Notice

Insolvency proceedings - practice note 1/2002

From: William S James, Chief Bankruptcy Registrar of the High Court

Council Regulation (EC) No 1346/2000 and the Insolvency (Amendment) Rules 2002 and the Insolvent Partnerships (Amendment) Order 2002 and the AIE Deceased Persons (Amendment) Order 2002

These statutory instruments introduce changes consequent upon the commencement of the EC regulation on insolvency proceedings on 31 May 2002.

The amendments include, among other things, the prescription of new forms of:

l Petition for administration order

l Winding-up petition

l Petition by contributory

l Bankruptcy petitions

l Petition for administration orders in the estates of insolvent persons

Petitions issued before 31 May 2002 will continue to be accepted in the current form.

From 31 May 2002, petitions will only be issued where they comply with the newly prescribed forms.

On and after 31 May 2002 it will not be necessary to amend a petition which has already been issued before that date but not yet determined by the court, unless the court specifically directs that it be amended in any particular case.

Evidence

The new forms of petition require statements to be made and verified regarding:

l The whereabouts of the debtor's centre of main interests (article 3(1)) and, if the latter is not in the UK, his establishment (article 3(2));

l Whether or not the EC regulation will apply; and,

l Whether the proceedings will be main, secondary or territorial proceedings as defined in article 3 of the EC regulation.

In the case of winding-up petitions (excluding partnerships), there is a presumption (article 3(1)) that the registered office of the debtor company is the centre of its main interests in the absence of proof to the contrary.

No additional evidence will normally be required to support a winding-up petition issued before 31 May 2002 and not yet determined by the court, unless the petitioner is aware or has reason to suspect that either the company's centre of main interests is elsewhere or that the proceedings may not be main proceedings as defined in article 3 of the EC regulation.

In the case of partnership winding-up petitions, petitions for administration orders in insolvent estates, and all bankruptcy petitions there is no presumption as to the whereabouts of the debtor's centre of main interests.

From 31 May 2002 additional evidence will be required to support such petitions issued before 31 May 2002 and not yet determined by the court.

The evidence may be filed in the form of a witness statement, made by or on behalf of the petitioner, certifying the whereabouts of the debtor's centre of main interests (article 3(1)) and, if the latter is not in the UK, his establishment (article 3(2)), whether or not the EC regulation will apply to the proceedings and whether the proceedings will be main, secondary or territorial proceedings as defined in article 3 of the regulation.

Confirmation of creditor's voluntary winding up

The Insolvency (Amendment) Rules 2002 provide (rule 7.62) that an application by a liquidator to the court for confirmation of a creditor's voluntary winding up for the purpose of article 19 of the EC regulation may be made without notice.

The rule prescribes the details of the evidence required to support the application.

Such applications will normally be dealt with by a registrar.