Explanatory note

(This note is not part of the Regulations.)

These Regulations replace the Insolvency Regulations (Northern Ireland) 1991 (“the 19991 Regulations”) and provide for a less onerous regime in respect of administrative matters that were covered by the 19991 Regulations. In particular the Regulations provide for:

(a)

the abolition of the automatic requirement for liquidators in compulsory liquidations and trustees in bankruptcy to provide annual accounts of their receipts and payments (but the Department of Economic Development (“the Department”) has power to require accounts to be sent to it (regulations 14(1) and 29(1));

(b)

the submission of accounts where a liquidator or a trustee of a bankrupt’s estate vacates office prior to the holding of the final creditors' meeting and the submission of accounts after the holding of the final creditors' meeting (regulations 14 and 29);

(c)

an increase in the hourly rate for remuneration of the official receiver whilst acting as interim receiver, provisional liquidator or as liquidator or trustee where that remuneration is not calculated as a percentage of the assets realised or distributed (regulation 36 and Schedule 1, Table 2). The increases in hourly rates are broadly in line with inflation;

(d)

the abolition, in certain cases, of remuneration for the provision of services by certain grades of staff (regulation 36 and Schedule 1, Table 2); and

(e)

an upper limit on remuneration calculated by reference to realisations for functions carried out by the official receiver in cases where the bankruptcy debts and expenses are paid in full (or, in the case of the bankruptcy debts, are secured to the satisfaction of the court) (regulation 35).

The structure of the Regulations is as follows:

Part 1 deals with the interpretation and application of the Regulations and the revocation of the Insolvency Regulations (Northern Ireland) 1991;

Parts 2 and 3 apply to companies that are being wound up by the court or voluntarily and to bankruptcy. The provisions in those Parts deal with:

(a)

the manner in which money received by a liquidator, a trustee or the official receiver whilst acting as receiver or manager in the course of carrying out their respective functions is to be handled;

(b)

payments by a liquidator, a trustee or the official receiver whilst acting as receiver or manager including provision with respect to unclaimed funds and dividends;

(c)

the payment of interest on funds in the Insolvency Account standing to the credit of a company or a bankrupt;

(d)

the preparation and maintenance of records and their production for inspection; and

(e)

the provision and audit of accounts and the supply by a liquidator, a trustee or the official receiver whilst acting as receiver or manager of accounts to creditors and others.

Part 4 deals with the claiming of money in the Insolvency Account;

Part 5 relates to the remuneration of the official receiver;

Part 6 relates to deeds of arrangement; and

Part 7 contains transitional and saving provisions.

In relation to Part 6 (deeds of arrangement) regulations 46 (form of statement under Article 222(1)(a) of the Insolvency (Northern Ireland) Order 1989), 47(1), (2), (4), (5) and (7) (accounts of receipts and payments) and 49 (partnership accounts) of the 19991 Regulations are re-enacted with amendments in the Deeds of Arrangement Regulations (Northern Ireland) 1996, S.R. 1996 No. 575. Regulation 46 of these Regulations re-enacts regulation 47(6) of the 19991 Regulations with one substantive amendment, the effect of which is that the Department’s power to demand documents and information relating to a trustee’s account of receipts and payments is restricted to where the Department has required the account to be audited after it has been sent to the Department.