An Insolvency Practitioner (IP) in the UK must have passed the insolvency examinations in the UK, have experience of insolvency case-work and have satisfied an authorising body that they are a fit and proper person to carry out the role. IPs are registered with the Department for Business, Innovation and Skills (BIS).
An IP’s role is primarily to try and rescue a business. However, where this is not possible, their duty is to act in the interest of the creditors of the business. In these circumstances an IP should agree claims from the business’ creditors, close down the business and liquidate all assets in order to distribute funds to creditors. The IP is obligated to ensure that any funds recovered are equitably shared amongst creditors. The IP will report to creditors regularly and may also chair meetings of creditors.
In some cases an IP will give advice to company directors before a formal insolvency procedure begins on their legal obligations to call meetings of shareholders and creditors and to appoint a liquidator. One of the responsibilities of an IP is to produce a confidential report on the conduct of directors of a failed company. If an IP is appointed as liquidator they will be granted further powers to investigate the directors of the company.
An IP acts on behalf of the business but is not personally liable for the company’s debts. IPs must follow the law as set out in the Insolvency Regulations and keep a complete record of all measures they have taken. Costs (including the IPs fees and expenses) will reduce the amount of funds available for distribution. The costs of the IP’s work have to be agreed by creditors.
An IP’s fees are usually paid out of the funds collected before distribution to creditors. IPs fees can be agreed either as a set amount or a percentage of the value of property the IP has had to deal with or by reference to the time an IP and their firm has had to spend in administering the insolvency. A combination of these methods may sometimes be used.
Gore and Company’s lead IP is Mr Tom Girn, a licensed Insolvency Practitioner, a member of the ICAEW (Institute of Chartered Accountants in England and Wales) and a member of R3, the Association of Business Recovery Professionals. He has been licensed as an IP since 1990 and has many years experience of insolvency work.