M3.3 - IVAs the nominee & supervisor Flashcards
What are the functions of a nominee?
Provide some assurance that the debtor’s IVA
proposal is worthy of consideration, by providing their opinion as
to whether:
▪ the proposal as a reasonable prospect of being approved and
implemented
▪ the creditors should or should not be invited to consider the proposal
What are the powers of a nominee for an IVA?
▪ To require the debtor to provide more information in order that the nominee can
form an opinion
▪ To require the debtor to disclose whether they have been involved in any other
corporate or personal insolvency proceedings
▪ To require the debtor give access to accounts and records
▪ To report a positive or negative opinion as to whether a decision procedure
should be convened to consider the proposal
What are the initial duties of a nominee?
Once they have consented to act, they are required to report
The nominee may be replaced by the court if they fail to report within the required 14 days
In the leading case of Greystoke v Hamilton-Smith [1996], the court set out that in forming an opinion, the nominee should be satisfied:
▪ FIT: Whether or not the debtor’s financial position is materially different from that contained in the proposal
▪ FAIR: Whether or not the IVA is manifestly unfair
▪ FEASIBLE: Whether or not the IVA has a reasonable prospect of being approved
and implemented
How long does the nominee have to report their opinion?
14 days
To whom must the nominee report?
Within 14 days:
▪ the debtor (in all cases)
▪ The court (only where there was an interim order)
▪ The OR and trustee (only if the debtor is an undischarged bankrupt)
▪ The creditors (if the decision was positive and a decision procedure is being convened)
What are the nominee’s duties if opinion positive?
The nominee must convene and conduct the decision procedure in accordance with the rules
How long does the nominee have to deliver notice of outcome of creditors’ consideration of the proposal?
4 days - whether or not approved
If approved, how long does the nominee have to register the IVA with the SoS, paying the prescribed fee?
14 days
Does a nominee have a duty to report criminal offences?
Yes
What are the functions of the supervisor of an IVA?
Acts as a ‘referee’ with integrity and objectivity:
In a consumer IVA, the functions of the supervisor typically include:
▪ Collecting income contributions / periodic reviews
▪ Realising the assets of the arrangement
▪ Adjudicating creditors’ claims
▪ Discharging the costs of the IVA (and any prior bankruptcy)
▪ Making distributions to creditors
▪ Take steps to fail the arrangement where the debtor is in breach of their obligations
(no automatic vesting of assets)
What statutory powers does a supervisor have?
Power to apply to court for directions
▪ Irrespective of whether case commenced with an interim order
Power to present a bankruptcy petition
Power to apply to court for an order in respect of transactions defrauding creditors under s423
How can any act, omission or decision of a supervisor be challenged?
Any person who is dissatisfied by any act omission or decision of the supervisor may apply to court to challenge it
The court may
▪ Confirm, reverse or modify any act or decision of the supervisor
▪ Give him directions
▪ Make such other order as it thinks fi
How often must the supervisor report to creditors?
Annually on the progress and prospects for full implementation.
To whom must notice of any termination or full implementation be given?
the debtor
all creditors bound by the IVA
the Secretary of State
A How long after the end of a period does the supervisor have to deliver their annual progress report?
B What must accompany the progress report?
A 2 months
B R & P account
