Statement of Insolvency Practice (SIP) meaning

This Checklist This Checklist considers the details a company voluntary arrangement (CVA) proposal must include under the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024 and Statement of Insolvency Practice (SIP) 3.2, together with expectations from other stakeholders likely to be impacted by the CVA, notably the Pension Protection Fund (PPF) and the British Property Federation (BPF): the IR 2016, SI 2016/1024, rr 2.2, 2.3 Statement of Insolvency Practice (SIP) 3.2 PPF requirements, see: Checklist for approval of CVAs involving the Pension Protection Fund BPF requirement, see: Checklist: British Property Federation engagement and red flags for company voluntary arrangements A CVA proposal sets out the detailed terms of a compromise between the company and its creditors, so it must be thorough and correct in every respect. If the proposal or surrounding circumstances are intricate, a solicitor should review or draft it to make sure it faithfully embodies the arrangement’s intentions. The proposal should be clear and...

MTA Personal Injury Solicitors LLP (in administration) (acting by its joint administrators Andrew Lawrence Hosking and Sean Bucknall) v Wiseglass [2024] EWHC 2208 (Ch) What are the practical implications of this case? The burden rests on the administrator, as an office-holder owing fiduciary duties, to substantiate any request for remuneration by being candid with the court and providing information that is adequate, coherent and sufficient. The administrator must justify fees with proper evidence and open disclosure. Statement of Insolvency Practice (SIP) 2 is pivotal in underscoring the duty to identify assets, including prospective claims against third parties such as directors, and to determine what recoveries may realistically be achieved. Paras 9–11 require an initial assessment: this includes making enquiries and/or interviewing directors and senior staff where appropriate, forming a preliminary view on potential recovery routes, and deciding what further investigation is warranted. Paras 4 and 18 emphasise clear reporting of actions taken and outcomes, together with thorough documentation of initial assessments, investigations and conclusions....

Re Moss Groundworks Ltd [2019] EWHC 3079 (Ch) (10 September 2019), [2019] All ER (D) 91 (Sep) What are the practical implications of this case? The court will not entertain an administration application designed to enable a pre-pack sale to existing management where the evidential foundation is so weak that it triggers reasonable doubts about the propriety of the pre-pack. It will be an uncommon instance in which the court proceeds where, as occurred here at an initial hearing before Snowden J, the supporting material falls markedly short. In particular, the court was not satisfied because: there was a pronounced disparity between the apparent value of book debts and work in progress and the consideration being offered for those assets; the marketing of the business appeared to have been extremely truncated; and, on its face, the marketing was not only abbreviated but also seemingly not compliant with Statement of Insolvency Practice 16. Accordingly, the court would not proceed in the...

In this issue: Key R&I law developments Industry/sector guides for R&I lawyers Personal insolvency Corporate insolvency Daily and weekly news alerts Key dates for restructuring and insolvency professionals New content Key R&I law developments Insolvency Service issues May 2025 monthly statistics The Insolvency Service has released its May 2025 figures on corporate and individual insolvencies in England and Wales. There were 2,238 company insolvencies, an increase of 8% on April 2025 and 15% above the same month a year earlier. Individual insolvencies totalled 10,014, broadly in line with April 2025 and 5% higher than in May 2024. See: LNB News 20/06/2025 58. ICAEW announces JIC’s consultation launch on comprehensive SIP 14 insolvency practice updates The Institute of Chartered Accountants in England and Wales has confirmed the Joint Insolvency Committee has opened a 12-week consultation on proposed revisions to Statement of Insolvency Practice 14 (SIP 14), which will conclude after the 12-week period...

The Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024 set out a refreshed framework for taking decisions across all insolvency processes. The granular rules on decision-making are contained in IR 2016, SI 2016/1024, Pt 15. This Practice Note addresses the practical steps for forming a liquidation committee and explains the general creditors’ decision-making in liquidation. In reality, a liquidation committee carries considerable weight where cases are sizeable and complex. The liquidation committee Liquidators must obtain decisions by deemed consent or through a qualifying decision procedure. Physical meetings are permissible only when the relevant minimum number of creditors so request under section 246ZE of the Insolvency Act 1986 (IA 1986), though creditors may call for one before the notice of deemed consent or qualifying decision procedure is sent. In a creditors’ voluntary liquidation, creditors will be asked to determine if a liquidation committee should be created and to put forward nominees for committee membership at the same time as the directors seek their nomination of a liquidator,...

The Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024 introduced an updated framework for decision-making across all insolvency procedures from 6 April 2017. The detailed rules governing decision-making are contained in IR 2016, SI 2016/1024, Pt 15. The prescribed decision procedures There are five decision procedures through which a trustee in bankruptcy (trustee) may obtain a decision from a bankrupt’s creditors under section 379ZA of the Insolvency Act 1986 (IA 1986), namely: correspondence electronic voting virtual meeting physical meeting any other decision-making procedure which enables equal participation by all creditors Seeking a decision without a meeting Correspondence If a decision is sought by correspondence, creditors will only be able to accept or reject the proposal. Electronic voting This mirrors correspondence in that creditors will only be able to accept or reject the proposed decision. Where electronic voting is to be used: the notice delivered to creditors must include any...

The Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, which took effect on 6 April 2017, introduced deemed consent and creditors’ decision procedures as the default means for insolvency practitioners (IPs) to engage with creditors, in place of holding physical meetings. Creditors can still seek a physical meeting if they reject the deemed consent or decision procedure proposed by the IP. Such a request must be made by 10% in value of creditors, 10% in number of creditors, or any ten creditors. Accordingly, the rules on proxies remain relevant where a physical meeting is held. For further reading on the available decision-making routes, see Practice Note: The decision-making procedures and deemed consent. What is a proxy? A proxy is a document completed by a creditor, member or contributory that directs or authorises a proxy-holder to represent them at a meeting or meetings—by speaking, voting, abstaining or proposing resolutions. A proxy can be a specific proxy for a particular meeting, or a continuing proxy for the insolvency...