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New Year, New Rules


The 6th April 2017 brings with it a new set of insolvency rules in the insolvency industry. The Insolvency (England & Wales) Rules 2016 is aimed at modernising and updating present procedures which have been in force for 30 years. This will enable the office-holder to use streamlined procedures and communication systems which should simplify and speed up processes and as a spin-off save expenses payable by the insolvency estate.

 

The Impact of the changes occur in three main areas, namely:

 

  • Consolidation of existing rules and amendments. Since 1986 there have been no less than 28 amending legal instruments made to the Insolvency Rules. It is anticipated that the new Rules will better meet the needs of creditors, insolvency practitioners as well as the judiciary.

 

  • Streamlining the Rules. By using more user-friendly terminology it is anticipated that the new Rules will be easier to understand and use. The new Rules will be structured in a way to reduce repetition. This will be achieved by having common parts applicable to multiple insolvency procedures. Additionally, there is a wider use of standard content provisions for notices and provisions.

 

  • Modernise procedures to reflect the way the business world operates.

E-communication are generally faster, cheaper than tradition methods. The means and methods of communication have moved significantly since 1986 and to reflect those improvements a number of key changes are contained in the new Rules. These include:

 

  • Use of emails – more freedom to use e-communication and the lifting of certain restrictions and limitations

 

  • Use of web sites – Instead of posting communications to creditors they will now be made available through a way of downloads from a website.

 

  • Removal of physical creditors meetings – as the default mechanism for decision making by creditors. Currently the vast majority of creditors meetings take place with only the director and insolvency practitioner present. Holding creditors’ meetings involves costs and expenses which are charged to the insolvency estate.

 

  • The office-holder will be able to write to creditors with a proposal which will be deemed to be accepted and approved unless more than 10% (by value) object. If such an objection is registered an alternative decision-making processes will be employed at the discretion of the office-holder. This could include electronic voting, correspondence or a virtual meeting.

 

  • The Office holder may only call a physical meeting if specifically requested by at least

 

  • 10% by value of creditors or

 

  • 10% in total number of creditors or

 

  • 10 individual creditors.

 

The new Insolvency Rules will bring changes to the Insolvency Profession and changes to the way cases are administered.


Added: 19 Jan 2017 18:13


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The Timothy James Partnership

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Insolvency Practitioners Association
About Us


We are an independent firm of specialist Licensed Insolvency Practitioners located in Bromsgrove, Worcestershire.

At The Timothy James Partnership, we work very closely with local businesses and professionals, providing guidance on formal insolvency procedures and advice on restructuring businesses.

We recognise that at times, companies find themselves in difficult financial circumstances and our aim is to provide practical solutions in these situations.