Alison Curry elected to R3’s National Council

We are delighted to announce that Insolvency Support Services director Alison Curry has been elected to the National Council of insolvency and restructuring trade body R3. The Council, comprising senior professionals from across the profession, plays a vital role in the strategic decision-making process of R3.

With Alison’s election confirmed at R3’s AGM on Friday 24 April, fellow Insolvency Support Services director Eileen Maclean commented: “We are very proud indeed that Alison has been elected to serve in this important position with R3. She brings an exceptional wealth and depth of insolvency expertise and practical experience to the role.”

Having joined Insolvency Support Services in 2018, Alison provides a range of compliance, training, outsourcing and practice support services to clients throughout the UK. An engaging public speaker and trainer, she specialises in the practical application of insolvency law and regulation and the drafting of regulatory guidance. Prior to joining Insolvency Support Services, Alison was Head of Regulatory Standards & Support at the Insolvency Practitioners Association.

Alison said: “As a career insolvency practitioner who believes passionately in the value of the work the profession undertakes and the need to support that work, I’m excited to be joining R3’s National Council. R3 will play an essential role in supporting the insolvency profession as we help businesses cope with the effects of the COVID-19 pandemic. As an R3 Council member, I am looking forward in particular to bringing my first-hand experience of both the demands of working in a small practice and the machinery of the regulatory arena to the role.”

Insolvency in the time of coronavirus

Eileen Maclean outlines the challenges of COVID-19 for insolvency practitioners.

We are used to dealing with emergencies with no notice – we are IPs after all – but the speed of response demanded from the business community by the outbreak of coronavirus was unprecedented. Vast numbers of us now work from home and are finding new and innovative ways to manage our cases and deal with our clients and contacts. At the heart of the solution is IT – but IT cannot replace every aspect of an IP’s role. In this month’s article I consider some of the challenges for IPs in this time of coronavirus and how we can help you.

New appointments and AML risks

One of the first things we were asked was can we still take appointments where we have not met the directors in person? We think the answer is yes – but there are a couple of things to note. Firstly, you need to be aware of the AML risk since you are not meeting the directors in person. Adjust your AML policies and procedures accordingly and record this new channel and the risks it poses, if this is a new process for your business. If you are using an online verification tool, the risk is lessened, but make sure that you keep identification under review and check that you are not inadvertently enabling money laundering, the burial of some dubious pre-insolvency activity or giving advice without fully understanding the problems facing the business. Secondly, only if you or your agent must, and it is safe to do so having taken the necessary precautions in line with government advice, visit the premises, and make sure that they are subject to appropriate security measures, in line with your insurer’s requirements.

Advice to directors

The wrongful trading provisions may have been suspended for a period of three months as an eye-catching policy response to the difficulties of running a company in these unprecedented times, but directors are not completely off the hook. Misfeasance provisions in terms of section 212 remain firmly in place, and nothing alters your responsibility to quantify the director’s loan account, examine inter-company or related party transactions or transactions at undervalue or in preference. Your advice to directors at this time needs to reflect that. Unfit conduct is not going to go away, and you need to remind them your obligation to review and investigate will continue. We have a new checklist Investigations and CDDA and two supporting online sessions: Pre-appointment advice to directors and SIP2 and Investigations, which you can purchase separately or as a package with a discount.

Moratorium and other rescue provisions

At the time of writing, we have yet to see a draft of the UK government’s moratorium and rescue proposals although we expect them to build on the BEIS response to the Insolvency and Corporate Governance consultation. That contains proposals for a new moratorium to assist business rescue, the prohibition of termination clauses on the grounds of insolvency and a new restructuring process that will allow cross cram-down onto secured and/or unsecured creditors. As always, the devil will be in the detail, and the speed at which it is likely to be introduced. In the meantime the profession, supported by the courts, finds faster, inventive approaches to retail and high street casualties with a ‘light touch’ administration appointment in Debenhams.

Reputational risk

The sun will set in 2022 on the single regulator provisions introduced by SBEE Act 2015 following a review of the regulatory landscape. There is no indication at the moment what the government response to the formal consultation might have been pre-pandemic, but our approach in these dramatic times may well dictate whether we retain the privilege of self-regulation in the future.

The revised Insolvency Ethics Code was published at the start of the year and comes into effect on 1 May 2020. You can get to grips with the changes in our online session. Insolvency and IPs have not been far from the headlines in recent years, and we are headlining again now, big time. Our approach, our fees and our conduct are centre-stage of press, public and government scrutiny and one of our biggest challenges in these times is managing and protecting our collective professional reputation. The introduction of our new ethics code is uncannily well-timed.

COVID-19 our response

And therefore, to assist you in these times, we have prepared a free-to-view video: COVID-19: An Insolvency Practitioner’s Risk and Response. It covers dealing with employees – your and your cases’ workforce – risks and challenges presented by working from home, contributions management, protecting estate funds and assets, and meeting your statutory obligations.

Preferential status for HMRC

Following my February article on the return of preferential status for HMRC, due originally to commence on 6 April 2020, it is marginally gratifying to see the provision has been delayed until late 2020. We can’t predict at this stage HMRC’s overall exposure to lost revenue (but we know it will be a lot) or what their approach will be to collections (but we can guess) and in light of the widespread expected increase in numbers of insolvencies, whether they will be geared up to exercise their role as preferential creditor in a significantly higher number of insolvencies than a benign economic environment would produce (we can only hope).

Conclusion

We are always here to assist and protect your business. Please get in touch if we can help.

In the meantime, stay safe in these challenging times.

First published in the April 2020 edition of RECOVERY NEWS and reproduced with the permission of R3 and GTI Media.

Brand new Investigation and CDDA Checklist

We now have an Investigation and CDDA checklist, intended for use by IPs and their staff dealing with investigations into company director conduct, recovery and disqualification.  Applying across insolvent liquidation, administration and receivership, the checklist reflects current insolvency and CDDA legislation and all statutory references are hyperlinked to the relevant sections.  

The checklist retails for £500 (ex VAT).

There are two supporting online sessions: Pre-appointment advice to directors and SIP2 and Investigations, which normally retail for £50 (ex VAT) per participant.  One single use registration of each online session will be included with the purchase of the checklist for a limited period of time.  For two or more registrations to each session, please speak to us directly.