NI: Changes to NI insolvency legislation
Director Jeanette Donohoe and solicitor Maria McNally of Cleaver Fulton Rankin Solicitors in Belfast explain the impact of the Insolvency (Amendment) Act (Northern Ireland) 2016.
On 1st April 2016, a significant number of changes came in to effect arising from the commencement of the Insolvency (Amendment) Act (Northern Ireland) 2016 (“the Act”). Many of these changes bring Northern Ireland in line with England, Wales and Scotland.
We have summarised the most notable changes that have been made to the Insolvency (Northern Ireland) Order 1989 (“the Order”):
(i) The Act amends Article 230A so that Nominees are no longer required to submit a Report on an Individual Voluntary Arrangement to the High Court.
(ii) Amends Schedule 2 and 3 to extend powers exercisable by a Liquidator and Trustee to compromise debts, claims and liabilities without requiring sanction from the Department of Enterprise, Trade and Investment (DETI), the Court or Creditors.
(iii) Amends Article 280 (after-acquired property). If a Bank enters in to a transaction with a Bankrupt prior to being notified of the bankruptcy, the Trustee is not entitled to seek any remedy against the Bank. Trustees must therefore ensure that they notify Banks of the Debtor’s bankruptcy as early as possible to avoid this risk.
(iv) Early discharge of a Bankrupt from bankruptcy prior to one year under Article 253(2) of the Order has been repealed. The Official Receiver can no longer file a notice prior to the expiry of one year with the High Court stating that investigation of the conduct and affairs of the Bankrupt is unnecessary or concluded. The period of bankruptcy must be at least one year.
(v) Article 2(3) has been substituted to provide guidance in determining if any liability in tort is a bankruptcy debt or provable in the winding up of a company or where a company is in administration.
(vi) The Act introduces a regulatory framework to ensure Insolvency Practitioner’s (IP) act with transparency and integrity with consideration to anyone affected by their acts and omissions. If an IP is found not to act within this framework there are a number of sanctions that can be enforced by DETI to include reprimand, financial penalties and applying to the court to directly sanction an IP if it is in the public interest to do so.
Please note; the content of this article is for information purposes only and further advice should be sought from a professional legal advisor before any action is taken.
Please contact Cleaver Fulton Rankin on 028 9024 3141 or alternatively visit www.cfrlaw.co.uk