioner shall maintain a record of all specific penalty sums that are applicable in relation to any case where he is acting and such record shall contain the name of each person to whom the specific penalty sum relates and the amount of each penalty sum that is in force.

(2) Any record maintained by an insolvency practitioner pursuant to this paragraph shall, on the giving of reasonable notice, be made available for inspection by—

(a) any professional body recognised under Article 350 of the Order of which he is or was a member and the rules of membership of which entitle or entitled him to act as an insolvency practitioner;

(b) any competent authority by whom the insolvency practitioner is or was authorised to act pursuant to Article 352 of the Order; and

(c) the Department.

Retention of bond by recognised professional body or competent authority

10.  The bond referred to in paragraph 3 shall be sent by the insolvency practitioner to—

(a) any professional body recognised under Article 350 of the Order of which he is a member and the rules of membership of which entitle him to act as an insolvency practitioner; or

(b) any competent authority by whom the insolvency practitioner is authorised to act pursuant to Article 352 of the Order.

Inspection and retention requirements relating to cover schedule

11.—(1) This regulation applies to an insolvency practitioner appointed in insolvency proceedings under the Order to act—

(a) in relation to a company which the High Court has jurisdiction to wind up; or

(b) in respect of an individual.

(2) The insolvency practitioner shall retain a copy of the cover schedule submitted by him in respect of his acting in relation to the company or, as the case may be, individual until the second anniversary of the date on which he is granted his release or discharge in relation to that company or, as the case may be, that individual.

(3) The copy of a schedule kept by an insolvency practitioner in pursuance of sub-paragraph (2) shall be produced by him on demand for inspection by—

(a) any creditor of the person to whom the schedule relates;

(b) where the schedule relates to an insolvent who is an individual, that individual;

(c) where the schedule relates to an insolvent which is a company, any contributory or director or other officer of the company; and

(d) the Department.

(4) In its application in relation to a building society within the meaning of the Building Societies Act 1986(5), paragraph 3(d) shall have effect as if for the reference to the Department there was substituted a reference to the Financial Services Authority.

Requirements to submit cover schedule to authorising body

12.—(1) Every insolvency practitioner shall submit to his authorising body not later than 20 days after the end of each month during which he holds office in a case—

(a) the information submitted to a surety in any cover schedule related to that month;

(b) where no cover schedule is submitted in relation to the month, a statement either that there are no relevant particulars to be supplied or, as the case may be, that it is not practicable to supply particulars in relation to any appointments taken in that month; and

(c) a statement identifying any case in respect of which he has been granted his release or discharge.

(2) In this regulation “authorising body” means in relation to an insolvency practitioner—

(a) any professional body recognised under Article 350 of the Order of which he is a member and the rules of membership of which entitle him to act as an insolvency practitioner; or

(b) any competent authority by whom he is authorised to act as an insolvency practitioner pursuant to Article 352 of the Order.

Regulation 13

SCHEDULE 3 Records to be Maintained-Minimum Requirements

Details of the insolvency practitioner acting in the case

1.  The name of the insolvency practitioner acting in the case.

2.  The identifying number or reference issued to the insolvency practitioner by a competent authority or any body recognised under Article 350 of the Order.

3.  The principal business address of the insolvency practitioner.

4.  The name of—

(a) any body by virtue of whose rules the insolvency practitioner is entitled to practise; or

(b) any competent authority by whom the insolvency practitioner is authorised.

Details of the insolvent

5.  The name of the person in respect of whom the insolvency practitioner is acting.

6.  The type of the insolvency proceedings.

Progress of administration

7.  As regards the progress of the administration of the case the following details if applicable—

(a) the date of commencement of the proceedings;

(b) the date of appointment of the insolvency practitioner;

(c) the date on which the appointment was notified to the Registrar of Companies;

(d) the date on which the statutory declaration that the requisite majority of creditors of a debtor have consented to a deed of arrangement was filed.

Bonding arrangements in the case

8.  As regards the arrangements for security in the case—

(a) the date of submission of the cover schedule which has the details of the specific penalty sum applicable in the case;

(b) the amount of the specific penalty sum;

(c) the name of the surety;

(d) the date of submission to surety of a cover schedule with any increase in the amount of the specific penalty sum;

(e) the amount of any revised specific penalty sum; and

(f) the date of submission to the surety of details of termination of the office held by the insolvency practitioner.

Matters relating to remuneration

9.  As regards the remuneration of the insolvency practitioner—

(a) the basis on which the remuneration of the insolvency practitioner is to be calculated; and

(b) the date and content of any resolution of creditors in relation to the remuneration of the insolvency practitioner.

Meetings (other than any final meeting of creditors)

10.  The dates of—

(a) the meeting of members;

(b) the date of first meeting of creditors—

(i) to consider an administrator’s proposals;

(ii) to consider an administrative receiver’s report;

(iii) in liquidation or bankruptcy; or

(iv) to consider a voluntary arrangement proposal; and

(c) the dates and purposes of any subsequent meetings.

Disqualification of Directors

11.  As regards the insolvency practitioner’s duties under Article 10 of the Company Directors Disqualification (Northern Ireland) Order 2002(6) to report the conduct of directors—

(a) the date a return under Article 10 is due;

(b) the date a return is submitted to the Department;

(c) the date a conduct report is submitted to the Department; and

(d) the date on which any further reports are submitted to the Department.

Vacation of office etc

12.  The following details regarding the completion of the case—

(a) the date of the final notice to, or meeting of, creditors;

(b) the date that the insolvency practitioner vacates office; and

(c) the date of release or discharge of the insolvency practitioner (or if there is no final meeting of creditors, the date of the final return of receipts and payments to the Department).

Distributions to creditors etc.

13.  As regards distributions—

(a) in relation to each payment to preferential or preferred creditors—

(i) the name of the person to whom the payment was made;

(ii) the date of the payment;

(iii) the amount of the payment;

(b) in relation to each payment to unsecured creditors—

(i) the name of the person to whom the payment was made;

(ii) the date of the payment;

(iii) the amount of the payment; and

(c) in relation to each return of capital—

(i) the name of the person to whom the return of capital was made;

(ii) the date of the payment; and

(iii) the amount of capital returned or the value of any assets returned.

Statutory Returns

14.  As regards any returns or accounts to be made to the Department or the Registrar of Companies—

(a) as regards each interim return or abstract of receipts and payments—

(i) the date the return or abstract is due;

(ii) the date on which the return is filed; and

(b) as regards any final return or abstract of receipts and payments—

(i) the date that the return or abstract is due; and

(ii) the date on which the return is filed.

Time recording

15.  Records of the amount of time spent on the case by the insolvency practitioner and any persons assigned to assist in the administration of the case.

(1)

S.R. 1991/302

(2)

S.R. 1993/317

(3)

S.R. 1993/454

(4)

S.R. 2003/547

(5)

1986 c. 53

(6)

S.I. 2002 No. 3150 (N.I. 4)