Insolvency (Amendment) Rules 2010

Introduction

Changes to the provisions governing the conduct of insolvency proceedings came into effect on 6 April 2010. The latest amendments complete the implementation of the Government’s modernisation proposals for insolvency law, which began with the advertising amendment changes which came into effect in April 2009. It is expected that the present version of the Rules as amended will be superseded by a restructured and re-ordered version which will come into effect in April 2011, so you may be wondering why they have bothered! We certainly are!
What follows is a summary of some of the main changes

1. General Amendments

To bring the Insolvency Rules in line with the Civil Procedure Rules, affidavits are replaced with witness statements and statements of truth.

2. Progress Reports and Removal of Requirement for Annual Meetings

The requirement for annual meetings in Voluntary Liquidations is abolished and replaced with a requirement to send a progress report where the Liquidation continues for more than one year.

Progress reports must now be sent in Administrations, all Liquidations, whether voluntary or compulsory, and Bankruptcies.

3. Remuneration

The rules relating to remuneration in Administrations, Liquidations and Bankruptcy are changed. The basis of remuneration is more flexible, but office holders must get the basis fixed within 18 months. There are changes to the creditors’ right of challenge, and creditors can also now challenge the office holder’s expenses.

The basis of remuneration must be fixed as follows:

• As a percentage of the value of the property
• By reference to the time properly given
• As a set amount

4. Use of Websites

Article 3 of the Order inserts new sections which allow office holders in corporate and personal insolvency proceedings to use a website as a means of sending documents and information to others in the course of insolvency proceedings.

5. Disclaimers

The new Rules change the way Liquidators and Trustees in Bankruptcy disclaim onerous property. There is no longer any requirement for the notice of disclaimer to be filed at Court or for the Court to seal the notice before it takes effect.

6. Sundry

Other rule changes cover issues such as:

• Electronic delivery of documents
• Remote attendance at meetings
• Non-disclosure of information to protect persons from the risk of violence
• Information to be incorporated into receipts and payments accounts

Conclusion

It is difficult top see what benefits these amendments will bring but in any event they may well be superseded next April.
Simon Weir