1.  Preservation of Company Records for Investigation Purposes 

(First published in Dear IP no. 18, July 1991)

Article Withdrawn July 2012

Practitioners will be aware that Regulation 8 of the Insolvency Regulations 1986 (which had direct application to compulsory liquidations and bankruptcies, and by Regulation 26 also applied to creditors’ voluntary liquidations) has no counterpart in the 1994 Regulations. Regulation 8 required the liquidator or trustee to prepare and keep minutes of the proceedings at any meetings of creditors and contributories, and of the creditors’ committee and the liquidation committee, (including a record of every resolution passed at such meetings), a copy of every resolution passed under Rules 4.167 and 6.162 (resolution by post) together with a note that the concurrence of the relevant committee was obtained, and any other matters necessary to give an accurate record of his administration.

Some practitioners appear to have taken the view that because Regulation 8 was abolished, as a result of the coming into force of the 1994 Regulations, there is no longer a requirement to keep administrative records in relation to each particular insolvency case. The purpose of this article is to draw attention to provisions of the Insolvency Rules 1986 which continue to require the keeping of administrative records.

Although the wording of each applicable rule varies, it is a requirement in all types of insolvency, without exception, that:

1. at a meeting of creditors or contributories "minutes" or a "record" of its proceedings are taken, or a "report" is made;
2. a list of all creditors or contributories attending the meeting is drawn up;
3. at a meeting of a creditors' committee or of a liquidation committee every resolution passed is recorded in writing;
4. a copy of every resolution of a creditors’ committee or liquidation committee obtained by post, together with a note that the committee's concurrence was obtained, forms part of the record of the insolvency.

The chairman of the meeting is responsible for ensuring that the requirements at (1) to (3) above are met. Except for meetings held under section 95 or 98 of the Act, and first meetings of creditors in a bankruptcy, the chairman is the office-holder, or a person nominated by him, who is either authorised to act as an insolvency practitioner, or is an employee of the office-holder or his firm, and experienced in insolvency matters, as required by:

  Retention of Proxies

Rule 8.4 provides that "proxies used for voting at any meeting shall be retained by the chairman of the meeting", unless the chairman is not the responsible practitioner, in which case he shall deliver the proxies forthwith to the practitioner.

Rule 12.5 of the Insolvency Rules 1986, provides that a minute of proceedings at a meeting signed by "a person describing himself as, or appearing to be, chairman of that meeting is admissible in insolvency proceedings without further proof". The minute is prima facie evidence that the meeting was duly convened and held, that any resolutions were duly passed, and that all proceedings at the meeting duly took place.

Practitioners will appreciate the practical necessity, regardless of any legislative requirements, to ensure that all stages in an insolvency are fully documented and recorded, so that actions taken can be explained and justified, and that queries from a party interested in the proceedings, the court, or arising during a monitoring inspection, can be readily answered.

The High Court now destroys bankruptcy files as they become 20 years old, without apparently taking any steps to ascertain from the file whether the trustee has been released, or whether any current action is proceeding. It has been agreed with the Chief Bankruptcy Clerk, however, that the court will retain any file which the Official Receiver specifically requests should not be destroyed.

The High Court is now destroying files relating to bankruptcies ordered in 1972 and 1973, and any practitioners still acting in a matter commencing in those years, who considers that retention of the court file is essential, should provide details to the Assistant Official Receiver, 21 Bloomsbury Street, London, WC1 3SS, who will ensure that the Court is advised.

Regulation 32 of the Insolvency Regulations 1986 provided that the last liquidator of a company which has been dissolved could destroy or dispose of the books, papers and other records of the company, provided that more than one year had passed since the date of dissolution. [This Regulation was restated as Regulation 16(2) in the Insolvency Regulations 1994]

The Service is aware that resolutions are being sought at the final meeting of creditors purporting to authorise the liquidator to dispose of the books and papers just three months after dissolution. Practitioners are reminded that a creditors’ resolution cannot circumvent the Regulations.