The Compendium

A Comprehensive Companion for All in the Insolvency and Restructuring Profession

In such a situation the personal representative is not required to be a quali.ed Insolvency Practitioner, provided the matter is not dealt with in Bankruptcy.

The Insolvency Administration process is started by petition. The personal representative of the late Bankrupt will issue this (it is effectively a debtor's application). For this to happen someone must have sought probate or letters of administration, and many estates are simply not that organised. So it is more likely to be a creditor who commences the action.

A Trustee in Bankruptcy will be appointed if an Insolvency Administration Order is made and the Trustee should make it clear on all correspondence to creditors and others that the estate is being dealt with under an IAO, rather than a Bankruptcy Order, and any claims should be submitted as on the date of death.

[See 'Bankrupt', 'Personal Representative', 'Trustee in Bankruptcy' and 'Bankruptcy Order'.]

Insolvency Event

An 'insolvency event' is a Liquidation or Administration, which gives rise to the duty to notify certain parties as to the state of the company.

The Pension Protection Fund has issued a list of what is regarded as an 'insolvency event'. It is:

  1. The Nominee, who is not the Liquidator or Administrator, submits a report to the court stating her opinion that meetings of the company and its creditors should be summoned to consider the proposal, or, if they are an Administrator or Liquidator) summons a meeting of the company and its creditors to consider the proposal.
  2. The directors of the company file (or in Scotland, lodge) documents and statements with the court to begin a Moratorium where the directors propose a Voluntary Arrangement.
  3. An Administrative Receiver is appointed in relation to the company.
  4. The company enters Administration.
  5. A resolution is passed for a Creditors' Voluntary Liquidation or an Administrator issues a notice which converts the Administration to Creditors' Voluntary Liquidation.
  6. A creditors decision process is held which converts a Members' Voluntary Liquidation into a Creditors' Voluntary Liquidation.
  7. A winding-up Order is made, or an Administration is converted to windingup by court order.