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In considering whether objectivity or integrity may be threatened, an Insolvency Practitioner should identify and evaluate any professional or personal relationship which may affect compliance with the fundamental principles. The appropriate response to the threats arising from any such relationships should then be considered, together with the introduction of any possible safeguards.
Generally, it will be inappropriate for an Insolvency Practitioner to accept an insolvency appointment where a threat to the fundamental principles exists or may reasonably be expected might arise during the course of the insolvency appointment.
The Code of Ethics is summarised in Statement of Insolvency Practice 1 (SIP 1).
[See ‘Insolvency Practitioner’, ‘Statement of Insolvency Practice’, ‘SIP’ and ‘Statement of Insolvency Practice’.]
When assessing whether, in a Compulsory Liquidation, to use the date of presentation of petition or that of the making of the winding-up Order by the court as a benchmark, a Liquidator will need to look at the wording used in the Insolvency Act 1986 and the Insolvency Rules 2016.
If the wording of the Rules state that the assessment should be made at the time the company “went into Liquidation” the relevant date is that of the winding-up Order.
If the words within the statute say it is the “date of commencement of Liquidation”, this means the date to use is that of presentation of the petition, once the Order has been made. The Liquidator must use the date of the petition in these circumstances, as the commencement of (Compulsory) Liquidation, which is backdated once the Order has been made.
It will always be the date of the Special Resolution in a Creditors’ Voluntary Liquidation (CVL).
[See ‘Liquidation’, ‘Liquidator’, ‘Compulsory Liquidation’, ‘Creditors’ Voluntary Liquidation’, ‘CVL’, ‘Insolvency Rules’, ‘Creditors’ Voluntary Liquidation’, ‘Insolvency Act’ and ‘Went Into Liquidation’.]
