Bankruptcy Restriction Order meaning

Restructuring & Insolvency weekly highlights—29 August 2024 In this issue: Corporate insolvency processes Restructuring Personal insolvency Directors and insolvency Daily and weekly news alerts Corporate Rescue and Insolvency (August 2024 edition) New Q&A Corporate insolvency processes Company’s register of members | Conclusive or not for voting rights? (Bland v Keegan) In proceedings relating to JDK Construction Ltd (JDK), the Court of Appeal examined a challenge to the lawfulness of a written resolution appointing joint liquidators, alongside allegations of an unauthorised share transfer form. The Appellant argued her shares in JDK were wrongfully transferred, rendering the liquidators’ appointment invalid. The key question was whether the company’s register of members—recording her shares as transferred—was determinative for validating the members’ resolution. Affirming the decision of His Honour Judge Hodge KC, the Court of Appeal held that the register stands as prima facie evidence of who the members are and of the validity of resolutions passed by them, unless...

What is a Bankruptcy Restriction Order? When a person is made bankrupt (sequestrated), they are bound by restrictions under the Bankruptcy (Scotland) Act 2016 (Ba(S)A 2016) and other related legislation. Ordinarily, twelve months from the start of sequestration, the debtor is discharged and the limitations that apply to undischarged bankrupts no longer apply. A Bankruptcy Restriction Order (BRO) can be imposed on a debtor following an application to the Accountant in Bankruptcy (AiB) (see Practice Note: Scotland: the Accountant in Bankruptcy) or to the Sheriff, and it maintains restrictions after discharge from sequestration. For commonly used Scottish insolvency terminology, see Practice Note: Glossary of Scottish insolvency words and expressions. Effects of a BRO A BRO places ongoing restrictions on the debtor for the period stipulated in the order. The Ba(S)A 2016 does not provide a comprehensive list of all restrictions that apply where a BRO is in force. Instead, reference must be made to other legislation, which specifies that an individual subject to a BRO is disqualified...

This is a glossary of common words and expressions used in Scottish insolvency law with the nearest England and Wales insolvency law equivalent (where relevant) Absolute insolvency Meaning: When a person’s liabilities are greater than the overall worth of their assets. Nearest English equivalent: Balance sheet insolvency. Accountant in Bankruptcy (AiB) Meaning: A Scottish Government agency overseeing the regulation of personal bankruptcy (sequestration and Protected Trust Deeds) in Scotland, and able to serve as trustee in sequestrations where no insolvency practitioner is appointed. It also maintains records of corporate insolvencies in Scotland (receivership and liquidations only) but does not perform the role of Official Receiver. See Practice Note: Scotland: the Accountant in Bankruptcy. Nearest English equivalent: N/A. Accountant of Court Meaning: A court-appointed officer within Scottish Courts and Tribunals who administers funds consigned to the Accountant of Court pursuant to a Court of Session interlocutor or during liquidation proceedings. They oversee Judicial Factors or Administrators appointed by the Court to manage estates...

This practice note discusses the ability for a disqualified director to apply for permission to act as a director despite disqualification, using s 17 of the Company Directors Disqualification Act 1986 (CDDA 1986). It outlines the legal context in brief, and then focuses on the considerations the court may weigh when deciding whether to grant leave. For guidance on the procedural steps to seek leave, see Practice Note: Applications for leave to act as a director under section 17 of the Company Directors Disqualification Act 1986—jurisdiction, parties and the application procedure. For information on potential terms the court may attach to any permission, see Practice Note: Applications for leave to act as a director under section 17 of the Company Directors Disqualification Act 1986—possible conditions attached to leave. Directors may face disqualification under various statutory routes. For the purposes of these permission notes, the focus is on disqualification under CDDA 1986, ss 6, 8, 10, 11 and 12, which also encompasses disqualification arising from a Bankruptcy...

Section 283 of the Insolvency Act 1986 (IA 1986) In general terms, section 283 states that every asset belonging to the bankrupt, or in which the bankrupt held an interest on the date the bankruptcy order was made, forms the bankruptcy estate. Under IA 1986, s 306, that estate vests in the trustee in bankruptcy (trustee) immediately and automatically on appointment, and stays vested until the trustee deals with it, typically by sale—see Practice Note: What assets vest in the trustee in bankruptcy and what steps does the official receiver or trustee in bankruptcy need to take? Where the estate includes land or a beneficial interest in land, the trustee should ensure that the correct entries are or become noted against the title, whether the title is registered or unregistered. Depending on whether the property is owned solely or jointly, certain entries may (or should) be made automatically; if they are not, the trustee can apply to the Land Registry. For more detail, see Practice Note: Protecting a...

Insolvency Rules 2016 (IR 2016), SI 2016/1024, Part 14 Part 14 of the Insolvency Rules 2016 (SI 2016/1024), which sets out how creditors’ claims are dealt with, also operates in a members’ voluntary liquidation (MVL) by reason of r 14.1(1). That rule confirms that this Part applies to administration, winding up and bankruptcy proceedings, without any restriction confining its operation to insolvent liquidations. What amounts to a provable debt in a winding up (and equally in administration and bankruptcy) is defined by r 14.2(1). Save as otherwise provided in that rule, every creditor’s claim is provable as a debt against the company or the bankrupt, whether the liability is present or future, certain or contingent, ascertained or recoverable only in damages. For further guidance, see Practice Note: Future debts, contingent debts, secured debts...