Insolvency Practitioners and The Contractor

May 2005

31.1.36 Appointment of an insolvency practitioner (amended November 2007)

Where the book debts have a realisable value, the official receiver should not seek the appointment of an insolvency practitioner liquidator or trustee unless requested to do so by creditors. In such circumstances these cases should be dealt with by an LTADT under the book debts contractor arrangement (see Part 2 of this Chapter).

If there are other assets of a complex nature in the estate, the official receiver may seek the appointment of an insolvency practitioner to act as liquidator or trustee of the insolvent estate and should arrange the handover of the estate as soon as possible (see paragraph 17.3 of Chapter 17 – Appointment of Liquidators and Trustees  - for guidance on circumstances where the appointment of a liquidator or trustee other than the official receiver may be appropriate).

On the appointment of an insolvency practitioner liquidator or trustee the contractor should be informed of that appointment [Note 1]On the handover of the estate the insolvency practitioner should be informed of the instructions given to the contractor in the record book [Note 2]. See paragraph 17.75 for further details of items to be handed over.

Any information the official receiver receives in respect of the book debts after the date of the handover should be forwarded to the insolvency practitioner to deal with.

 

31.1.37 Contractor's report and account

On receipt of notification of the insolvency practitioner's appointment [Note 1] the contractor (see Part 2 of this chapter) will account for any monies in their hands direct to the insolvency practitioner and forward a copy of the account to the official receiver. This account will be made up to the date of the handover of the estate to the insolvency practitioner.

The contractor will then seek to renegotiate their employment with the insolvency practitioner. The insolvency practitioner is under no obligation to retain the contractor once he/she has been appointed liquidator of trustee.

 

[Back to Part 3 - Loans to connected parties] [On to Part 5 - Factoring agreements, sale and assignment of book debts and special managers]