Insolvency Practitioners Bill to be revived and revised
The Insolvency Practitioners Bill was first introduced to Parliament in April 2010. The original aim of the Bill was to establish a “negative licensing system” for insolvency practitioners, with the Registrar of Companies having the power to ban people from acting as a liquidator or receiver, and to strengthen existing provisions relating to the automatic disqualification of insolvency practitioners. The Bill had its second reading in November 2013, but has been on hold since then.
The Government has now revived the Bill, and introduced a Supplementary Order Paper making significant changes to the original proposals.
The Bill now aims to introduce a coregulatory licensing framework. Insolvency practitioners would be required to be licensed by an accredited body under a new stand-alone Act. In addition, the changes would:
- Require insolvency practitioners to provide information and assistance to an insolvency practitioner that replaces them;
- Empower the court to make orders:
- Compensating any person who has suffered loss as a result of an insolvency practitioner’s failure to comply with any relevant enactment, rule of law, or court order; and
- Sanctioning insolvency practitioners who fail to comply with any relevant enactment, rule of law, or court order;
- Provide that, at a meeting of the creditors of a company or an entity in liquidation or administration, the vote of a related creditor will be disregarded (unless the court orders otherwise);
- Extend the circumstances in which an insolvency practitioner will be disqualified from acting by reason of the practitioner’s association with the affected company or entity; and
- Impose obligations on insolvency practitioners to provide detailed reports on insolvency engagements.
As the changes proposed are substantive, the Bill has been referred back to the Select Committee. Submissions on the Bill can be made until 24 August 2018.
If you have any questions or would like assistance with making submissions, please contact a member of our insolvency and restructuring team.
Disclaimer: the content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.