In June 2010, the Office of Fair Trading (“OFT”) issued a report on its review of “The market for corporate insolvency practitioners”. The full report can be found here – all 104 pages of it!
As an independent Insolvency Practitioner (“IP”) I obviously have a keen interest in all matters insolvency and in this one in particular because the report looks at how IP’s fees are authorised and controlled. There are a number of points that are brought out by the OFT in its conclusions which generally say that unsecured creditors appear to suffer more from a lack of control of IP’s fees than secured creditors do and complaints against IPs are ineffective.
The report actually only addresses larger-sized insolvency cases and seems to ignore the cases that are much more common – typical SME’s and family run businesses. It also only specifically addresses Creditors Voluntary Liquidations and Administrations and the control over the fees paid to IPs in carrying out their functions as Liquidators and Administrators. This seems rather narrow consultation to me!
Unfortunately, the OFT also appears to have missed the point, by quite a margin. The OFT appears to have approached the whole issue with a healthily independent viewpoint [commendable!], but with little real understanding of the insolvency profession and its workings [not so commendable!].
An examination of the OFT’s own data reveals that concerns regarding the actual level of fees charged might be inflated. In the market study (in the report) of 500 insolvencies, 80% of cases resulted in IPs not being paid in full, and in 7% of cases (a percentage generally regarded as a statistically significant amount), insolvency practitioners were not paid anything at all! The report also does not actually say that the fees in any of the cases are unfairly high. The OFT appears to have been very careful not to make unsupported subjective comments.
The OFT also suggests that a change of legislation is needed to enable creditors to exercise more control. It seems to have missed the fact that from 6 April 2010 there was a huge revamp of Insolvency Legislation and Regulation – the biggest since 2002 – which does provide a lot more control mechanisms for creditors to exercise. The OFT also suggests that a central body should be set up to review IP’s fees and if necessary, on a case by case basis, reduce those fees if it is felt appropriate. In my opinion, there is no need for this as there are a plethora of mechanisms already available to creditors to regulate IP’s fees. The sad fact is that most unsecured creditors actually don’t want (or should that be “can’t be bothered”?) to exercise their rights in doing this. However, it’s a bit early to see if the recent changes will result in creditors exercising the new controls.
There are a number of professional bodies (e.g. the ICAEW, Law Society and the Insolvency Service itself) that issue insolvency licences and regulate those licence holders. The OFT suggests that the Insolvency Service should regulate the whole of the insolvency profession and not be a licence issuer. At last, a point I can agree on with the OFT! I have long advocated that there should be one Regulator (a “Regulator of Regulators”) with a consistent approach to dealing with issuing licences and handling complaints. It remains to be seen if this will happen.
In conclusion, the OFT report has taken a large slice of the insolvency market but has passed comment on that slice only with limited knowledge. A real pity – this is a missed opportunity for the OFT to work with insolvency professionals themselves to improve the way insolvency regulation works and ensure that the general public (and not just creditors in the large, headline-grabbing cases) are considered and protected.
Monday, 28 June 2010
Monday, 21 June 2010
Insolvency terms explained
Introduction
People often ask what is the difference between a bankrupt company and a company in liquidation? The answer is that companies cannot be referred to as being “bankrupt” – only individuals can! This is a brief explanation of some of the terms you may come across in insolvency proceedings. Please note that this glossary is for general guidance only. Many of the terms have a specific technical meaning in certain contexts that may not be covered here.
Administration
A process where an administrator is appointed to take control of a company or partnership; or
an order made in a County Court to arrange and administer the payment of debts by an individual;
Administrative Receiver
Insolvency Practitioner appointed by the holder of a debenture, which is secured by a floating charge that covers the whole or substantially the whole of the company's assets. The IP's task is to realise those assets on behalf of the floating charge holder.
Administrative Receivership
The process where an Insolvency Practitioner is appointed by a floating charge holder to realise a company’s assets subject to the charge and pay preferential creditors and the charge holder’s debt.
Administrator
Insolvency Practitioner appointed under the administration process.
Annulment
The cancellation of a bankruptcy when all debts have been paid in full.
Assets
Anything that belongs to the debtor or company that may be sold and the proceeds used to pay creditors.
Bankruptcy
Personal insolvency proceedings.
Bankruptcy Order
Order of the Court, based on a creditor's or debtor's petition, which makes an individual bankrupt.
Bankruptcy Petition
A document presented by the debtor or by a creditor to the Court for the debtor to be made
bankrupt.
Bankruptcy Restriction Order
An order of Court extending bankruptcy restrictions against an individual past their discharge
from bankruptcy. Applicable for anything between 2 and 15 years.
Charge
Security taken over property by a creditor to protect against non-payment of a debt
(such as a mortgage or debenture).
Charging Order
An order made by the Court which gives the Trustee in Bankruptcy a legal charge on the debtor's interest in his/her home. This continues even after the debtor is discharged from bankruptcy.
Company Directors Disqualification Act 1986
Legislation regarding the disqualification of directors.
Company Voluntary Arrangement
A formal agreement between a company and its creditors where debts are repaid in part or in whole over a period of time.
Compulsory Liquidation
Winding up of a company after a petition to the Court, usually by a creditor.
Contributory
Every person liable to contribute to the assets of a company if it is wound up. In most cases this means shareholders who have not paid for their shares in full.
Creditor
Someone owed money.
Debenture
A document, issued as evidence of a debt or the granting of security for a loan of a fixed sum at interest (or both). The term is often used in relation to loans (usually from banks) secured by charges, including floating charges, over companies’ assets.
Debtor
A person who owes money.
Declaration of solvency
A legal document sworn by the directors in a Members’ Voluntary Liquidation as evidence of the solvency of a company.
Deed of Arrangement
An arrangement (governed by the Deeds of Arrangement Act 1914) proposed by the debtor for payments to his or her creditors. It is occasionally used instead of an Individual Voluntary Arrangement, particularly where creditors already agree to the terms of the arrangement and are not likely to take other action to recover their debt.
Director
A person who conducts the affairs of a company. See also shadow director.
Discharge
Process which frees a bankrupt from the restrictions of bankruptcy and releases him or her from the bankruptcy debts.
Disqualification
A procedure whereby a person has a Court order made against them (or agrees to a voluntary undertaking) which makes it an offence for that person to be involved in the management or directorship of a company for the period specified in the order or undertaking.
Dividend
In an insolvency context, this is any sum distributed to creditors.
Enterprise Act 2002
Legislation making substantial changes to the administration procedure and personal insolvency procedures in the Insolvency Act 1986.
Estate
Refers to assets of the debtor, which the trustee can deal with to pay the debtor’s creditors (“bankruptcy estate”).
Fixed charge
Charge held over specific assets. The debtor cannot sell the assets without the consent of the secured creditor or repaying the amount secured by the charge.
Floating charge
A charge held generally over the assets of a company. The assets may change and the company can use the assets without the consent of the secured creditor until the charge “crystallises” (becomes fixed).
Guarantee
An agreement to pay a debt owed by a third party.
Income Payments Order
The Court may order the debtor to pay part of their income to the trustee if their income is more than they or their family need to live on. On a practical basis, this procedure is usually replaced by an Income Payments Agreement (not requiring the involvement of the Court).
Individual Voluntary Arrangement
A formal agreement between an individual and their creditors where their debts are repaid in part or in whole over a period of time.
Insolvency
Defined as either having more liabilities than assets, or being unable to pay debts when they are due.
Insolvency Act 1986
Legislation introduced to consolidate many different previous forms of insolvency law and procedures. Subsequently amended by various statutes.
Insolvency Act 2000
Legislation introducing additional insolvency provisions.
Insolvency Practitioner
A person who specialises in dealing with insolvency related matters. They are authorised and licenced by a number of recognised professional bodies.
Insolvency Services Account (ISA)
The account at the Bank of England into which money realised from the assets in bankruptcies and liquidations is paid.
Insolvency Service
A Agency within the Department for Business Innovation and Skills (“BIS”) responsible for regulating IPs and their recognised professional bodies.
Interest
A right to, or share in, an asset of the insolvent debtor or company, usually relating to a property.
Interim receiver
The court may appoint the Official Receiver to act as interim receiver of an individual’s property (usually to protect and secure it), after the presentation of the bankruptcy petition but before a bankruptcy order is made.
Legal charge
A form of security (e.g. a mortgage) to ensure payment of a debt.
Liquidation
A process relating to limited companies and limited liability partnerships involving the realisation and distribution of the assets and usually the closing down of the business. There are three types of liquidation – compulsory, creditors’ voluntary and members’ voluntary.
Liquidator
The Official Receiver or an Insolvency Practitioner appointed to administer the liquidation of a company or partnership.
London Gazette
Official publication of the Government, which contains legal notices for England & Wales. (The Gazette is also published in Edinburgh for Scottish Law cases.)
Member (of a company)
A person who has agreed to be, and is registered as, a member, such as a shareholder of a limited company or a member of a Limited Liability Partnership.
Nominee
Insolvency Practitioner who carries out the preparatory work for a Voluntary Arrangement, prior to its implementation.
Officer (of a company)
A director or secretary of a company.
Office Holder
A general term referring to an IP appointed as a Liquidator, Receiver, Supervisor, Administrator etc
Official Receiver (“OR”)
An officer of the Court and Civil Servant employed by The Insolvency Service, who deals with bankruptcies and compulsory company liquidations.
Petition
A formal application made to a Court. (See also bankruptcy petition and winding-up petition.)
Preferential Creditor
A creditor in insolvency proceedings who is entitled to receive a dividend in priority to other unsecured creditors. From 15 September 2003, PAYE/NI and VAT are no longer preferential for insolvency cases commencing on or after 15 September 2003.
Prescribed Part
A proportion of the assets of a company that are set aside for payment to unsecured creditors.
“Pre-pack”
Term commonly used in association with an administration where the sale of the business and assets of a company is agreed and ‘pre-packaged’ ready to be put in place immediately a company goes into administration.
Private Examination
A Liquidator in a voluntary winding-up or an Administrator may apply to Court for a private examination to be held in Court under oath of any person believed to be able to supply information on the company’s dealings, who does not wish to co-operate with the office holder.
Proof of Debt
A form completed by a creditor in to state how much is claimed against the debtor/company. The form is supplied by the Office Holder. It is a commonly used expression for requesting details of a creditor’s claim in any insolvency proceeding.
Provisional liquidator
OR/IP appointed to preserve a company’s assets between the presentation of a winding-up petition and the making of a winding-up order.
Proxy
Instead of attending a meeting, a person or company can appoint someone else to go and vote in their place - a 'proxy'.
Proxy Form
A form which must be completed if a creditor wishes someone else to represent them at a creditors’
meeting and vote on their behalf.
Public Examination
When a company is being wound up by the Court or in bankruptcy proceedings, the Official Receiver may at any time apply to the court to question the company’s director(s) or any other person who has taken part in the promotion, formation or management of the company or the bankrupt’s business.
Realise
To sell an insolvent company’s/debtor’s assets and obtain the proceeds.
Receiver
Commonly used name for an Administrative Receiver. The term can also mean a person appointed by the Court or with the power to “receive” the rents and profits of property. Receivers who are not administrative receivers do not need to be insolvency practitioners.
Receiver and Manager
When a Bankruptcy Order is made, the Official Receiver becomes Receiver and Manager to protect the bankrupt’s estate. This happens before the Official Receiver becomes trustee or before an IP is appointed as the trustee in their place.
Receivership
A company in administrative receivership is often said to be “in receivership”. Receivership can also be a Court process.
Rescission
A procedure which cancels a winding-up order.
Release
The process by which the Official Receiver or an IP is discharged from the liabilities and responsibilities of them being an Office Holder.
Secretary of State
The Secretary of State for the Department of Business Innovation and Skills (“BIS”). Responsible for overseeing the Insolvency Service.
Secured creditor
Creditor who holds security, such as a mortgage, over a company’s/person’s assets for money owed.
Shadow director
A person who, without being formally appointed as a director, gives instructions on which the directors of a company are accustomed to act. This does not include someone acting in the capacity as a professional adviser.
Statement of affairs
Document sworn under oath, completed by a bankrupt, company officer or director(s), giving details
of all assets and liabilities.
Statutory demand
A formal document issued as part of the enforcement of a debt, usually done through a solicitor.
Non-payment within 21 days is accepted as evidence of the insolvency of a company or individual.
Supervisor
IP appointed to “supervise” the carrying out of an individual or company voluntary arrangement.
Trustee (in bankruptcy)
The Trustee in bankruptcy is either the Official Receiver or an IP who takes control of a person’s assets. The Trustee’s main duties are to realise those assets and distribute the money among the creditors.
Unsecured creditor
A creditor who does not hold security (such as a mortgage) for money owed. Some unsecured creditors
may also be preferential creditors.
Voluntary liquidation
Process of liquidation not involving the Courts or the Official Receiver. There are two types of voluntary liquidation – members' voluntary liquidation for solvent companies and creditors' voluntary liquidation for insolvent companies.
Winding up order
Order of a Court, usually based on a creditor's petition, for the compulsory winding-up of a company or partnership.
People often ask what is the difference between a bankrupt company and a company in liquidation? The answer is that companies cannot be referred to as being “bankrupt” – only individuals can! This is a brief explanation of some of the terms you may come across in insolvency proceedings. Please note that this glossary is for general guidance only. Many of the terms have a specific technical meaning in certain contexts that may not be covered here.
Administration
A process where an administrator is appointed to take control of a company or partnership; or
an order made in a County Court to arrange and administer the payment of debts by an individual;
Administrative Receiver
Insolvency Practitioner appointed by the holder of a debenture, which is secured by a floating charge that covers the whole or substantially the whole of the company's assets. The IP's task is to realise those assets on behalf of the floating charge holder.
Administrative Receivership
The process where an Insolvency Practitioner is appointed by a floating charge holder to realise a company’s assets subject to the charge and pay preferential creditors and the charge holder’s debt.
Administrator
Insolvency Practitioner appointed under the administration process.
Annulment
The cancellation of a bankruptcy when all debts have been paid in full.
Assets
Anything that belongs to the debtor or company that may be sold and the proceeds used to pay creditors.
Bankruptcy
Personal insolvency proceedings.
Bankruptcy Order
Order of the Court, based on a creditor's or debtor's petition, which makes an individual bankrupt.
Bankruptcy Petition
A document presented by the debtor or by a creditor to the Court for the debtor to be made
bankrupt.
Bankruptcy Restriction Order
An order of Court extending bankruptcy restrictions against an individual past their discharge
from bankruptcy. Applicable for anything between 2 and 15 years.
Charge
Security taken over property by a creditor to protect against non-payment of a debt
(such as a mortgage or debenture).
Charging Order
An order made by the Court which gives the Trustee in Bankruptcy a legal charge on the debtor's interest in his/her home. This continues even after the debtor is discharged from bankruptcy.
Company Directors Disqualification Act 1986
Legislation regarding the disqualification of directors.
Company Voluntary Arrangement
A formal agreement between a company and its creditors where debts are repaid in part or in whole over a period of time.
Compulsory Liquidation
Winding up of a company after a petition to the Court, usually by a creditor.
Contributory
Every person liable to contribute to the assets of a company if it is wound up. In most cases this means shareholders who have not paid for their shares in full.
Creditor
Someone owed money.
Debenture
A document, issued as evidence of a debt or the granting of security for a loan of a fixed sum at interest (or both). The term is often used in relation to loans (usually from banks) secured by charges, including floating charges, over companies’ assets.
Debtor
A person who owes money.
Declaration of solvency
A legal document sworn by the directors in a Members’ Voluntary Liquidation as evidence of the solvency of a company.
Deed of Arrangement
An arrangement (governed by the Deeds of Arrangement Act 1914) proposed by the debtor for payments to his or her creditors. It is occasionally used instead of an Individual Voluntary Arrangement, particularly where creditors already agree to the terms of the arrangement and are not likely to take other action to recover their debt.
Director
A person who conducts the affairs of a company. See also shadow director.
Discharge
Process which frees a bankrupt from the restrictions of bankruptcy and releases him or her from the bankruptcy debts.
Disqualification
A procedure whereby a person has a Court order made against them (or agrees to a voluntary undertaking) which makes it an offence for that person to be involved in the management or directorship of a company for the period specified in the order or undertaking.
Dividend
In an insolvency context, this is any sum distributed to creditors.
Enterprise Act 2002
Legislation making substantial changes to the administration procedure and personal insolvency procedures in the Insolvency Act 1986.
Estate
Refers to assets of the debtor, which the trustee can deal with to pay the debtor’s creditors (“bankruptcy estate”).
Fixed charge
Charge held over specific assets. The debtor cannot sell the assets without the consent of the secured creditor or repaying the amount secured by the charge.
Floating charge
A charge held generally over the assets of a company. The assets may change and the company can use the assets without the consent of the secured creditor until the charge “crystallises” (becomes fixed).
Guarantee
An agreement to pay a debt owed by a third party.
Income Payments Order
The Court may order the debtor to pay part of their income to the trustee if their income is more than they or their family need to live on. On a practical basis, this procedure is usually replaced by an Income Payments Agreement (not requiring the involvement of the Court).
Individual Voluntary Arrangement
A formal agreement between an individual and their creditors where their debts are repaid in part or in whole over a period of time.
Insolvency
Defined as either having more liabilities than assets, or being unable to pay debts when they are due.
Insolvency Act 1986
Legislation introduced to consolidate many different previous forms of insolvency law and procedures. Subsequently amended by various statutes.
Insolvency Act 2000
Legislation introducing additional insolvency provisions.
Insolvency Practitioner
A person who specialises in dealing with insolvency related matters. They are authorised and licenced by a number of recognised professional bodies.
Insolvency Services Account (ISA)
The account at the Bank of England into which money realised from the assets in bankruptcies and liquidations is paid.
Insolvency Service
A Agency within the Department for Business Innovation and Skills (“BIS”) responsible for regulating IPs and their recognised professional bodies.
Interest
A right to, or share in, an asset of the insolvent debtor or company, usually relating to a property.
Interim receiver
The court may appoint the Official Receiver to act as interim receiver of an individual’s property (usually to protect and secure it), after the presentation of the bankruptcy petition but before a bankruptcy order is made.
Legal charge
A form of security (e.g. a mortgage) to ensure payment of a debt.
Liquidation
A process relating to limited companies and limited liability partnerships involving the realisation and distribution of the assets and usually the closing down of the business. There are three types of liquidation – compulsory, creditors’ voluntary and members’ voluntary.
Liquidator
The Official Receiver or an Insolvency Practitioner appointed to administer the liquidation of a company or partnership.
London Gazette
Official publication of the Government, which contains legal notices for England & Wales. (The Gazette is also published in Edinburgh for Scottish Law cases.)
Member (of a company)
A person who has agreed to be, and is registered as, a member, such as a shareholder of a limited company or a member of a Limited Liability Partnership.
Nominee
Insolvency Practitioner who carries out the preparatory work for a Voluntary Arrangement, prior to its implementation.
Officer (of a company)
A director or secretary of a company.
Office Holder
A general term referring to an IP appointed as a Liquidator, Receiver, Supervisor, Administrator etc
Official Receiver (“OR”)
An officer of the Court and Civil Servant employed by The Insolvency Service, who deals with bankruptcies and compulsory company liquidations.
Petition
A formal application made to a Court. (See also bankruptcy petition and winding-up petition.)
Preferential Creditor
A creditor in insolvency proceedings who is entitled to receive a dividend in priority to other unsecured creditors. From 15 September 2003, PAYE/NI and VAT are no longer preferential for insolvency cases commencing on or after 15 September 2003.
Prescribed Part
A proportion of the assets of a company that are set aside for payment to unsecured creditors.
“Pre-pack”
Term commonly used in association with an administration where the sale of the business and assets of a company is agreed and ‘pre-packaged’ ready to be put in place immediately a company goes into administration.
Private Examination
A Liquidator in a voluntary winding-up or an Administrator may apply to Court for a private examination to be held in Court under oath of any person believed to be able to supply information on the company’s dealings, who does not wish to co-operate with the office holder.
Proof of Debt
A form completed by a creditor in to state how much is claimed against the debtor/company. The form is supplied by the Office Holder. It is a commonly used expression for requesting details of a creditor’s claim in any insolvency proceeding.
Provisional liquidator
OR/IP appointed to preserve a company’s assets between the presentation of a winding-up petition and the making of a winding-up order.
Proxy
Instead of attending a meeting, a person or company can appoint someone else to go and vote in their place - a 'proxy'.
Proxy Form
A form which must be completed if a creditor wishes someone else to represent them at a creditors’
meeting and vote on their behalf.
Public Examination
When a company is being wound up by the Court or in bankruptcy proceedings, the Official Receiver may at any time apply to the court to question the company’s director(s) or any other person who has taken part in the promotion, formation or management of the company or the bankrupt’s business.
Realise
To sell an insolvent company’s/debtor’s assets and obtain the proceeds.
Receiver
Commonly used name for an Administrative Receiver. The term can also mean a person appointed by the Court or with the power to “receive” the rents and profits of property. Receivers who are not administrative receivers do not need to be insolvency practitioners.
Receiver and Manager
When a Bankruptcy Order is made, the Official Receiver becomes Receiver and Manager to protect the bankrupt’s estate. This happens before the Official Receiver becomes trustee or before an IP is appointed as the trustee in their place.
Receivership
A company in administrative receivership is often said to be “in receivership”. Receivership can also be a Court process.
Rescission
A procedure which cancels a winding-up order.
Release
The process by which the Official Receiver or an IP is discharged from the liabilities and responsibilities of them being an Office Holder.
Secretary of State
The Secretary of State for the Department of Business Innovation and Skills (“BIS”). Responsible for overseeing the Insolvency Service.
Secured creditor
Creditor who holds security, such as a mortgage, over a company’s/person’s assets for money owed.
Shadow director
A person who, without being formally appointed as a director, gives instructions on which the directors of a company are accustomed to act. This does not include someone acting in the capacity as a professional adviser.
Statement of affairs
Document sworn under oath, completed by a bankrupt, company officer or director(s), giving details
of all assets and liabilities.
Statutory demand
A formal document issued as part of the enforcement of a debt, usually done through a solicitor.
Non-payment within 21 days is accepted as evidence of the insolvency of a company or individual.
Supervisor
IP appointed to “supervise” the carrying out of an individual or company voluntary arrangement.
Trustee (in bankruptcy)
The Trustee in bankruptcy is either the Official Receiver or an IP who takes control of a person’s assets. The Trustee’s main duties are to realise those assets and distribute the money among the creditors.
Unsecured creditor
A creditor who does not hold security (such as a mortgage) for money owed. Some unsecured creditors
may also be preferential creditors.
Voluntary liquidation
Process of liquidation not involving the Courts or the Official Receiver. There are two types of voluntary liquidation – members' voluntary liquidation for solvent companies and creditors' voluntary liquidation for insolvent companies.
Winding up order
Order of a Court, usually based on a creditor's petition, for the compulsory winding-up of a company or partnership.
What does an Insolvency Practitioner do?
Essentially an Insolvency Practitioner (“IP”) helps individuals, businesses and companies deal with their financial problems.
IP’s can find themselves handling the smallest of insolvent companies or individuals up to large corporate restructuring, with all sizes of cases in between. This also includes running businesses, constructing and negotiating deals or investigating and advising on the viability of a business and its restructuring (and, sometimes, the integrity of its directors.) The work of the IP affects the lives, prospects and livelihoods of both creditors and debtors.
Insolvency work is as much about people as it is about figures. IPs need the personality and skills to deal with angry creditors, anxious directors and distraught employees. The insolvency scene is always changing. In particular, the effects of changing legislation together with the attitudes of banks and other creditors mean that, more than ever, IPs are business rescuers.
Whilst much of the work done by IPs involves formal insolvency procedures, they also use their skills to restructure and rescue businesses without resorting to formal insolvency procedures. Where an IP is appointed in a formal insolvency, the most common procedures are the liquidation of companies by a variety of routes and bankruptcies of individuals.
Even these cases, regarded as the ‘end of the line’ for businesses, often require imagination and determination to try to save as much of the business (and its associated jobs) as possible, or as a last resort to get the best possible price for its assets.
Even where a formal insolvency procedure is necessary, in many cases a positive and proactive approach to the rescue of the business and its jobs can be taken through the application of administrations, administrative receiverships and voluntary arrangements. The insolvency profession generally has been able to rescue increasing numbers of jobs and businesses in recent years, both because of legislative changes and the changing attitudes of creditors.
Overall, as at 2009, over 25% of insolvent businesses enter a formal rescue prodecure in one form or another and over 44% of insolvent individuals enter a process other than bankruptcy.
Comfort in Regulation
Since 1986, all IPs have been required to be licensed by a recognised professional body, such as the ICAEW, the Law Society, the Insolvency Practitioners Association, or the Insolvency Service, to name but a few.
Only licensed IPs are authorised to take appointments as administrative receivers, administrators, liquidators, trustees in bankruptcy, supervisors of voluntary arrangements and trustees under deeds of arrangement and trust deeds.
Association of Business Recovery Professionals
The Association of Business Recovery Professionals, also known as “R3” - Rescue, Recovery and Renewal, represents IPs as an effective ‘trade body’ to the Government, media and the public at large. It provides technical support and promotes the highest standards of practice and professional conduct for IPs.
Members benefit from drawing on the expertise of highly experienced IPs who make up the various Committees of R3.
As a Fellow of the Association of Business Recovery Professionals you can be assured that I am an expert in my field and will be able to help with an individual’s or business’s needs.
There is no substitute for expert advice
I have been dealing with and advising individuals, directors and companies suffering financial distress since 1986. In that time I have come across many instances where the skills and determination of an IP have resulted in a business being saved, or creditors receiving a return and directors and individuals minimising their personal liabilities.
For those in financial distress where they may have no idea of what they can do, or who to turn to, advice from an IP can make all the difference between a sensible solution for them and their stakeholders, or a disaster.
IP’s can find themselves handling the smallest of insolvent companies or individuals up to large corporate restructuring, with all sizes of cases in between. This also includes running businesses, constructing and negotiating deals or investigating and advising on the viability of a business and its restructuring (and, sometimes, the integrity of its directors.) The work of the IP affects the lives, prospects and livelihoods of both creditors and debtors.
Insolvency work is as much about people as it is about figures. IPs need the personality and skills to deal with angry creditors, anxious directors and distraught employees. The insolvency scene is always changing. In particular, the effects of changing legislation together with the attitudes of banks and other creditors mean that, more than ever, IPs are business rescuers.
Whilst much of the work done by IPs involves formal insolvency procedures, they also use their skills to restructure and rescue businesses without resorting to formal insolvency procedures. Where an IP is appointed in a formal insolvency, the most common procedures are the liquidation of companies by a variety of routes and bankruptcies of individuals.
Even these cases, regarded as the ‘end of the line’ for businesses, often require imagination and determination to try to save as much of the business (and its associated jobs) as possible, or as a last resort to get the best possible price for its assets.
Even where a formal insolvency procedure is necessary, in many cases a positive and proactive approach to the rescue of the business and its jobs can be taken through the application of administrations, administrative receiverships and voluntary arrangements. The insolvency profession generally has been able to rescue increasing numbers of jobs and businesses in recent years, both because of legislative changes and the changing attitudes of creditors.
Overall, as at 2009, over 25% of insolvent businesses enter a formal rescue prodecure in one form or another and over 44% of insolvent individuals enter a process other than bankruptcy.
Comfort in Regulation
Since 1986, all IPs have been required to be licensed by a recognised professional body, such as the ICAEW, the Law Society, the Insolvency Practitioners Association, or the Insolvency Service, to name but a few.
Only licensed IPs are authorised to take appointments as administrative receivers, administrators, liquidators, trustees in bankruptcy, supervisors of voluntary arrangements and trustees under deeds of arrangement and trust deeds.
Association of Business Recovery Professionals
The Association of Business Recovery Professionals, also known as “R3” - Rescue, Recovery and Renewal, represents IPs as an effective ‘trade body’ to the Government, media and the public at large. It provides technical support and promotes the highest standards of practice and professional conduct for IPs.
Members benefit from drawing on the expertise of highly experienced IPs who make up the various Committees of R3.
As a Fellow of the Association of Business Recovery Professionals you can be assured that I am an expert in my field and will be able to help with an individual’s or business’s needs.
There is no substitute for expert advice
I have been dealing with and advising individuals, directors and companies suffering financial distress since 1986. In that time I have come across many instances where the skills and determination of an IP have resulted in a business being saved, or creditors receiving a return and directors and individuals minimising their personal liabilities.
For those in financial distress where they may have no idea of what they can do, or who to turn to, advice from an IP can make all the difference between a sensible solution for them and their stakeholders, or a disaster.
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