New Case - Petition (ISCIS)

New Case - Petition (ISCIS)              

August 2010

Introduction     

1. What is a petition?

A petition must be presented to the court before a winding-up order or bankruptcy order is made. It is a formal written request for a company or partnership to be wound up compulsorily, or for an individual to be made bankrupt.

2. Deceased Insolvents

Where a person dies after a bankruptcy petition is presented against him/her the matter continues as a normal bankruptcy but with some amendments.

Where a person dies before a bankruptcy petition is presented, a petition for an insolvency administration order can be presented under the Administration of Insolvent Estates of Deceased Persons Order 1986.

For further information see Case Help Manual (CHM) Part : Deceased Insolvents

3. Who may present a petition?

In most cases a petition will be presented by one of the following :

a.  any creditor who has an unsecured liability of at least £750

b.  the directors or shareholders of a company

c.  one or more members of a partnership

d.  the debtor him/herself

e.  the supervisor of a voluntary arrangement or an administrative receiver                             

 f.  the Secretary of State in a public interest case. 

4. Why is a petition presented?

The most common reason for presenting a petition is that the company, partnership or debtor cannot pay their debts. This is proved to the satisfaction of the court by failure to pay a statutory demand or judgment debt.

Another reason which is sometimes used in company cases is where the court thinks that it is ‘just and equitable’ to wind up the company. This procedure is appropriate for situations in which it is no longer practical for a small company to exist, i.e. where the directors can no longer agree on the management of a company, or where a company was formed for a specific purpose which it has now fulfilled, or where it is no longer able to do so.

Shareholders may terminate the existence of their company on the grounds that it is ‘just and equitable’ for the company to be wound up.

5. What information is required in the petition?

(amended March 2011)

Company and bankruptcy petitions are prepared on statutory forms, a full list of which is contained in Schedule 4 of The Insolvency Rules 1986.

Petitions to be presented in partnership cases and for their members are contained in Schedule 9 of The Insolvent Partnerships Order 1994.

All of these forms can be obtained by accessing The Service’s website at www.insolvencydirect.bis.gov.uk.

Please note that Her Majesty’s Court Service (HMCS) will no longer provide the bankruptcy packs which included copies of the forms (Form 6-27 Debtors Bankruptcy Petition or Form 6.28 Statement of Affairs) that a debtor requires to petition for their own bankruptcy. If it is clear that the debtor is unable to access and print the forms from the internet, they are in the first instance to be directed to the Insolvency Enquiry Line (IEL). The IEL can be contacted by telephone on 0845 602 9848 or by email at insolvency.enquiryline@insolvency.gsi.gov.uk

In a winding up, the petition must show the full and correct name of the company, its registered number, the registered office address and the grounds for the winding up.

Each petition in a partnership will also contain particulars of other petitions being presented which are connected to the partnership, e.g. petitions against its members. For more information see CHM part : Partnerships.

With a bankruptcy petition, as much detail as possible is included to enable the debtor to be identified, e.g. the debtor’s full name, address and occupation, together with any trading details or aliases if appropriate.

6. How are the proceedings identified ?

Each petition is headed by a number given to it by the court which is a unique reference, e.g. Birmingham County Court No. 132 of 2010. The only time that this number will change is if the proceedings are later transferred to a different court.

7. What is a deposit?

On presenting a petition the petitioner must pay a deposit to cover the initial costs and the court will then fix the date for hearing the petition. The amount of the deposit is set by The Insolvency Proceedings (Fees) (Amendment) Order 2007and can be increased or decreased by Parliament. 

All deposits on petitions are forwarded directly from the courts to ISCIS Financials ( formerly Estate Accounts Services (EAS)) Petitions and Deposits team (P&D) in Birmingham and do not involve local official receivers’ offices.

8. What are the possible results at the hearing ?

There are several decisions the court may make upon hearing the petition. It may order that the petition be dismissed if, e.g. the debt has been paid, or the petition may be withdrawn by the petitioner after having sought and been given leave of the court to do so. Further, the hearing may be adjourned if, for example, there has been a problem over service.

Before making a winding-up order or bankruptcy order the court must be satisfied that the debt is still owed and there is no reasonable prospect of the debt being paid by the company, partnership or debtor.

9. What happens in High Court and District Registry petition cases ?

Petitions and Transfers Section (P&T) receive notification of orders made in the District Registries of the High Court, and all company and bankruptcy orders made in the High Court. P&T will enter case details on to ISCIS via a link with Bacchus(the court database) and will transfer and allocate all High Court and District Registry orders to the appropriate local court and official receiver offices. A workflow task is automatically generated on ISCIS when the case is re-assigned to allow the receiving office to allocate the case.

In addition they carry out associated work including:

  • monitoring all petitions and deposits for company and bankruptcy cases presented in the High Court and all company cases presented in District Registries
  • carrying out the administration for the making and transfer of the orders, made on the above petitions.
  • distributing sealed orders to relevant Official Receiver’s offices

10. What happens in a county court creditor’s petition case ?

Once a deposit for a creditor’s petition is received, the court send a copy of the petition with the deposit to P&D, following which some courts also contact the local official receiver’s office and provide brief details of the petition. P&D are responsible for recording the new case petition details on ISCIS and forwarding the petition paperwork to the local official receiver’s office, where it should be filed, according to local office practices.

After the hearing, the court notifies the local official receiver’s office of the result of the hearing, to advise either that the petition has been dismissed, withdrawn, adjourned or an insolvency order made. The case will already exist in ISCIS as a pending petition and the appropriate result can then be recorded on the relevant screen within ISCIS. This will be under the tab for Case or Hearings.

11. What happens in a debtor’s petition case ?

(amended March 2011)

Debtor’s petitions are usually heard immediately. When this is not possible a date will be fixed for a hearing as soon as possible. The only ground for presenting a debtor’s petition is inability to pay debts and a statement to this effect is included with the petition, together with a statement of affairs.

At the hearing of a debtor’s petition the court will usually make a bankruptcy order. The courts will notify the official receiver of new orders via secure email including the title of the proceedings, full description, the name of any trustee and contact details for the debtor.  An electronic copy of the bankruptcy order will be enclosed within the email. The bankrupt will receive a sealed copy of the order and the court will also send a sealed copy of the order to the official receiver with the petition and statement of affairs on the day of the order.

The case can then be created in ISCIS. (See Case Creation Protocol).

Following on from a review by HMCS there is no longer a facility to allow debtors to use the court telephones to contact the official receiver.

For further information see CHM part :Initial Contact in Debtor’s Petition cases.

Notes:

a. The petition details must be recorded on ISCIS before the deposit can be dealt with by ISCIS Financials.

b. When creating a case on ISCIS you are required to use the search party facility, which establishes whether the party already exists. In essence, this replaces the Central Index search. (See Parties Protocol).

c.  Be aware that there is an interface between ISCIS and the Individual Insolvency Register (IIR), with an entry being generated on the e-IIR as soon as a bankruptcy case is created.

Where can I find out more?

Insolvency Act 1986

Part IV Chapter V1 Sections 117, 122 to 130

Part IX Chapter 1 Sections 264 to  274, 276 to 277              

Insolvency Rules 1986

Rule 4.2 to 4.3

Rule 6. to 6.46 6.38 and 6.40

Rule 6.7 and 6.9 Court in which petition to be filed

The Insolvency Amendment Rules 2010

Rule 6.40A Court in which petition to be presented

Rule 6.9A Court in which petition to be presented

Technical Manual

Chapter 4 – Initial Procedure When Bankruptcy Order Made

Chapter 12 – Statement of Affairs

Chapter 45 – Proceedings up to Order

Chapter 53 – Partnerships

Chapter 54 – Deceased Insolvents

Case Help Manual

Consolidations

Deceased Insolvents

Initial Contact in debtor’s petition cases 

Partnerships                                                

ISCIS Protocols

Case Creation

Communication with Petitions and Transfers

Hearings

Linked Cases

Parties

Partnerships

OROS Bulletin February 2011

Forms

4.2        Winding-Up Petition  

5           Creditor’s Petition to Wind Up Partnership (Presented in Conjunction With Petitions against Members

6.25      Bankruptcy Order on Creditors Petition

6.7        Creditor’s Bankruptcy Petition on Failure to Comply with a Statutory Demand for a Liquidated sum Payable Immediately

6.9        Creditor’s Bankruptcy Petition Where Execution or Other process on a  Judgment has been Returned in Whole or Part

6.27      Debtors Bankruptcy Petition

6.28      Statement of Affairs (Debtor’s petition)  

6.28      Statement of Affairs (Debtor’s Petition) (Guidance Notes)  

7         Creditor’s Bankruptcy Petition against Individual Member (Presented in conjunction with Petition against Partnership)  

Insolvent Partnerships Order 1994 – Forms

14       Joint bankruptcy petition against individual members

15       Affidavit of individual member(s) as to concurrence of all members in presentation of joint bankruptcy petition against individual members 

16       Bankruptcy orders on joint bankruptcy petition presented by individual Members

17       Statement of affairs of member of partnership

18       Statement of affairs of partnership

 

Click HERE to view the flowchart for New Case Petitions   

 

Procedure

Petitions and deposits

All petition deposits are dealt with by ISCIS Financials Petitions and Deposits (P&D) team in Birmingham directly and no longer involve local official receivers’ offices.

High Court and District Registry Deposits

The following procedure (steps 1- 4) is applicable to both bankruptcy petitions and  winding up petitions presented in the High Court and to winding up petitions presented in its District Registries. High Court and District Registry cases are dealt with initially by an exchange of information between the Petitions & Transfers (P&T) team and the ISCIS Financials Petitions & Deposits (P&D) team in Birmingham.

1 P&T will enter case details onto ISCIS. They will then inform ISCIS Financials that appropriate cases are entered onto ISCIS ready for a deposit to be posted to them. See ISCIS Protocol – Communication with Petitions and Transfers.

In dismissed or withdrawn cases P&T will process the refund of deposits to petitioning creditors’ solicitors and select the outcome on ISCIS.

Where orders are made, P&T will update ISCIS and input the order date, change the assigned office on ISCIS to the local office and send the order to the assigned office.

4 A workflow task is automatically generated on ISCIS when the case is re-assigned so that the receiving office can allocate the case.

County Court Deposits

Before entering a new case

Creditor’s Petitions

5 The court is required to send a copy of the petition with the deposit to ISCIS Financials. Some county courts send a copy of the petition to the local official receiver’s office but there is no requirement for them to do so.

6  P&D will record the petition details and the appropriate ISCIS case type entering the following information, some of which is mandatory :    

a   full name and address of bankrupt or company

b  court and number

petition date

d  type of petition (whether creditors or debtor’s)

e   name of petitioning creditor

f   petitioner type

 the name, address, telephone number and reference of the petitioning creditor’s solicitors. It is important to enter the name of the firm of solicitors acting for the petitioner and not a solicitor’s personal name when recording these details

h  state whether a partnership or not, if so, the details of partners should also be input at this stage. See Partnerships Protocol 

7 When all of the petition paperwork has been forwarded by P&D to the local official receiver’s office it should be filed according to local office practice, e.g. date, court, or alphabetic order.

After the hearing

8 The court will notify the official receiver of the result of the hearing, e.g. adjourned, dismissed, withdrawn or order made.

9 Where the petition is dismissed or withdrawn the local office will enter the result on the Hearings tab on ISCIS and check that the petitioning creditor’s solicitors address is correct on the Case Header screen. The official receiver requests the cashier to return the deposit to the petitioning creditor’s solicitors in the normal manner. (See ISCIS Hearings Protocol).

10  Where the petition is adjourned, enter the adjourned date on the Hearings tab on ISCIS and re-file the petition accordingly.

11  Where a winding-up or bankruptcy order is made the case will already exist as a pending petition. Update ISCIS  and input the order date. A workflow task will be automatically generated for the case to be allocated.

Debtor’s Petition

12  Receive notification from Court via email that a bankruptcy order has been made. Details of orders can be found in the dedicated email address, set up for each office.

14   Create the case on ISCIS (See ISCIS Case Creation Protocol) .To assist P&D in posting the deposit on to ISCIS Financials it is important that, wherever possible, new cases are created in ISCIS on the day that the order is made.

15 If previously bankrupt enter known details via Linked Cases tab (not Linked Parties). (See Linked Cases Protocol).

16  Person responsible will allocate case as appropriate (including AOR/Examiner/Case officer). Workflows will be automatically generated to then process the case.

17  If the debtor is at court initial contact may be established with him/her. For further information see CHM part: Initial Contact in debtor’s petition cases.