Insolvency technical update – April 2020
Insolvency technical update - Your round-up of recent developments in insolvency.
Coronavirus
This update relates to matter not directly linked to the coronavirus crisis. For coronavirus updates please go to the regularly updated A-Z of all things insolvency amid the coronavirus outbreak.
Consultation on Statements of Insolvency Practice
The Joint Insolvency Committee (JIC) is consulting on changes to a number of Statements of Insolvency Practice (SIPs) including SIP 3.1 - Individual voluntary arrangements, SIP 3.2 - Company voluntary arrangements, SIP 7 - Presentation of financial information in insolvency proceedings and SIP 9 - Payments to insolvency office holders and their associates.
The JIC recognises that these are testing times. But these are only proposed changes. There is no intention to amend the SIPS without careful consideration of the responses received and any plan to introduce changes will take into account any continuing challenges faced by the insolvency profession.
Further details about the consultation can be found in an article on icas.com.
The consultation closes on 20 July 2020 and responses should be emailed to swood@icas.com.
ICAS Code of Ethics
A revised and restructured Code of Ethics was introduced by ICAS on 1 January 2020. The new revised and restructured Part 5 of the 2020 ICAS Code of Ethics for Insolvency Practitioners is effective from 1 May 2020. An article was previously produced to accompany the publication of Part 5 and further articles looking at the specific aspects of the IP as an employee and inducements are available.
A reminder that a series of articles covering the main changes to the Code of Ethics is available on icas.com. Of particular relevance to Insolvency Practitioners are the articles on the structure of the Code, an enhanced conceptual framework, safeguards, inducements (including gifts and hospitality) and documentation.
Scottish Courts
A new practice note on commercial actions in the Sheriffdom of Tayside, Central and Fife has been issued. With immediate effect all corporate insolvency actions in the Sheriffdom are to be lodged in Perth Sheriff Court.
Dear IP 94
Dear IP 94 has been issued by the Insolvency Service covering Gazette Notices, IP responsibilities in relation to data protection, the new code of ethics and the increase in the prescribed part.
Dear IP 97
Dear IP 97 has been issued by the Insolvency Service. Aside from coronavirus-related matters, the update provides guidance on the treatment of payments made under the Victims Payments Regulations 2020.
HR1
An updated version of Form HR1 has been issued by the Insolvency Service.
Prescribed Part
The Insolvency Act 1986 (Prescribed Part) (Amendment) Order 2020 came into force on 6 April 2020.
The Order increases the prescribed part, payable to unsecured creditors from floating charge recoveries on the insolvency of a company, from £600,000 to £800,000.
AiB supervision Standard
The Accountant in Bankruptcy has published the latest edition of its ‘Supervision Standard’ newsletter. Aside from coronavirus news, the edition contains:
- Quarterly statistics
- Details of trustee Accounts going paperless
- Trustee Account update and helpful tips
- Adjudication and Supervision update and reminders
- Bankruptcy Restrictions update and reminders
Legal update
Royal Bank of Scotland plc v Munikwa [2020] EWHC 786 (Ch) RBS successfully challenged a practice by which employees of Creditfix “disregarded” modifications proposed by the bank within proxy forms. These modifications primarily related to the fees that could be charged by the nominee and supervisor of IVAs and in all but one case, the modifications would have resulted in lower fees.
Opinion of the Court in the appeal by HMRC in the remit under section 17G of the Bankruptcy (Scotland) Act 1985 by the AiB in the sequestration of VCY The Sheriff Appeal Court has confirmed that statutory interest is not payable in recalled sequestrations. A previous article on icas.com looked at the original judgment.
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