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A negotiable instrument is a signed document that promises a sum of payment to a specified person, or the assignee (someone who the original person has assigned their rights to).
In other words, it is a formalized type of IOU: a transferable, signed document that promises to pay the bearer a sum of money at a future date or on-demand.
A curious example of this is a bank note. In the UK the Bank of England promises to pay the bearer of a £5 note £5 worth of gold … [See ‘Promissory Note’, ‘Assign’ and ‘Bill of Exchange’.]
A Nominee is an Insolvency Practitioner who plays a key role in a Voluntary Arrangement (both Company and Individual – CVA and IVA).
They will scrutinise the Arrangement prepared by the directors (CVA) or debtor (IVA) and ensure that it is legal, reasonable and likely to be approved by the creditors. In reality, the Nominee will be closely involved in the initial discussions and drafting of the proposal, as they have great experience in the field and will know what works and what doesn’t.
As well as ‘reporting’ to the court and to the creditors, she gives her opinion that the proposed Voluntary Arrangement has a reasonable chance of being approved and implemented. The Nominee also has to investigate the forecast cash flow and monitor actual achievement of the company in the period leading up to its implementation. The Insolvency Rules state that a Nominee must check that:
