Receiverships can run for years

Article Abstract:

Because receiverships can continue for many years, unsecured creditors run the risk of having the six year limitation on recovery expire before the creditor's claim is settled. The unsecured creditor should therefore have his claim periodically acknowledged by the receiver. The simple recording of the unsecured creditor's claim in the receivership's statement of affairs may not be sufficient to prevent the claim from being statute-barred. Creditors should send a letter, in duplicate, to the administrative receiver. The letter should detail the claim and request that the receiver return the copy signed and dated. This letter should be sent no less than once every five years. Creditors may also seek a compulsory winding-up order from the courts, although the winding-up order is also subject to the same six-year limitation.

Interpretation and construction, Commercial law, Receivers (Law)

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Some aspects of insolvency law reform

Article Abstract:

The 1986 Insolvency Act and the 1986 Company Directors Disqualification Act were the most significant reforms to insolvency law in the UK since the 19th Century. The reforms were established to introduce a code of conduct for directors and other officers to punish company financial malpractice. The law creates a statutory framework encouraging companies to pay close attention to finances so that difficulties can be recognized early before endangering the health of creditors. Under the law, accountants and financial advisers must: deal with technical matters; not delay the preparation of accounts; and give unambiguous advice to directors when it is perceived that companies have financial difficulties.

Methods, Accounting

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Taking the harder way out

Article Abstract:

The Institute of Chartered Accountants of Great Britain has set up an Insolvency Practitioners Committee (IPC) to review the Insolvency Rules in comparison with the Insolvency Act of 1986 and the Company Directors Disqualification Act of 1986. The purpose is to determine how to help implement the Acts. The IPC is also concerned with the establishment of exams for insolvency practitioners. IPC plans joint seminars and lectures on insolvency practice. By 1990, practitioners will be required to pass exams to get a license. This helps assure that the Acts' impetus will be expedited: keeping companies in business rather than liquidating them.

Accounting, auditing, & bookkeeping

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