Proof of debt

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Proofs of debt

The rules applicable to proving a debt are found in the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, rr 14.2–14.25 regardless of whether the insolvency proceeding in which the proof is made is an administration, winding up or bankruptcy proceeding.

A party wishing to file a claim for their debt in a compulsory liquidation, creditors’ voluntary liquidation, administration or bankruptcy must submit a written claim to the liquidator, administrator or trustee in bankruptcy. A creditor who claims is referred to as 'proving' for their debt and the document by which they seek to establish their claim is called their proof of debt.

An office-holder may treat a small debt (being £1,000 or less) as if it were proved for the purpose of paying a dividend without the need for a creditor to file a proof of debt, provided the company’s records contain evidence of the debt. The office-holder must include their intention to do so in their notice of intention to make a distribution to creditors or declare a dividend.

The creditors of a company in a members’ voluntary

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Latest Restructuring & Insolvency News

Challenging administrator appointments–improper purpose and Braganza duty (Glint Pay Ltd & others v Baker and Rowley)

Restructuring & Insolvency analysis: The High Court considered the validity of administrators’ appointments, made ‘out-of-court’ by a secured creditor under paragraph 14 of Schedule B1 to the Insolvency Act 1986 (IA 1986), where: (i) the appointments were made under security which the appointing creditor had acquired (together with the underlying debt) with the specific intention of calling an event of default and then acquiring the borrowers’ business and assets out of administration, and (ii) the companies were not actually insolvent, the event of default relied upon to render the security enforceable was the companies’ failure to provide information. The administrators sought reverse summary judgment and succeeded, the court finding that the appointing creditor was not subject to a Braganza duty and nor was its purpose in making the appointments improper.Written by Sam Fenwick, Partner, and Isabelle Burnett, Solicitor Apprentice, at Wedlake Bell LLP.

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Rational FX—court sanctions distribution plan amid regulatory uncertainty (Kicks and another v MLS-Multinational Logistics Services Ltd (a company incorporated in Malta))

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CATJ publishes updated Business and Property Courts of England & Wales Chancery Guide 2022

The Courts and Tribunals Judiciary (CATJ) has published the updated Business and Property Courts of England & Wales Chancery Guide 2022. Paragraph 3.17 specifically clarifies that arbitration claims applications under the Arbitration Acts 1950–1996 and related matters must follow the procedures set out in CPR 62 and PD 62, and must be issued in the Chancery Division when they relate to partnership or landlord and tenant disputes.

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