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Ordinary resolution That [insert name of director]

Where a creditor is dissatisfied with the action of an office-holder and resolution cannot be reached between the parties, the insolvency legislation, namely the Insolvency Act 1986 (IA 1986) and Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, provide mechanisms to remove the office-holder. These developed in line with the decision making procedure for creditors created by IR 2016, SI 2016/1024, Pt 15. See: Creditor communication and decision procedures—overview. It should be remembered that there are other ways that an office-holder may vacate office such as resignation or death. For further information, see: Procedure for retirement or resignation of an office-holder—checklist. The Corporate Insolvency and Governance Act 2020 received Royal Assent on 25 June 2020 and introduced a moratorium procedure. For further details, see Practice Note: Moratorium. The appointment of a monitor is a crucial part of that process and there are provisions for the replacement of the monitor in certain circumstances and/or the appointment of an additional monitor by court order (see IA 1986, ss A1–A55). Insofar as the removal of an office-holder

Private Client analysis: An executrix, Sharon Hudman (Sharon), brought a Part 8 Claim under section 50 of the Administration of Justice Act 1985 (AJA 1985) and in the alternative section 116 of the Senior Courts Act 1981 (SCA 1981), seeking the removal or passing over of Alan Morris (Alan) as executor to her husband’s estate. The court decided that the proper and effective administration of the estate would be threatened by Alan’s continued status as executor. In any event, the wholesale breakdown of relations between Alan and the other beneficiaries would have justified the appointment of an independent administrator. The court removed both executors and appointed an independent administrator. Written by Adam Stewart-Wallace, barrister at Ten Old Square.

Restructuring & Insolvency analysis: The court granted an application to remove administrators under paragraph 88 of Schedule B1 to the Insolvency Act 1986 (IA 1986) and refused a cross-application to appoint conflict administrators. The court found that there was a conflict of interest which affected so much of the administration that it could not be remedied by the appointment of conflict administrators. Moreover, the court decided that the administrators’ conduct since the conflict of interest came to light went sufficiently far outside what might ordinarily be expected so as to justify the applicants’ loss of confidence in them. Written by Grace Ferrier, barrister at Essex Court Chambers.

In compulsory liquidation, a liquidator may be removed from office by the court. In voluntary liquidation, the court may, if good cause is shown, remove a liquidator and appoint another. While section 172(2) of the Insolvency Act 1986 (IA 1986) (which applies to compulsory liquidation) and IA 1986, s 108 (which applies to voluntary liquidation) are worded differently, the same criteria apply namely that good cause must be shown to obtain a removal order. For key cases and associated relevant content in relation to the removal of a liquidator by the court, see Practice Note: Removal of liquidator by the court—key cases. Applicants IA 1986, ss 108 and 172(2) do not clarify who can apply for removal. The court will determine whether an applicant has sufficient interest to make the application. The applicant must demonstrate that they are qualified to make the application and are a proper person to do so in that they have a legitimate interest in the relief sought. While a creditor will qualify, a contributory who is fully paid

This Practice Note sets out certain key cases and associated relevant content in relation to the removal of a liquidator by the court. The cases are divided by topic area and include: • the applicant • the court’s discretion • security for costs • appeals • costs For further reading on this topic, see: • Practice Note: Removal of liquidator by the court • Removal of an office-holder—checklist The applicant Names of parties Judgment date Case summary Relevant content HM Customs & Excise v Allen [2003] BPIR 830, [2003] All ER (D) 27 (Apr) 4 February 2003 A creditor will have standing to apply. Deloitte Touche AG v Johnson [1999] 1 WLR 1605 10 June 1999 An applicant seeking the removal of an office-holder must demonstrate that they are a qualified and proper person to make the application in that they have a legitimate interest in the relief sought. Re Stella Metals Ltd (in liquidation) [1997] BPIR 293 11 July 1996 It may be appropriate for a recognised professional

Enforced removal from the United Kingdom of a person who is not a British citizen in accordance with directions given by an immigration officer under Immigration and Asylum Act 1999 (IA 1999), s 10.

The trustee of a bankrupt’s estate may be removed from office by: • an order of court, or • a decision of the bankrupt’s creditors made by a creditors’ decision procedure instigated specifically for that purpose in accordance with the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024 Where a trustee has been appointed by the Secretary of State, they may be removed by a direction of the Secretary of State. Removal by court Application may be made to court under section 298(1) of the Insolvency Act 1986 (IA 1986) for: • the removal of the trustee, or • an order directing the trustee to initiate a creditors’ decision procedure for the purpose of their removal On receipt of an application under IA 1986, s 298(1), the court may, if it is satisfied that insufficient cause is shown for it, dismiss it without giving notice to any party other than the applicant. Unless the application is dismissed, the court must fix a venue for it to be heard. The applicant

This Practice Note sets out certain key cases and associated relevant content in relation to the removal of a trustee in bankruptcy (trustee) by the court. There is substantial useful authority in relation to similar jurisdiction concerning the removal of a liquidator. See Practice Note: Removal of liquidator by the court—key cases. For further reading on this topic, see: • Practice Note: Removal of trustee in bankruptcy • Removal of an office-holder—checklist The court’s discretion Names of parties Judgment date Case summary Relevant content Re Birdi (in bankruptcy); Miles v Price [2019] EWHC 291 (Ch), [2019] All ER (D) 120 (Feb) 15 February 2019 The question of whether to remove an insolvency practitioner has to be measured by reference to the real substantial, honest interests of the process, and to the purpose for which the office-holder was appointed. The primary purpose of bankruptcy is the orderly payment of creditors and the principal interest is that of the creditors. The court does not lightly remove its own officer and

A voluntary liquidator can only be removed by an order of the court or: • in the case of a members’ voluntary winding up (MVL), by a general meeting of the company summoned specially for that purpose, or • in the case of a creditors’ voluntary winding up (CVL), by a decision of the company's creditors made by a qualifying decision procedure instigated specially for that purpose This Practice Note deals with the latter. Procedure for removal of a voluntary liquidator Proposal of decision procedure A decision procedure must be instigated under section 171(2)(b) of the Insolvency Act 1986 (IA 1986) for the removal of the liquidator if 25% in value of the company’s creditors, excluding those connected with the company, request it. This is unless the liquidator was appointed by the court under IA 1986, s 108 in which case a qualifying decision procedure is to be instigated only if: • the liquidator thinks fit • the court directs, or • not less than 50% in value of the company’s creditors request

Background This Practice Note summarises the statutory provisions of the Companies Act 2006 (CA 2006) in relation to the removal or resignation of an auditor in respect of financial years beginning on or after 1 October 2015. Section 18 and Schedule 5 of the Deregulation Act 2015 (DA 2015), which came into force on 1 October 2015, made a number of changes in relation to auditors, which include provisions dealing with the removal or resignation of an auditor. These provisions have effect in respect of financial years beginning on or after 1 October 2015. For details of the statutory provisions in respect of financial years beginning before 1 October 2015, see archived Practice Note: Removal or resignation of an auditor—financial years beginning before 1 October 2015 [Archived]. In addition to the statutory provisions, there may be other rules relating to the removal or resignation of an auditor that apply to a listed company, an AIM company or a company with securities that are listed on the AQSE Main Market or AQSE Growth Market (formerly