Information for creditors in insolvency proceedings
Information applicable to insolvency proceedings in the UK:
Creditors guides to the fees charged by insolvency practitioners
The Creditors' Guides featured which can be accessed from the link below, provide explanations of Creditors' rights with regard to Insolvency Practitioners' fees for insolvency appointments.
Each document explains how an Insolvency Practitioner seeks approval of their fees, what information a Creditor can expect to receive and what a Creditor can do if they are dissatisfied with the level of a Practitioner's fees.
From the link below, simply select the document you require to view depending on the date of the commencement of the insolvency proceedings.
View Creditors Guides to Fees - England & Wales (R3.org.uk)
View Creditors Guides to Fees - Scotland (R3.org.uk)
Creditors' Guide to Committees
Please use the link below to access a Guide to Committees. This guide will provide you with an understanding of the role of the Committee in insolvency proceedings, information on both how Committees are formed and what might be expected of you should you choose to serve as a member of a Committee.
View Creditors Guide to Committees (R3.org.uk)
Statements of Insolvency Practice ("SIP")
The purpose of Statements of Insolvency Practice is to promote and maintain high standards by setting out required practice and harmonising the approach of Insolvency Practitioners' to particular aspects of insolvency practice. They apply in parallel to the prevailing statutory framework.
SIPs set principles and key compliance standards with which Insolvency Practitioners' are required to comply. Failure to observe the principles and/or maintain the standards set out in a SIP is a matter that may be considered by an Insolvency Practitioners' regulatory authority for the purposes of disciplinary or regulatory action in accordance with that authority's membership and disciplinary rules.
SIPs set out required practice, but they are not statements of the law or the obligations imposed by insolvency legislation itself.
You can view the SIP's from the link below and selecting the relevant document:
View Statements of Insolvency Practice (r3.org.uk)
Creditors Insolvency Guide
R3, the UK insolvency trade body has set up a website to help creditors to understand the insolvency process, this can be accessed from the following link:
View R3 Creditor Insolvency Guide (creditorinsolvencyguide.co.uk)
For further information regarding FRP Advisory LLP, please go to www.frpadvisory.com.
Creditors' right to elect to opt out from receiving further correspondence in relation to insolvency proceedings in England and Wales and Scottish Corporate insolvency proceedings
During the course of an insolvency process, the appointed insolvency practitioner(s) have to provide various documents to the creditors of the company or individual of whose affairs they are dealing with. In order to minimise the administrative costs and in order to assist creditors in those matters in which they have no further interest, a creditor has the right, at any time during the insolvency proceedings, to elect to opt out of receiving further documents about the insolvency proceedings of which they are a creditor.
In accordance with the Insolvency Rules, an opted out creditor would not receive routine documentation relating to the proceedings such as progress reports however they would receive documents where:
- the Insolvency Act requires a document to be delivered to all creditors without expressly excluding opted-out creditors; or
- it is a notice relating to a change in the insolvency practitioner or the insolvency practitioner's contact details; or
- it is a notice of a dividend or proposed dividend or a notice which the court orders to be sent to all creditors or all creditors of a particular category to which the creditor belongs.
Opting-out does not affect a creditor's entitlement to receive dividends should any be paid to creditors.
Unless the Insolvency Rules provide to the contrary, opting-out does not affect any right a creditor may have to vote in a decision procedure or a participate in a deemed consent procedure in the insolvency proceedings, although the creditor will not receive notice of it.
A creditor who opts out will be treated as having opted out in respect of any consecutive insolvency proceedings of a different kind in respect of the same company or individual.
How to opt out
A creditor who wishes to opt out must do so in writing by delivering to the appointed insolvency practitioner(s) a notice which must be authenticated and dated by the creditor. A creditor becomes an opted-out creditor when the notice is delivered to the appointed insolvency practitioner(s).
A creditor wishing to opt out can complete the opt out election form and send it to the appointed insolvency practitioner(s) in question using the contact details on the initial communication sent to the creditors.
A creditor who opts out will be treated as having opted out in respect of any consecutive insolvency proceedings of a different kind in respect of the debtor company or individual.
Ceasing to opt out
A creditor may revoke the election to opt out, at any time, by a further notice in writing, authenticated and dated by the creditor and delivered to the appointed insolvency practitioner(s). The creditor ceases to be an opted-out creditor from the date the notice is received by the appointed insolvency practitioner(s).
A creditor wishing to opt back in can complete the revocation of election to opt out form and send it to the appointed insolvency practitioner(s) in question using the contact details on the initial communication sent to the creditors.
Should creditors have any queries regarding their right to opt out from receiving further documentation they should contact the office holder of the insolvency proceedings of which they are a creditor.