Short form questions Flashcards

Question

Who may be summoned by the OR to appear before the court for a private examinationin a bankruptcy?

Answer 1

Bankrupt Bankrupt’s spouse Any person who has property comprised in the estate Bankrupt’s debtors Any person who has dealings with the Bankrupt/estate

Answer 2

Insure the assets Maintain books and records and accounts in relation to appointment Dispose of perishable assets

Answer 3

May not act as solicitor or insolvency practitioner Cannot act as director Partnerships – dissolve automatically Cannot be a sole trader without disclosing name in which made subject to DR

Answer 4

i Show the amount £12250 as an expense. Show the balance as a distribution to unsecured creditor. ii £2500 as a payment. Note the RoT creditor return of goods iii Record as a receipt and payment. Record as remuneration £250 plus VAT and source of fee. Iv Record the amount gross with a payment to agent

Answer 5

``` Cat 1 disbursements (no authorisation needed) Bond Postage Travel – train fares Statutory advertising Insurance Printing – 3rd party Room hire – 3rd party ``` Cat 2 disbursements (authorisation needed) Mileage Room hire (where firm charges) Printing/photocopying (where firm charges)

Answer 6

Inform supervisor within 14 days Inform supervisor within 14 days of any payment Pay supervisor any amount received in excess of 6 months net take home pay Where possible, continue with monthly payments Keep supervisor informed of changes to employment status

Answer 7

``` Source of initial introduction Extent of preappointment involvement Alternative options considered Consultations with major creditors Requests for funding made Registered charges Whether business acquired in previous 24 months through an insolvency process Names and details of valuers Value for goodwill Whether prepack pool approached or not Viability statement obtained or reasons why it hasn’t been obtained ```

Answer 8

Ceases to be a creditor Found not to be a creditor Misses 3 consecutive meetings Becomes bankrupt

Answer 9

Supervise the business of the company | Report to liquidator with receipts and payments

Answer 10

Winding up order Administration order Bankruptcy of partner Bankruptcy of all partners and a winding up of partnership

Answer 11

a) Trustee must vacate office Trustee must return assets to Bankrupt b) Discharged from all provable debts Released from disabilities of bankruptcy

Answer 12

Approval of CVA | Proposed modifications

Answer 13

``` Power to trade power to sell all assets Power to instruct solicitors and agents Power to mortgage Power to sign all documents Power to enter into contracts Power to take custody of assets Power to open a bank account ```

Answer 14

Insolvency Act 1986 Insolvency Rules 2016 Money Laundering Regulations 2017 EC Regulations 2000 Statements of Insolvency Practice 1-17 Technical Guidance papers Company directors disqualification act 1986 UNCITRAL Model Law on Cross Border Insolvency Practice Direction on insolvency proceedings

Answer 15

``` Name of company Company registered office Company registered number Type of company – limited by shares Identity of creditor Particulars of debt EC Regulation applies Contact details for who to contact to resolve debt ```

Answer 16

IPs are required to: Establish procedures to identify customers and verify their identities Determine those with controlling interest ie beneficial owners Carry out ongoing monitoring of business relationships Appoint a nominated officer called a 'Money Laundering Officer' (MLO), or 'Money Laundering Reporting Officer' (MLRO) to whom principals and employees must make money laundering reports. This does not apply to sole practitioners who do not employ any staff or act in association with any other parties. Maintain records of client identification and of business relationships for at least five years Maintain a continuing obligation to review Report suspicions of money laundering to NCA Specifically under 2017 Regulations IPs must: Conduct money laundering and terrorist financing risk assessments Implement systems, policies, controls and procedures to address money laundering and terrorist financing risks Apply policies, procedures and controls across the IP firm’s group structure (if relevant) Adopt appropriate internal controls Provide training to staff Comply with customer due diligence, enhanced due diligence and simplified due diligence requirements and comply with requirements relating to politically exposed persons. Under the Regulations a relevant person must consider both customer and geographical risk factors in deciding whether a simplified due diligence is appropriate. The Regulations also create a black list of high risk jurisdictions. If a transaction involves parties from such jurisdictions enhanced due diligence and risk assessment will be compulsory.

Answer 17

Issue default notice Petition for bankruptcy Call creditors meetings Apply to court for directions

Answer 18

Correspondence Electronic meeting Virtual meeting Physical meeting Any other decision making procedure which enables all creditors who are entitled to participate in the making of the decision to participate equally

Answer 19

10% in value; or 10% in number; or 10 creditors

Answer 20

Falsification of company records Misconduct during the course of winding up Failure to co-operate with the liquidator Material omission from the statement of affairs False representation

Answer 21

Challenge the trustee’s remuneration and expenses Request further information from the trustee Object to the trustee’s release

Answer 22

It is feasible Fair to debtors and creditors Fit to be put to creditors Provides an acceptable alternative to bankruptcy

Answer 23

That the company should be wound-up by the members of the company That both directors may swear a declaration of solvency That a general meeting of the company’s members should be called That a director be nominated to chair the general meeting That notice of the proposed liquidation should be given to any qualified floating charge holder

Answer 24

Declaration must contain a sworn statement by the directors that: They have made full inquiry into the company’s affairs; and They have formed the opinion that the company will be able to pay its debts in full plus interest within 12 months from the commencement of the winding up. The declaration must include a statement of the company’s assets and liabilities The declaration must be made within 5 weeks immediately preceding the date of the passing of the resolution for winding up.

Answer 25

An obligation arising under a confiscation order made An obligation arising from a payment out of the social fund under section 138(1)(b) of the Social Security Contributions and Benefits Act 1992 by way of crisis loan or budgeting loan A fine imposed for an offence An obligation (other than an obligation to pay a lump sum or to pay costs) arising under an order made in family proceedings An obligation arising under a maintenance assessment made under the Child Support Act 1991 Statute barred debts after six years Non-EU tax claims Gaming debts Post bankruptcy order debts

Answer 26

The place which they reside The choices made by the person concerned, test is objective The date on which the COMI is to be established is when the insolvency proceedings were opened Discernible to third parties especially creditors and potential creditors Degree of permanence

Answer 27

Office holder’s remuneration, showing the amounts paid on each basis Amounts paid to the office holder out of the estate in respect of pre-appointment costs Sums paid to the office holder in respect of supervision of trading All other amounts required to be approved in the same manner as remuneration Amounts paid to sub-contractors for work that would otherwise have to be carried out by the office holder or their staff Any remuneration or disbursements paid to the office holder other than out of the estate, giving the amounts paid, the name of the payor, its relationship to the insolvent estate and the nature of the payment.

Answer 28

Insurance company Bank Party to a market contract or money market contract Participants in settlement systems

Answer 29

The advantages and disadvantages of each available option to the debtor The key stages and roles of the adviser / nominee / supervisor Any potential delays or complications Likely duration of the IVA What is required of the debtor The consequences of proposing and entering into an IVA What may happen if the IVA is not approved or not successfully completed

Answer 30

He may vote as he wishes and to the value of £6,800 | As he is a creditor in his own right, he does not need to have submitted a proxy form to be eligible to vote

Answer 31

The partnership is automatically dissolved The bankrupt’s share in the partnership vests in the trustee on appointment The deed often provides for expulsion of the bankrupt partner and some mechanism for valuing and buying out of the bankrupt’s share by the other partners If no such buy-out provision the trustee may bring proceedings against the firm to realise the bankrupt’s interest in the partnership

Answer 32

Duty to insure Duty to keep property in repair Power to collect rent and income

Answer 33

An individual enters into a transaction with a person at an undervalue if he; Makes a gift to that person or he otherwise enters into a transaction with that person on terms that provide for him to receive no consideration Enters into a transaction with that person in consideration of marriage, or Enters into a transaction with that person for a consideration the value of which is significantly less than the true value Relevant time - A time period of 5 years ending with the day of the presentation of the bankruptcy petition on which the individual is adjudged bankrupt Insolvency - If the transaction was entered into between 2 and 5 years prior to the presentation of the petition the trustee has to prove insolvency at the time of the transaction If the transaction was entered into less than 2 years the trustee does not have to prove insolvency Insolvency is defined as the debtor being unable to pay their debts as they fall due or where the value of their assets are less than the amount of liabilities Insolvency is presumed if the transaction at undervalue was to an associate

Answer 34

Identification of goods Evidence that the goods came from the claimant Incorporation of ROT terms into the contract Evidence of acceptance of the ROT terms by purchaser Type of clause - Simple or All Monies? Are the good branded or marked? May require licensee’s permission if so. Do we need the stock to continue to trade Is there a better alternative supplier Condition of the goods If converted can the good be removed easily

Answer 35

Mention of Section 305 of the Act The trustee has a duty to take possession of the estate including books, papers and records The trustee has a duty to provide information, documentation and other assistance to the OR The trustee has a duty to make payments into the Insolvency Services Account (ISA) of all monies received by him in the carrying out of his functions The trustee must bank funds received once every 14 days or immediately if £5,000 or more has been received The trustee has a duty to prepare and maintain records and accounts All financial records retained for a period of six years following his vacations from office The trustee must at the request of the SoS send to him an account of his receipts & payments The trustee must provide the final meeting of creditors with a report including a summary of his receipts and payments and a statement that he has reconciled his accounts The trustee must obtain sanction if so required of the creditor’s committee (or SoS)

Answer 36

Prepare cash-flow forecasts Identify sources of working capital Identify employee requirements Ensure employees will continue to support Identify customers and ensure they will support Ensure suppliers will continue to deal with the company Identify stock subject to ROT claims Consider health and safety issues Consider environmental issues If trading premises is leased that the landlord will support Undertakings to utility companies

Answer 37

Integrity An insolvency practitioner should be straightforward and honest in all professional and business relationships Objectivity An insolvency practitioner should not allow bias, conflict of interest or undue influence of others to override professional and business judgements Professional competence and due care An insolvency practitioner has a continuing duty to maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service based on current developments Confidentiality An insolvency practitioner should respect the confidentiality of information acquired as a result of professional and business relationships and should not disclose any such information to third parties without proper and specific authority unless there is a legal or professional right or duty to disclose Professional behaviour An insolvency practitioner should comply with relevant laws and regulations and should avoid any action that discredits the profession

Answer 38

Where a floating charge is created on or after 15 September 2003, a prescribed amount must be set aside from floating charge realisations to be paid over to unsecured creditors (s176A). The prescribed part is calculated as follows: } 50% of the first £10,000 of the net property } Plus 20% of the balance } Up to a maximum prescribed part of £600,000

Answer 39

If the liquidator wishes to reject a creditor's proof he should prepare a written statement detailing the reasons for rejecting the creditor's claim and send it to the creditor as soon as reasonably practicable R14.7(2))

Answer 40

Any of the following may be required to attend a private examination under s366: } The bankrupt } The bankrupt's spouse or former spouse } Any person known or believed to have any property comprised in the bankrupt's estate in his possession } The bankrupt's debtors } Any person appearing to the court to be able to give information concerning the bankrupt's dealings, affairs or property

Answer 41

The two main types of ROT clauses are: } Simple clause which prevents ownership of specific goods passing until payment is received for those specific goods } All monies clause which seeks to retain ownership of goods until all outstanding sums due to the supplier are paid

Answer 42

Broadcast The business should be marketed as widely as possible proportionate to the nature and size of the business – the purpose of the marketing is to make the business's availability known to the widest group of potential purchasers in the time available, using whatever media or other sources are likely to achieve this outcome. } Justify the marketing strategy The statement to creditors should not simply be a list of what marketing has been undertaken. It should explain the reasons underpinning the marketing and media strategy used. } Independence Where the business has been marketed by the company prior to the insolvency practitioner being instructed, this should not be used as a justification in itself to avoid further marketing. The administrator should be satisfied as to the adequacy and independence of the marketing undertaken. } Publicise rather than merely publish Marketing should have been undertaken for an appropriate length of time to satisfy the administrator that the best available outcome for creditors as a whole in all the circumstances has been achieved. Creditors should be informed of the reason for the length of time settled on. } Connectivity Include online communication alongside other media by default. The internet offers one of the widest populations of any medium. If the business is not marketed via the internet, this should be justified. } Comply or explain Particularly with sales to connected parties where the level of interest is at its highest, the administrator needs to explain how the marketing strategy has achieved the best available outcome for creditors as a whole in all the circumstances.

Answer 43

Must be unable to pay his debts } Have unsecured debts of less than £20,000 } Have assets of less than £1,000. When assessing the value of assets motor vehicles with a maximum value of £1,000 are excluded. Also excluded are approved personal pensions } Have surplus income of less than £50 per month } Be domiciled in England or Wales, or for the last three years have been resident or carrying on a business there } Not be involved in any other formal insolvency procedure at the time of the application for a DRO ie current IVA or bankruptcy or be subject to a bankruptcy restrictions order or undertaking } Not have entered into any transaction at an undervalue or preference in the two years preceding the application } Not have been subject to a DRO in last six years } Must be no pending bankruptcy petition

Answer 44

The employee claims in an insolvent liquidation are: } Holiday pay – all accrued holiday pay may be claimed as preferential } Wage arrears – up to four months may be claimed preferentially to a maximum of £800, remainder will be unsecured claim } Pay in lieu of notice – unsecured claim } Redundancy pay – unsecured claim } Occupational pension scheme – preferential for employer contributions for up to 12 months and employee contributions for up to four months

Answer 45

Intimidation threats – the IP may be deterred from acting objectively and making a proper investigation into the preference because of the threats being made by the director.

Answer 46

The husband's connection to a major creditor may give rise to a self-interest threat and a familiarity threat. The self interest threat occurs as a result of the financial interest the husband has in the business. The familiarity threat occurs because the IP may need to establish the level of the disputed claim and her overall objectivity may be impaired.

Answer 47

He will need to make an on-line application to an Adjudicator (an official employed by the Insolvency Service) } By s263J the application must contain the “prescribed particulars” of his creditors, debts and other liabilities and assets and these are listed in rule 10.35 } The adjudicator will then determine whether or not to make a bankruptcy order within a period of 28 days from the submission of the application. If satisfied that Cliff is unable to pay his debts or likely to become unable to pay them the adjudicator will make a bankruptcy order } Pay deposit } Pay adjudicator fee } The OR will be appointed trustee of Cliff's estate

Answer 48

The liquidator prepares a notice of disclaimer, authenticates and dates it·Within 7 business days of the notice the liquidator must send a copy to:·Anyone who claims an interest in the property·Anyone who is under any liability arising from the property (unless it will be discharged bythe disclaimer)·A copy of the disclaimer must be sent to the Registrar of Companies and the Land Registrywhere the disclaimer relates to registered land

Answer 49

· Ensuring transactional processing is conducted in a timely manner · Seeking to ensure that solicitors and agents holding estate money account for those funds in a timely manner · Allowing only appropriate persons within the entity to conduct transactions · Adequate supervision of personnel with access to funds · Limiting the size of transactions that can be processed by different grades of staff · Implementing secure and robust authorisation procedures within the entity · Regular reconciliation of estate and client accounts · Periodic risk assessment of transactional processes within the entity · Requiring joint signatories or joint authentication

Answer 50

A proxy is a document made by a creditor (or member or contributory) which directs or authorises another person (“the proxy-holder”) to act as the representative of the creditor (or member or contributory) at a meeting or meetings by speaking, voting, abstaining, or proposing resolutions. A specific proxy relates to a specific meeting whereas a continuing proxy may be used at more than one meeting in the insolvency proceedings. A specific proxy must: · direct the proxy-holder how to act at the meeting by giving specific instructions; or · authorise the proxy-holder to act at the meeting without specific instructions; or · contain both direction and authorisation. A continuing proxy must authorise the proxy-holder to attend, speak, vote or abstain, or to propose resolutions without giving the proxy-holder any specific instructions how to do so.

Answer 51

``` Petition to bankrupt Issue default notice Apply to court for directions Convene a creditors decision making step to vary an IVA Power to insure ```

Answer 52

Duty to creditors Duty to cooperate Duty to give full and frank disclosure of all circumstances Criminal offence to embark on an IVA fraudulently Duty to cooperate at all times with supervisor Cannot mislead the creditors Real financial position cannot be materially different to that represented to the creditors

Answer 53

``` Details of proceedings Details of company Identify officeholder Date of appointment Progress during the period Information relating to remuneration Details of remaining work Receipts and payments account Basis for fees Fees drawn or remaining to be drawn Expenses incurred Creditors right to request further information on fees Right to challenge fees as excessive ```

Answer 54

* Assets * Liabilities * Security held * Dates of the securities held

Answer 55

* Debtor * Creditors notified of meeting * Creditors not notified of meeting * Nominee * Supervisor

Answer 56

* Proposal was approved or rejected * Modifications * Voting on each resolution * Such other information as chairman thinks appropriate to make known to the court and the creditors

Answer 57

* Name and postal address of the officeholder acting * Capacity * Date of appointment * Email address and telephone number * Name of any other person who can be contacted relating to the matter * IP licence number * Court details/case number

Answer 58

By s143 the functions of a liquidator are to secure that the assets of the company are got in, realised and distributed to the company's creditors and, if there is a surplus, to the persons entitled to it

Answer 59

Full details of inability to pay must be shown to the supervisor's satisfaction No more than the equivalent of three months payments can be agreed to be missed in this way The duration of the IVA will be extended by the same number of months for which payments have been suspended to recover the sums due, unless the debtor has made good the shortfall

Answer 60

Power to sell any part of the property being comprised in bankrupt's estate Power to refer to arbitration, or compromise on such terms as may be agreed, any debts, claims or liabilities Power to make such compromise or other arrangement as may be thought expedient with respect to any claim arising out of or incidental to the bankrupt's estate Power to give receipts for any money received by him Power to prove, rank, claim and draw a dividend in respect of debts due to the debtor Power to exercise the powers vested in him under the Act in relation to property comprised in the bankrupt's estate Power to deal with any property comprised in the estate to which the bankrupt is beneficially entitled as tenant in tail

Answer 61

Include a record of every resolution passed at the meeting and in the event of a poll being taken, the value or number of votes for and against If a liquidation committee has been established include the names and addresses of those elected Title of proceedings Date, time and venue of meeting Name and description of chairman and any other person involved in conduct of proceedings A list of creditors attending or represented at meeting Name of any officer or former officer attending the meeting The exercise of any discretion by the chairman in relation to admissibility or value of any claim for voting purposes Where a meeting has been asked to approve the liquidator's remuneration, the information provided to the meeting in support of that request should be included. The minutes must be authenticated by the chairman.

Answer 62

Fine, imprisonment or both

Answer 63

Company is insolvent (unable to pay debts) Purpose of administration is likely to be achieved

Answer 64

All payments have been made The debtor has fully explained any breach to the supervisor Paid the supervisor any sum requested to compensate the creditors for any reduction in dividend caused by the breach

Answer 65

• The amount of the debt is more than £5000 (current limit) The debt is for a liquidated sum either immediately or at some future time It is an unsecured amount The debtor appears either unable to pay or has no reasonable prospect of paying There is no outstanding application to set aside a statutory demand served on the debtor in respect of the debt

Answer 66

The supervisor can extend the arrangement by sending an extension notice to the debtor and all the creditors This may be done once or twice First extension can be up to 6 months Second extension can be up to 3 months Notice must be served at least 7 days before the arrangement is due to expire and must state the reasons for the extension

Answer 67

* The circumstances leading to the bankruptcy * Summary of the debtors assets * Summary of the debtors liabilities * Details of interest payable on the debts * Proof the debts are going to be paid in full * Details of the creditors known to him which have not proved * Such other matters as necessary for the information of the court * Particulars to which expenses have been paid or secured and if secured the extent to which that security is satisfactory * Trustee must also provide details of remuneration and expenses (but not the Official Receiver)

Answer 68

* State whether the proposal was approved or rejected * What modifications were made if approved * Resolutions taken at the meeting * Decision on each resolution * List the creditors who were present or represented at the meeting * How the creditors voted on each resolution * EC regulation applies to the arrangement * Such other information as chairman thinks appropriate to make known to the court and the creditors * As soon as reasonably practicable after the chairmans report is filed at court or within 4 business days of the meeting being held if not filed at court

Answer 69

• Arrears of wages • Holiday pay • Contribution to any occupational pension schemes • Any compensation covered by the Financial Services Compensation scheme Coal and steel levies

Answer 70

State that all relevant documents will be made available for viewing and downloading on a website Specify the address of the website Specify any password necessary to view and download a relevant document from the site Include a notice that any person to whom notice is given, delivered or sent may at any time request that hard copies of all, or specific, relevant documents are sent to that person Specify a telephone number, email address and postal address which may be used to make the request.

Answer 71

The nominee shall be chair of the meeting. If for any reason the nominee is unable to attend, s/he may nominate another person to act as chairman in his place. The person so nominated must be: (a) a person qualified to act as an insolvency practitioner in relation to the debtor; (b) an authorised person in relation to the debtor; or (c) an employee of the nominee or his firm who is experienced in insolvency matters.

Answer 72

Section 435(6) A company is an associate of another company: (a) If the same person has control of both, or a person has control of one and persons who are his associates, or he and persons who are his associates, have control of the other, or (b) If a group of two or more persons has control of each company, and the groups either consist of the same persons or could be regarded as consisting of the same persons by treating (in one or more cases) a member of either group as replaced by a person of whom he is an associate.

Answer 73

- Such clothing, bedding, furniture, household equipment and provisions as are necessary for satisfying the basic domestic needs of the bankrupt and his family – Property held by the bankrupt on trust for any other person – A tenancy which is an assured tenancy, a protected tenancy, a secure tenancy, or tenancy of a dwelling house. - Right of nomination to a vacant ecclesiastical benefice - Personal correspondence (Haig v Aitken) - Titles of honour - Compensation claims for pain and suffering or injured feelings - Interest in an approved pension scheme - Items not vested in the bankrupt at commencement

Answer 74

s263 IA86 an application may be made by: – The debtor, or – Any of his creditors, or – Any other person who is dissatisfied by any act, omission or decision of the supervisor. On such an application, the court may: – Confirm, reverse of modify any act or decision of the supervisor, or – Give him directions, or – Make such other order as it thinks fit. – The court may also appoint another person qualified to act as supervisor either in substitution for the existing supervisor or to fill a vacancy

Answer 75

Where there are surplus funds in the estate, these should be applied in paying interest on the creditors' claims in respect of periods during which they have been outstanding since the company went into liquidation (from the date of the winding up order to the date the debts were paid in full). s189(4) –the rate of interest payable is the greater of: (i)The rate specified in s17 Judgments Act 1838 on the day on which the company went into liquidation (currently 8%) (ii)The rate applicable to that debt apart from the windingup

Answer 76

s189 –All interest paid on any debt proved in the windingup in respect of past winding up order periods shall rank equally, whether or not the debts on which it is payable rank equally.

Answer 77

This initial review should include: Ascertaining the location, safeguarding, and listing the company's books, records and other accounting information. Inviting the liquidation committee and creditors of the company to bring to his attention any matters of concern. Questioning officers of the company and other senior officials as to the company's affairs, including the reasons for the company's failure and the location of the company's books and records. Comparing the Statement of Affairs with the last audited, filed or management accounts in order to identify material movements in fixed and current assets. Reviewing the books, records and minutes for the last six months to identify unusual and exceptional transactions. Identifying possible rights of action against third parties.

Answer 78

This initial review should include: Ascertaining the location, safeguarding, and listing the company's books, records and other accounting information. Inviting the liquidation committee and creditors of the company to bring to his attention any matters of concern. Questioning officers of the company and other senior officials as to the company's affairs, including the reasons for the company's failure and the location of the company's books and records. Comparing the Statement of Affairs with the last audited, filed or management accounts in order to identify material movements in fixed and current assets. Reviewing the books, records and minutes for the last six months to identify unusual and exceptional transactions. Identifying possible rights of action against third parties.

Answer 79

Where the liquidator believes there are grounds for furtherinvestigation or possible actions, he should discuss the matter with the liquidation committee in order to ascertain their views. Funding issues should also be discussed with the committee. The committee should then be reported to as the investigation progresses. The liquidator can correspond with the committee (electronic communication possible) or hold a meeting either in person or remotely. If there is no committee, the liquidator should seek the views of the creditors, either by correspondence, a creditors' meeting, or discussions with the major creditors. Major creditors may be more likely to agree to fund any litigation.

Answer 80

R15.28states that at a decision procedure, a person is only entitled to vote as a creditor if there has been duly lodged a proof of debt;and the proof was received by the convenor not later than the decision date;and the proof has been admitted for the purpose of entitlement to vote

Answer 81

A liquidator can resign in the following circumstances: 1 - Ill health 2 - Intends ceasing to be an IP 3 - That there are joint liquidators and it is no longer expedient to have more than one 4 - A conflict of interest/change in personal circumstances precludes or makes continuation impractical

Answer 82

Principal must have regard to the professional conduct guidance of his authorising body. He should: Agree and record the identity of the instructing client. It must be clear whether the instructing party is the company, its board of directors or one or more directors individually Act in the interests of his client with objectivity, integrity and independence Ensure that his client is made aware of the matters of his statutory obligations re acquisition of company assets by connected parties, re-use of name of insolvent company, protecting interests of creditors Consider whether client has any conflicts of interest or duty and bring any such conflicts to attention of client Not accept instructions to assist a client in conduct which will undermine public confidence in the proper administration of insolvency procedures Principal must cease to act if his advice to the directors that an actor omission would amount to misfeasance is disregarded.

Answer 83

The source of administrator's initial introduction The extent of the administrator's involvement prior to appointment Any marketing activities conducted by the company and/or administrator Any valuations obtained of the business or the underlying assets The alternative courses of action that were considered by the administrator, with an explanation of possible financial outcomes Why was it not appropriate to trade the business and offer it for sale as a going concern during the administration Details of requests made to potential funders to fund working capital requirements Whether efforts were made to consult with major creditors The date of the transaction Details of the assets involved and the nature of the transaction The consideration for the transaction, terms of payment and any condition of the contract that could materially affect the consideration If the sale is part of a wider transaction, a descriptionof the other aspects of the transaction The identity of the purchaser Any connection between the purchaser and the directors, shareholders or secured creditors of the company The names of any directors, or former directors of the company who are involved in the management or ownership of the purchaser, or of any other entity into which any of the assets are transferred Whether any directors had given guarantees for amounts due from the company to a prior financier, and whether that financier is financing the new business Any options, buy-back arrangements or similar conditions attached to the contract of sale

Answer 84

The information must be provided with the first notification to creditors. The administrator should call an initial meeting of creditors as soon as possible after his appointment. If there is no meeting then the administrator must include the information in the statement of proposals which must be sent as soon as practicable. However Dear IP 42 states that disclosure of information should be happen within 14 days of completion of the sale unless there are exceptional circumstances. Non disclosure may occur for reasons of commercial confidentiality provided the parties are not connected.

Answer 85

The liquidator may request that the remuneration be increased by a resolution of creditors or, if still considered insufficient, may apply to the court for an order increasing its amount or rate. The liquidator must give at least 14 days' notice of his application to members of the liquidation committee, who may appear at the hearing or be represented.

Answer 86

Prepare cash-flow forecasts Identify sources of working capital Identify employee requirements Ensure employees will continue to support Identify customers and ensure they will support Ensure suppliers will continue to deal with the company Identify stock subject to ROT claims Consider health and safety issues Consider environmental issues If trading premises is leased that the landlord will support Undertakings to utility companies

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