Creditors who want transparency have a number of options available to them. Little could arguably be more frustrating for a creditor than having to deploy Stakhanovite fervour to extract information on how their case is going.
Transparency is the right of a creditor and an Insolvency Practitioner’s duty under the Insolvency Practitioner Code of Ethics:
“… an Insolvency Practitioner in the role as office holder has a professional duty to report openly to those with an interest in the outcome of the insolvency. An Insolvency Practitioner should always report on his acts and dealings as fully as possible given the circumstances of the case, in a way that is transparent and understandable. An Insolvency Practitioner should bear in mind the expectations of others and what a reasonable and informed third party would consider appropriate.” [added emphasis]
Creditors should be provided with transparency in the annual progress reports.
Regulatory best practice reinforces this position for creditors in Statement of Insolvency Practice Number 1 where it says:
“… insolvency practitioners should ensure that their acts, dealings and decision making processes are transparent, understandable and readily identifiable, where to do so does not conflict with any legal or professional obligation” [added emphasis]
These guiding principles suggest that Insolvency Practitioners ought to be engaging with creditors not only when the annual report becomes due but when creditors of their own volition seek that engagement. Not all that many creditors are actively involved in cases during the relevant year. Many are content to await the annual report, so those creditors who are proactive and seek out the Insolvency Practitioner are deserving of reasonably expeditious engagement on matters of transparency.
Aside from the regulatory obligations there are obligations that arise from the fiduciary responsibility and position that an Insolvency Practitioner occupies. It seems that by virtue of the duty of loyalty that a fiduciary owes to those with an interest in the outcome of an insolvency, that a duty of transparency presumably flows from the same also.
At Oliver Elliot our CEO, Elliot Green, has over 20 years experience of helping creditors in insolvency proceedings. Call now on 020 3925 3613 for a Free Initial Consultation if you are a creditor seeking transparency in an insolvency matter.
“Creditors Who Want Transparency” is a post that is not legal advice and should not be relied upon as such. You should seek independent legal advice about the facts of your case.