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Chapter 40
February 2006
PART 11
Every creditor of the company is entitled to a copy of the petition from the petitioner or petitioning solicitor within 2 business days of requiring it, on payment of the appropriate fee [note 1].
40.161 Creditors’ right to inspect proofs
So long as lodged proofs are in his/her hands, the liquidator or trustee must allow them to be inspected by any creditor who has submitted a proof (which has not been rejected) or any person acting for such creditor, at all reasonable times on any business day [note 2].
40.162 Right to object to decision on proof
A creditor may, if dissatisfied with the liquidator or trustee’s decision with respect to his/her proof, make application to the court for the decision to be reversed or varied [note 3]. Any application under these rules must be made within 21 days of the creditor receiving the liquidator or trustee’s written statement of his reasons for rejecting the proof.
Any other creditor if dissatisfied with the liquidator or trustee’s decision admitting or rejecting the whole or any part of a proof, may also apply to the court [note 4]. Any application under these rules must be made within 21 days of the creditor becoming aware of the liquidator or trustee’s decision.
40.163 Inspection of court file
Any person stating in writing to be a creditor of the company or the individual to whom the proceedings relate, may inspect the court file of the proceedings [note 5]. In cases where the petition was presented on or after 6 April 2010 the person may also obtain from the court a copy of any documents on the court file.
The court can direct that certain documents are not to be open to inspection without the permission of the court [note 6]. An application for the direction of the court under this paragraph can be made by the official receiver, the office-holder or any person appearing to the court to have an interest (see also Chapter 47 – Disclosure of Information (including inspection and production of records) paragraphs 47.67 - 47.70).
The court may at any time after the making of a winding -up order make an order, that it thinks just, that the books and records of the company may be inspected by a creditor. [note 7]. Dealing with a creditor’s request to inspect a bankrupt’s or company’s accounting records is covered in Chapter 47 – Disclosure of Information (including inspection and production of records) paragraphs 47.63 - 47.66.
The official receiver is required at least once after the making of a winding-up or bankruptcy order to report to creditors on the proceedings and on the state of the insolvent’s affairs [note 8]. For further details, see Chapter 18, Reports to Creditors (particularly paragraphs 18.2 and 18.7).
40.166 Request for meeting to appoint liquidator or trustee (amended April 2009)
Where the official receiver has not yet summoned, or has decided not to summon a meeting of creditors (and in the case of companies, a separate meeting of contributories) to appoint a liquidator or trustee, any creditor may request the official receiver to hold such a meeting for that purpose. If the request is made with the concurrence of not less than one quarter, in value, of the creditors, it is the duty of the official receiver to call such meetings [note 9]. As the official receiver would not otherwise have called a meeting and thereby incur meeting expenses, the requisitioning creditor must cover the costs and will be responsible for the cost of the publication in the Gazette of the notice of the meeting, any other advertisement(s) and the cost of hiring a room if necessary. See Chapter 16 - Meetings, Part 2, for further details of requisitioned meetings.
40.167 Liquidation committee/ Creditors’ committee
At a meeting of creditors summoned for the purpose of choosing a person to be liquidator or trustee, a committee may be established, by the creditors, to exercise the functions conferred on it by the Act [note 10]. These functions are to ensure that the actions of the liquidator or trustee are not beyond his/her powers and that he/she carries out his/her functions in accordance with the provisions of the Act [note 11].
The committee consists of at least three, and not more than five, creditors or their appointed representatives [note 12].In a winding up the committee is called the ‘liquidation committee’ [note 13] and, in bankruptcy, the ‘creditors’ committee’ [note 14].
See Chapter 16, Part 8 for further information on committees.
40.168 Request for general meetings
A general meeting to ascertain the wishes of the creditors in relation to any matter regarding the liquidation or bankruptcy can be requested, in writing, by creditors for not less than one-tenth in value of the company’s or the bankrupt’s total debts [note 15] (see also Chapter 16, Part 2).
40.169 Request for Public Examination
A public examination may be requested by creditors whose claims comprise at least half the total value of known claims (which includes the claims of secured creditors without regard to the value of their security). Companies [note 16] Partnerships [note 17] and bankruptcy [note 18]. The person(s) making the request must provide a statement of the reasons as to why the public examination should be held and, in a winding up, must additionally specify the name of the proposed examinee and his/her relationship with the company [note 19].
Reference should be made to Chapter 14 - Public Examinations, Part 3, which provides full details of how the official receiver should deal with requests for a public examination.
40.170 Objection to release of Official Receiver
The official receiver must, before giving notice to the Secretary of State that the administration of the estate is for practical purposes complete, send out notices of his intention to do so to all creditors of which he/she is aware [note 20].The official receiver may apply to the court to be relieved of this obligation or authorise him/her to carry out the duty in a way other than required [note 21]. In considering the application, the court shall have regard to the cost of carrying out the duty, to the amount of the assets available and to the extent of the interest of creditors or contributories, or any particular class of them.
The notice must be accompanied by a summary of the official receiver’s receipts and payments as liquidator or trustee [note 22]. This notice also advises creditors that any objection they may have to the granting of the official receiver’s release should be notified to the Secretary of State at Cannon House in Birmingham within 21 days of the date of the notice. If no objection is received within that 21-day period, OR Banking Section will grant the official receiver’s release on behalf of the Secretary of State.
If an objection is received, the official receiver’s application is immediately halted and the creditor is advised that the official receiver’s release as liquidator or trustee will be withheld until further notice whilst enquiries are made. The objection, and any comments made by the official receiver, are passed for Technical Section to adjudicate on behalf of the Secretary of State.
Generally speaking, a release can be withheld if it can be shown that the official receiver has failed to realise any of the assets or has misapplied them, but otherwise the official receiver would appear to be entitled to his/her release.
If a creditor raises an issue where the official receiver has not taken action, but where it is reasonable to expect him/her to do so, Technical Section will ask the official receiver to take that action. For example, if a creditor asks about an asset that was previously unknown to the official receiver, or if the creditor says that the debtor has a new, better paid job, further enquiries should be made with a view to obtaining or increasing an income payments agreement or income payments order.
Before release is granted Technical Section seek to satisfy creditors that their concerns have been properly looked into and that any action the official receiver could reasonably be expected to take has been taken.
Further information on the release of the liquidator or trustee is provided in Chapter 37- Release of official receiver as liquidator or trustee.
CREDITOR’S RIGHT TO MAKE A COMPLAINT
40.171 Application to court re:acts of the liquidator
A creditor aggrieved by an act or decision of the liquidator may apply to the court; and the court may confirm, reverse or modify the act or decision complained of, and make such order in the case as it thinks just [note 23]. In practice, the court will only interfere with a decision of a liquidator if it was taken in bad faith or if it was so perverse as to demonstrate that no liquidator properly advised could have taken it [note 24].
40.172 Application to court re: acts of the trustee
A creditor dissatisfied by any act, omission or decision of a trustee of the bankrupt's estate may apply to the court; and on such an application the court may confirm, reverse or modify any act or decision of the trustee, may give him/her directions or may make such other order as it thinks just [note 25]. In practice, such applications rarely succeed, where used to challenge the exercise of the public law functions of the official receiver [note 26] but where the action of the trustee was unreasonable or indicative of bad faith the court would grant relief to the creditor under section 303 [note 27].
40.173 Complaints against the Official Receiver
If a creditor has a complaint in relation to standards of service and administrative actions of the official receiver or his staff, this should be resolved locally by the officer dealing with the case or their immediate manager. If this cannot be done, the complaint should go to the local official receiver and, failing that, to the regional director responsible for the official receiver. If the complainant is still not satisfied the complaint can be referred to the Adjudicator, an unbiased referee who makes independent recommendations. The complainant may also, at any time, ask a Member of Parliament to refer the complaint to the Ombudsman.
The Service’s full complaints procedure, including contact details for the Adjudicator and the Ombudsman, is available on The Service’s website. All complainants should be given a copy of the leaflet Complaints Procedure: How to complain.
Complaints are monitored by the Insolvency Service’s Secretariat and reported to its Agency Steering Board, which reviews the operation of the complaints procedure to ensure they are being properly followed.
40.174 Contacting the Insolvency Service
The Insolvency Service is committed to giving the best possible service and information, to creditors and other users, and to this end has set up the following information and contact points.
Website
The Insolvency Service has a website at www.insolvency.gov.uk. This is updated regularly and has useful links to related sites.
Insolvency Enquiry Line
As a result of The Service's continual drive to provide improved services to customers, a central public enquiry line was introduced in August 1998. Its introduction followed a review of The Service's procedures for dealing with calls of a general nature and recognition that members of the public and businesses often welcome such information being provided at a single point.
The aim of the enquiry line is to provide initial information on insolvency legislation and procedures, including details of the work of the official receiver. The few queries that cannot be answered immediately are either researched, with a substantive reply being provided within 24 hours, or passed on to a member of staff with the relevant knowledge.
The enquiry line is currently available between 9.00am and 5.00pm Monday to Friday on 0845 602 9848.
Hotline
The Enforcement Hotline was set up in January 1998, as a result of a ministerial initiative to catch defiant directors and undischarged bankrupts who blatantly disregard disqualification orders made against them.
The Hotline is open 24 hours a day and enables people who have information about defiant directors and bankrupts to pass it on. The intention is to enforce the disqualification and prevent the public from being exposed to more instances of corporate misconduct.
The Hotline number is 0845 601 3546.
Information leaflets
There is a range of leaflets covering commonly asked question about insolvency proceedings. Official Receiver’s offices should have stocks of these leaflets or they can be obtained from our website at www.insolvency.gov.uk, or:-
BIS Publications orderline
Telephone: 0845 015 0010
Fax: 0845 015 0020
Minicom: 0845 015 0030
email publications@BIS.gsi.gov.uk
Or order online at the BIS publications website: http://bis.ecgroup.net/Search.htmx
40.175 Individual Insolvency Register
The Individual Insolvency Register is an amalgamation of the statutory registers of bankruptcy orders, bankruptcy restriction orders/undertakings and individual voluntary arrangements in England and Wales [note 28]. This facility can be used to check whether a person is subject to formal insolvency proceedings. It is maintained by The Insolvency Service and is open to the public. Searches can be made on line at www.insolvency.gov.uk or in person at an Official Receiver’s office. There is no charge for this service.
[Back to Part 10 - Interest]