Challenges to an insolvency office-holder

Copyright © 2024 LexisNexis

In exercising their role, duties, functions and powers, insolvency office-holders are under a duty to take reasonable care in their management of the estate's affairs, not to make a secret profit and not to act when they have a conflict of interest.

An office-holder must act in the best interests of creditors as a whole, subject to some limited exceptions, and as such must exercise a high standard of care and skill. They must always act impartially and independently.

With the exception of voluntary liquidators, office-holders will be acting as officers of the court, whether appointed in or out of court, and therefore must comply with the duty applicable to officers of the court set out in Ex Parte James (1874) 9 Ch Apt 609 (not reported by LexisNexis®) to act honourably and fairly. This will mean that a court may act accordingly if an officer of the court has taken unfair advantage and obtained unjust enrichment for the estate (or themselves) as a result of their position. The court, using its discretion, may order compensation in these circumstances.

For further reading on the roles, powers

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

Existing user? Sign-in TAKE A FREE TRIAL
Powered by Lexis+®
Latest Restructuring & Insolvency News

Insolvency Service forces fraudulent online pet supply company to cease all operations

The Insolvency Services has reported the shut down of Funnyfuzzy UK Co.Ltd for providing its customers with inferior and defective pet supplies. Following the Insolvency Service's investigation, it was revealed that the company had been misleading its customers by providing them with second-rate merchandise; failing to deliver ordered items; and refusing to issue refunds while lodging fabricated dormant accounts and evading VAT registration.

Directors’ liability for company’s debts under section 217 of the Insolvency Act 1986 and rule 22.17 of the Insolvency Rules 2016 (Maxima v Fealy and Barrett)

Restructuring & Insolvency analysis: The High Court has dismissed a claim brought by an assignee of creditors' debts against individuals who were directors of a company in liquidation and a second company which was operating under a prohibited name pursuant to section 216 of the Insolvency Act 1986 (IA 1986). The defendants successfully argued that the second company fell within ‘The Third Excepted Case’ under the Insolvency Rules 2016 (IR 2016), SI 2016/1024, r 22.7, and that the second company had been known by its name for the entire 12 months prior to the first company's liquidation and had not at any time in those 12 months been dormant. The case is thought to be the only reported case on the true meaning and effect of the second of the two elements of The Third Excepted Case and demonstrates that the principles of corporate accounting law on non-dormancy cannot be translated from an accounting to an insolvency scenario. The concept of phoenix syndrome and the principle against doubtful penalisation were also considered. Written by Laura Newbery, legal director at Addleshaw Goddard LLP.

Top UK court rejects Bedzhamov Russian bankruptcy order

Law360, London: The UK Supreme Court refused on 20 November 2024 to recognise a Russian bankruptcy order against two properties owned by banker Georgy Ivanovich Bedzhamov in Britain, confirming a legal principle that foreign courts do not have jurisdiction over English land.

Restructuring & Insolvency weekly highlights—21 November 2024

This week's edition of Restructuring & Insolvency weekly highlights includes: confirmation by the Supreme Court of the immovables rule to English property (Kireeva v Bedzhamov), the publication by the Insolvency Service of its monthly insolvency statistics for October 2024, an analysis on the interface between property law and financial remedy in the context of bankruptcy (DDR v BDR), plus a round-up of other news and cases for restructuring and insolvency professionals.

View Restructuring & Insolvency by content type :  
News
Practice notes
Precedents
Q&As

Popular documents

When can an office-holder seek directions from the court in insolvency proceedings?

When can an office-holder seek directions from the court in insolvency proceedings?The power to seek directions from the courtOffice-holders in insolvency proceedings have statutory powers to seek directions from the court in relation to the performance of their duties. These powers derive

A company previously dissolved after voluntary liquidation has be restored by court order. What steps

A company previously dissolved after voluntary liquidation has be restored by court order. What steps should the liquidator take upon re-appointment? Would they need to invite creditors to claim, produce back dated annual reports for the period of dissolution, or seek a new indemnity from the

What are the grounds and procedure for removing a trustee in bankruptcy (trustee) from office? And if a

What are the grounds and procedure for removing a trustee in bankruptcy (trustee) from office? And if a trustee is removed from office, where do their fees and expenses stand in the order of priority?Removal of a trusteeThe trustee of a bankrupt's estate may be removed from office by an order of the

Block transfer orders—the law and practice

Block transfer orders—the law and practicePurposeThere are three circumstances which give rise to the need for a block transfer of office-holder appointments:•where an office-holder dies•upon the retirement of an office-holder from practice•where an office-holder is otherwise unable or unwilling to
When can an office-holder seek directions from the court in insolvency proceedings?

When can an office-holder seek directions from the court in insolvency proceedings?

When can an office-holder seek directions from the court in insolvency proceedings?The power to seek directions from the courtOffice-holders in insolvency proceedings have statutory powers to seek directions from the court in relation to the performance of their duties. These powers derive

A company previously dissolved after voluntary liquidation has be restored by court order. What steps

A company previously dissolved after voluntary liquidation has be restored by court order. What steps

A company previously dissolved after voluntary liquidation has be restored by court order. What steps should the liquidator take upon re-appointment? Would they need to invite creditors to claim, produce back dated annual reports for the period of dissolution, or seek a new indemnity from the

What are the grounds and procedure for removing a trustee in bankruptcy (trustee) from office? And if a

What are the grounds and procedure for removing a trustee in bankruptcy (trustee) from office? And if a

What are the grounds and procedure for removing a trustee in bankruptcy (trustee) from office? And if a trustee is removed from office, where do their fees and expenses stand in the order of priority?Removal of a trusteeThe trustee of a bankrupt's estate may be removed from office by an order of the

Block transfer orders—the law and practice

Block transfer orders—the law and practice

Block transfer orders—the law and practicePurposeThere are three circumstances which give rise to the need for a block transfer of office-holder appointments:•where an office-holder dies•upon the retirement of an office-holder from practice•where an office-holder is otherwise unable or unwilling to