Office-holder indemnities and security
Published by a LexisNexis Restructuring & Insolvency expert
Practice notesOffice-holder indemnities and security
Published by a LexisNexis Restructuring & Insolvency expert
Practice notesWhy indemnities and security are required
When an Insolvency practitioner takes office they have a Duty of care to creditors to act bona fide in their best interests.
Depending on the circumstances of the case, an office-holder may find themselves trading a company for a while or completing or taking on contracts and need to protect themselves from personal liability while doing so.
Most office-holders will exclude their own personal liability when they are entering contracts and will ensure they sign any documents as the office-holder, not in their personal capacity. However, they may be unable to fully exclude liability and may need to rely on both statutory indemnities, where available, and additional creditor indemnities.
Indemnities will have differing degrees of importance to office-holders, depending on the office they hold and the steps they are required to take while in office.
Personal liability
The extent of personal liability for an office-holder depends on what office they are holding and to what degree they are personally liable within their role.
In bankruptcy, the bankrupt’s estate vests
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