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The word assignment (or ‘assign’) is normally used in the context of a lease; it is one of the options an officeholder has when considering the actions to be taken with what is probably the greatest asset in the insolvent estate.
The law permits the expense of the lease/contract to be assigned to another person. This is usually an interested party, such as the directors of the insolvent company who are seeking a ‘pre-packaged Administration’ (pre-pack), or other rescue of the company. This has the effect of (at least initially) discharging the burden of the company from paying rent and service charges, etc.
[See ‘Pre-Packaged Administration’ and ‘Pre-Pack’.]
An associate is defined in section 435 Insolvency Act 1986 as a person connected to a director of a company by law or blood, an employee or a company controlled by a director (this is, over which the director has more than 50 per cent of voting shares).
Examples of an ‘associate’ are a mother-in-law, a spouse, a niece, brother, civil partner, grandfather and sister-in-law. A cousin is specifically excluded from the definition.
An associate will not be a fiancée, a cohabitant and a very good friend (as there is no blood or formal legal bond with them).
[See ‘Insolvency Act’, ‘Connected Person’ and ‘Director’.]
An authorised body is also known as the ‘Recognised Professional Body’. This will be the Insolvency Practitioners Association (IPA), the Institute of Chartered Accountants in England and Wales (ICAEW), Institute of Chartered Accountants of Scotland (ICAS), or the Institute of Chartered Accountants of Ireland (ICAI).
[See ‘Recognised Professional Body’, ‘Insolvency Practitioners Association’, ‘IPA’, ‘Institute of Chartered Accountants of England and Wales’ and ‘ICAEW’.]
