UNCITRAL
United Nations Commission on International Trade Law
Insolvency Office Holders Principles
Neil Cooper
INSOL International
EBRD Insolvency Office Holders Principles
Principle 1 - Qualifications and Licensing Generally
Principle 2 - Appointment in an Insolvency Case
Principle 3 - Review of Office Holder Appointment
Principle 4 - Removal, Resignation and Death of Office Holder
Principle 5 - Replacement of Office Holder
Principle 6 - Standards of Professional and Commercial Conduct
Principle 7 - Reporting and Supervision
Principle 8 - Regulatory and Disciplinary Functions
Principle 9 - Remunerations
Principle 10 - Release of Office Holder
Principle 11 - Insurance and Bonding
Principle 12 - Code of Ethics
UNCITRAL
United Nations Commission on International Trade Law
Principle 1 - Qualifications and Licensing Generally
•
An IOH should have fundamental qualifications including
general ability and intelligence, experience, professional
knowledge and good character
•
IOH should be regarded as professional body of persons and
regulated by a system of licensing
•
The law or regulatory framework should provide:
-
the qualification of IOH
-
examination in insolvency law and practice and other relevant subjects
-
licensing or registration of candidates who satisfy qualification
standards
-
register of licensed / registered IOH
-
requirement for continuing education for IOH
-
renewal of a license or registration
-
[licensing of a corporate body]
UNCITRAL
United Nations Commission on International Trade Law
Principle 2 - Appointment in an Insolvency Case
•
There must be predictable and fair process for appointing IOH
•
The law should state:
-
grounds upon which IOH may be ineligible for appointment
-
body who may appoint IOH
-
where appointment is by court (or other relevant authority),
clear guidelines for selection of IOH
where appointment is by general body of creditors, manner
in which appointments is made
-
where appointment is by debtor, the manner in which
appointment is made
no restriction on the number of cases in respect of which
IOH
may be appointed
UNCITRAL
United Nations Commission on International Trade Law
Principle 3 - Review of IOH Appointment
•
Process for appointing IOH needs transparency and impartiality
•
Both creditors and debtors with an interest in who is appointed
should have opportunity to oppose an appointment
•
Accordingly, law should facilitate review of appointment by:
-
providing grounds on which an appointment may be
reviewed
-
providing process for review
-
if an appointment is set aside, providing for appointment
of another qualified IOH
UNCITRAL
United Nations Commission on International Trade Law
Principle 4 - Removal, Resignation and Death of an IOH
•
The parties in interest may wish to remove an IOH
from office or an IOH may wish to retire from office
or may die.
•
Accordingly, law should provide for:
-
resignation of IOH
-
grounds on which IOH may be removed
-
process for removal of IOH
UNCITRAL
United Nations Commission on International Trade Law
Principle 5 - Replacement of an IOH
•
The process of a replacement of an IOH is important
•
Accordingly, where IOH dies, retires or is removed, law should
provide:
-
for prompt appointment of new IOH to replace former IOH
-
that new IOH is entitled, without delay, to assets, books
and
records of former IOH
-
that retiring or removed IOH must co-operate with and assist
new IOH in transfer and transmission of the conduct of case
UNCITRAL
United Nations Commission on International Trade Law
Principle 6 - Standards of Professional and Commercial Conduct
•
Standards are essential for establishing and measuring the
performance of IOH
•
Accordingly, the law should:
by primary legislation, provide basic, fundamental standards
critical to proper professional and commercial conduct by IOH
-
by secondary legislation, provide standards for:
a)
reports
b)
initial collection and safeguarding of assets
c)
trading of the debtor's business subsequent to opening proceedings
d)
keeping records
e)
convening and conduct of creditors meetings
f)
sale and operation of bank accounts
g)
opening and operation of bank accounts
h)
reorganisation plan contents and explanatory memorandum
UNCITRAL
United Nations Commission on International Trade Law
Principle 7 - Reporting and Supervision
•
Creditors, debtor and others with interest in a case (including
court or regulatory body) must be regularly informed about the
progress of a case and that relevant information is available to
them. This may be best facilitated through reports. This also
provides a basis upon which the work of IOH and the progress
of case may be monitored.
•
Accordingly, the law should provide:
that IOH provide regular reports on the work undertaken
and progress of the case
-
for a committee of creditors to oversee the IOH
-
that the performance of IOH be monitored
UNCITRAL
United Nations Commission on International Trade Law
Principle 8 - Regulatory and Disciplinary Functions
•
The level of trust, responsibility and work standards required of an
IOH requires commensurate regulation and discipline.
•
Accordingly, the law should:
provide for a government or other body (including a recognised
professional association) to have appropriate regulatory,
investigatory and disciplinary powers in respect of IOH
provide for the ground upon which the conduct of an IOH may
be investigated
UNCITRAL
United Nations Commission on International Trade Law
Principle 8 - Regulatory and Disciplinary Functions cont’d
-
provide for the regulatory body to have power to:
a) investigate conduct of an IOH on referral by court, complaint
of a third party or on its own motion
b) intervene in proceedings concerning conduct or removal of
IOH
c) impose disciplinary measures for misconduct
-
provide that disciplinary powers include power to:
a)
fine
b) suspend the license or registration
c) terminate registration or license
d) require IOH to compensate third parties
e) require IOH to undergo further education and training
UNCITRAL
United Nations Commission on International Trade Law
Principle 9 - Remuneration and Expenses
•
Reward : the level and determination of reward is critical
•
Accordingly, the law should provide:
-
for the entitlement to be remunerated for work done and to
recover expenses
-
the remuneration may be determined by a court, relevant
authority or other institution
-
the basis upon which the remuneration may be calculated
-
an appropriate mechanism for review of the remuneration
-
payment of remuneration out of the estate of the debtor
-
an appropriate level of priority ahead of other claims
UNCITRAL
United Nations Commission on International Trade Law
Principle 10 - Release of Office Holder
•
The law should provide that, subject to any
objection by a regulatory body or an interested
party, an IOH may be released from his / her
appointment in an insolvency case
UNCITRAL
United Nations Commission on International Trade Law
Principle 11 - Insurance and Bonding
•
The law should require that an IOH must have
professional indemnity insurance cover to protect
third parties against negligence or breach of duty
or fraud
UNCITRAL
United Nations Commission on International Trade Law
Principle 12 - Code of Ethics
•
The law should encourage and facilitate the
development of a code of ethics for IOH, preferably
through a professional body
UNCITRAL
United Nations Commission on International Trade Law