Insolvency Interviews

Section 235 of the Act imposes a duty on a wide range of persons associated, or previously associated with the company, to cooperate with the Insolvency Practitioner or Official Receiver.

The duty extends to:

• Providing the Insolvency Practitioner with information concerning the company and its promotion, formation, business, dealings, affairs or property as he may reasonably require, and
• Attending on the Insolvency Practitioner at such times as he may reasonably require. This includes an obligation to attend meetings and interviews

The list of persons under such a duty to cooperate includes:

• Company directors and those who, are or have at any time, held any position as an officer of the company
• Those who have taken part in the formation of the company at any time within one year before the date of administration/liquidation
• Those who are in the employment of the company, or have been in its employment (including employment under a contract for services) within that year, and are, in the Insolvency Practitioner’s opinion, capable of giving information which he requires
• Those who are, or have within that year been, officers of, or in the employment (including employment under a contract for services) of another company which is, or within that year was, an officer of the company in question, and
• In the case of a company being wound up by the court, any person who has acted as Administrator, Administrative Receiver or Liquidator of the company

The consequences of failing to cooperate:

• If a person without reasonable excuse fails to comply with any obligation as set out above, he is liable to a fine and, for continued contravention, to a daily default fine
• The Insolvency Practitioner also has the option of exercising his powers under section 236 of the Act (see below) in order to seek the attendance of the relevant person before a court. This power is usually used where the relevant person has failed to cooperate with requests from the Insolvency Practitioner under section 235 of the Act

Section 236 of the Act allows an Insolvency Practitioner to summons to court any person who may be able to provide him with information or records concerning the company’s affairs.

The person summonsed will be required to give oral evidence in court.

Who can be summonsed to Court?

The court, on application by the Insolvency Practitioner, can require the attendance of any of the following persons:

• Most commonly, company directors/any officer of the company
• Any person known to have, or is suspected to have, in his possession any property of the company or suspected of being indebted to the company, or
• Any person who the court thinks capable of giving information concerning the promotion, formation, business, dealings, affairs or property of the company

What Can the Court Order?

The court may require any person mentioned above to:

• Submit to the court an account of his dealings with the company. An account submitted to the court must be contained in a witness statement verified by a statement of truth
• Produce any books, papers or other records in his possession or under his control relating to the company
• Pay to the Insolvency Practitioner any sum due to the company either as full or part settlement of the debt

What happens if a person fails to attend Court?

A failure to attend court can have very serious consequences including the issuing of an arrest warrant.

If:

• A person without reasonable excuse fails to appear before the court when he is summonsed to do so, or
• There are reasonable grounds for believing that a person has absconded, or is about to abscond, with a view to avoiding his appearance before the court

then the court may, for the purpose of bringing that person and anything in his possession before the court, issue a warrant for:

• The arrest of that person, and
• The seizure of any books, papers, records, money or goods in that person’s possession

In addition, the court may authorise:

• A person arrested under such a warrant to be kept in custody, and
• Anything seized under such a warrant to be held until that person is brought before the court under the warrant or until such other time as the court may order

Our team of expert lawyers is here to guide you in relation to any insolvency related issues including section 235 interviews and section 236 oral examinations in court.

We are happy to provide an initial no obligation confidential consultation at our offices in London, Birmingham or Manchester or via video conferencing facilities to explore the issues in your case and to provide an assessment of how we can assist you.

The expert lawyers at Kangs are available to assist you. We can arrange initial consultations in person, by video call or telephone.

Please contact one of our experts listed below or contact us at:

E: info@kangssolicitors.co.uk

T: 0333 370 4333