Q&As

Statutory Declarations in MVLs: Telephone or Proxy Use?

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Published on: 02 March 2021

Paragraph 6 of the Temporary Insolvency Practice Direction Supporting the Insolvency Practice Direction covers the scenario where statutory declarations can take place via video conference. What if the parties involved are unable to access computers or smart phones. Can statutory declarations for a members' voluntary liquidation be made via telephone conference and/or proxy?

The coronavirus (COVID-19) pandemic has led to unprecedented social distancing measures and lockdowns being introduced. This in turn has had a significant impact on the ability of the courts, and court users, to carry out their normal functions. In order to deal with specific challenges relevant to Insolvency proceedings, a new Temporary Insolvency Practice Direction was introduced on 6 April 2020. It expired on 1 October 2020 and has been replaced several times (all in the same form), the most recent version of which, the Temporary Insolvency Practice Direction Supporting the Insolvency Practice Direction (TIPD), has effect from 30 June 2021 and expires on 30 September 2021. For further details on the Practice Direction on Insolvency Proceedings which the TIPD supports, see Practice Note: The Temporary Insolvency

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Jurisdiction(s):
United Kingdom
Key definition:
Insolvency definition
What does Insolvency mean?

This can be defined by two alternative tests (Insolvency Act 1986, s 123):

cash flow test: a company is solvent if it can pay its debts as they fall due, no matter what the state of its balance sheet (Re Patrick & Lyon Ltd [1933] Ch 786);

• balance sheet test: a company which can pay its debts as they fall due may be insolvent if, according to its balance sheet, liabilities (including contingent liabilities) exceed assets.

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