Insolvency amending rules came into force in April this year, modernising insolvency practices and procedures. A Willans solicitor reports on some of the more notable changes.
The new rules have made it much easier for a creditor to participate in creditors’ meetings. These no longer have to be held at a pre-specified place and in some circumstances, the use of electronic means is allowed to enable ‘attendance’ by a creditor for voting purposes.
Wider use of electronic communication also means that administrators or insolvency practitioners can now provide notices and information to creditors via a website. Any requirement for information to be provided ‘in writing’ now also includes the use of electronic means, such as email.
The question of the use of e-mail in relation to insolvency proceedings arose in a recent case before the High Court. One factor the judge took into consideration was that savings of around £50,000 could be made by the administrators in the case if service of certain documents was allowed by email.
Although this decision was made before the implementation of the 2010 rules, it gives an idea of the potential for reducing administrative costs. These more streamlined procedures should shorten the time involved in administering winding-up and bankruptcy proceedings. It is to be hoped that the savings in administration costs may result in more funds becoming available for distribution between creditors.
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