The procedure for Debt Relief Orders ("DRO") is unchanged, possibly because it is a comparatively new process having only come into force in 2009. However there has been some shuffling of rules numbers, in an effort to regularise and make the structure more logical.
Eligibility
To be granted a DRO, the debtor:
English Liquidators of a fraudulent investment company were able to navigate a complex web of defunct companies and trusts to realise assets in a Jersey company.
The partners of Arck LLP (in Liquidation), registered in England ("Arck"), an investment firm, were convicted of fraud and forgery. Richard Clay, thought to be the driving force of the scandal, is now serving a 10 years 10 months prison sentence and his deputy Kathryn Clark received a two year suspended sentence.
- Harbour Fund II LP v. (1) Orb a.r.l. (2) Litigation Capital Funding [2017]JRC171 ("the September judgment")
- Harbour Fund II LP v. (1) Orb a.r.l. (2) Dr Gail Cochrane [2017]JRC007 ("the January judgment")
- Representation of the Viscount re Cochrane and Orb a.r.l. [2017]JRC025 ("the February judgment")
The high profile cross border insolvency of Orb a.r.l. ("Orb") has been the subject of three linked judgments from the Royal Court in Jersey.
The rules relating to income payment orders ("IPO") and income payment agreements ("IPA") are largely unchanged. The time periods dictated in the old rules for IPOs and IPAs remain the same, however there are some added requirements in the new rules, particularly in relation to the contents of notices and orders.
Rule 10.109 Application for income payments order (section 310)
[…]
(4) the notice to the bankrupt must be authenticated and dated by the trustee.
Rule 10.110 Order for income payments order
Section 216 continues to apply to prohibit the re-use of a name or sufficiently similar name where oldco and newco have common directors.
The relevant rules now dealing with the exceptions are contained in new rules 22.1 - 22.7.
The three exceptions remain broadly the same but there are some key differences to note.
Exceptions to the prohibition
The Appeals process is governed by Rules 12.59; 12.61 and Schedule 11. The old corresponding provisions were Rules 7.47 and 7.49A.
The major change to the provisions is that there is now clarification on appealing decisions made by District Judges. The new rules provide that these appeals will now lie either to a High Court Judge in a District Registry or a Registrar in Bankruptcy at the High Court. This was previously the case, but was only inserted into the old rules by way of an Amendment - they now come fully under the scope of the rules.
The out of Court appointment processes are broadly similar to the processes under the Insolvency Rules 1986 with some minor amendments. The most significant change is the abolition of the prescribed forms for appointment documents.
Whatever type of appointment (out of Court by company/directors, out of Court by Qualifying Floating Charge Holder ("QFCH"), application to Court), the Consent to Act form and contents is dealt with by r3.2.
Appointment out of Court by directors/the Company
This briefing note addresses the effect of the Insolvency Rules 2016 ("Rules") to the: (i) Electronic delivery of documents; and (ii) use of Websites to deliver documents.
Consolidation of the Rules
The Rules in relation to Electronic delivery of documents and use of websites have been applied as follows, namely:
Rules 18.15 to 18.38 of the Insolvency Rules 2016 deals with remuneration principles, fixing of remuneration, challenges by creditors and applications to Court by officeholders in relation to their remuneration placing all the rules surrounding remuneration in one place as opposed to dotted around the various procedures in the old rules.
Principles
Rule 18.16 sets out the general principles as to how administrators, liquidators and trustees can be remunerated and is largely unchanged from the old rules.
Part 15 Insolvency Rules 2016 consolidates the rules in relation to notices, voting rights, exclusions and appeals introducing some much needed consistency between the different insolvency processes. Most of the changes are minor, but the new Rules also introduce two radical changes:
1. The abolition of physical meetings as the default decision making mechanism in all insolvency processes, and
2. New decision making procedures (including deemed consent which will be covered in next week's update.)