SIP 6 - IP assisting with convening of a DP should take reasonable steps to do what?
- covener is fully aware of duties and responsibilities 2. instructions to IP are adequately recorded 3. covener/chari is informed that it may be appropriate to obtain independent assistance with determining authenticity or entitled to participate in DP if these are called into question
SIP 9 define three types of fund
Estate money - derived from realisation of an asset, income or trading receip of insolvent estate. Held for prevailing statutory purpose. of the insolvency. OH responsibel for all estate money and deductions Client money - money belonging to third party subject to client money rules of IP’s RPB Money belonging to OH or their firm
SIP 11 - criteria for fund holding estate money
- all funds to credit of estate held as estate money and readily identifiable to that estate. 2. account provider has no right of combination with other accounts or right fo set off 3. interst on estate money credited to the estate 4. Accoutn provider records must make clear that the estate funds do not belong to OH or their firm
SIP 11 safeguards and financial controls
a.ensuring transactional processing is conducted in a timely manner; b.seeking to ensure that solicitors and agents holding estate money account for those funds in a timely manner; c.allowing only appropriate persons within the entity to conduct transactions; d.adequate supervision of personnel with access to funds; e.limiting the size of transactions that can be processed by different grades of staff; f.implementing secure and robust authorisation procedures within the entity; g.regular reconciliation of estate and client accounts; h.periodic risk assessment of transactional processes within the entity; i.requiring joint signatories or joint authentication
SIP 9 - disclosure obligation of OH
a) payments, remuneration and expenses arising from an insolvency appointment to theoffice holder or his or her associates; b) any business or personal relationships with parties responsible for approving his or herremuneration or who provide services to the office holder in respect of the insolvencyappointment where the relationship could give rise to a conflict of interest
SIP 9 - categories for narrative explanation and fee estiamtes
a) administration (including statutory reporting) b) realisation of assets c) creditors (claims and distribution) d) investigations e) trading (where applicable) f)case specific matters (where applicable).
SIP 16 - Marketing essentials
Broadcast – the business should be marketed as widely as possible proportionate to thenature and size of the business – the purpose of the marketing is to make the business’s availability known to the widest group of potential purchasers in the time available, usingwhatever media or other sources are likely to achieve this outcome. Justify the marketing strategy – the statement to creditors should not simply be a list of whatmarketing has been undertaken. It should explain the reasons underpinning the marketing andmedia strategy used. Independence – where the business has been marketed by the company prior to theinsolvency practitioner being instructed, this should not be used as a justification in itself toavoid further marketing. The administrator should be satisfied as to the adequacy andindependence of the marketing undertaken. Publicise rather than simply publish – marketing should have been undertaken for anappropriate length of time to satisfy the administrator that the best available outcome forcreditors as a whole in all the circumstances has been achieved. Creditors should be informedof the reason for the length of time settled upon. Connectivity – include online communication alongside other media by default. The internetoffers one of the widest populations of any medium. If the business is not marketed via theinternet, this should be justified. Comply or explain – particularly with sales to connected parties where the level of interest isat its highest, the administrator needs to explain how the marketing strategy has achieved thebest available outcome for creditors as a whole in all the circumstances.
SIP 16 disclosures - pre-appointment matters
The extent of the administrator’s (and that of their firm, and/or any associates) involvement prior to appointment. The alternative options considered, both prior to and within formal insolvency by the insolvency practitioner and the company, and on appointment the administrator with an explanation of the possible outcomes. Whether efforts were made to consult with major or representative creditors and the upshot of any consultations. If no consultation took place, the administrator should explain the reasons. Why it was not appropriate to trade the business and offer it for sale as a going concern during the administration. Details of requests made to potential funders to fund working capital requirements. If no such requests were made, explain why. Details of registered charges with dates of creation. If the business or business assets have been acquired from an insolvency process within the previous 24 months, or longer if the administrator deems that relevant to creditors’ understanding, the administrator should disclose both the details of that transaction and whether the administrator, administrator’s firm or associates were involved
SIP 16 disclosure - transaction
The date of the transaction. Purchaser and related parties The identity of the purchaser. Any connection between the purchaser and the directors, shareholders or secured creditors ofthe company or their associates. The names of any directors, or former directors (or their associates), of the company who areinvolved in the management, financing, or ownership of the purchasing entity, or of any otherentity into which any of the assets are transferred. In transactions impacting on more than one related company (e.g. a group transaction) theadministrator should ensure that the disclosure is sufficient to enable a transparent explanation(for instance, allocation of consideration paid). Whether any directors had given guarantees for amounts due from the company to a priorfinancier and whether that financier is financing the new business. Details of the assets involved and the nature of the transaction.Sale consideration The consideration for the transaction, terms of payment and any condition of the contract thatcould materially affect the consideration. The consideration disclosed under broad asset valuation categories and split between fixedand floating charge realisations (where applicable) and the method by which this allocation ofconsideration was applied. Any options, buy-back agreements, deferred consideration or other conditions attached to thetransaction.•Details of any security taken by the administrator in respect of any deferred consideration.Where no such security has been taken, the administrator’s reasons for this and the basis forthe decision that none was required. If the sale is part of a wider transaction, a description of the other aspects of the transaction
SIP 16 disclosure if connected party transaction
- Pre-pack pool approached or explain why not - viability statement from connected party
SIP 7 - disclosure in receipts and payments account or by way of note
- Office holder’s remuneration, showing the amounts paid on each basis;
- Amounts paid to the office holder out of the estate in respect of pre-appointment costs;
- Sums paid to the office holder in respect of the supervision of trading;
- All other amounts required to be approved in the same manner as remuneration;
- Amounts paid to sub-contractors for work that would otherwise have to be carried out bythe office holders or their staff;
- Any remuneration or disbursements paid to the office holder other than out of the estate,giving the amounts paid, the name of payee, their relationship to the insolvent estate andthe nature of the payment.
SIP 7 foreign currency receipts and payment account
OK to maintain multiple R&P for different currencies but:
- show sterling equivalent
- explain why currencies other than sterling held
- explain impact of currency holdings on estate
Basis of remuneration
- percentage of value:
- administrator dealt with
- reaslied or distributed or both
- time properly given by OH and their staff attending to the insolvency
- set amount
Combination of the above for different aspects
Matters to be regarded for determining remuneration
- complexity (or otherwise) of the matter
- exceptional responsibility falling on the OH
- effectiveness with which OH appears to be carrying out their duties
- value and nature of the property
