Until the commencement of the Bill, there is a legal requirement for the Official Receiver, appointed Liquidators, Administrators and Administrative Receivers to file a report with the Secretary of State on a director’s conduct in the period leading up to the commencement of insolvency. This report is often referred to as a “D-Report”.
The Bill now proposes to make the compilation of a D Report more onerous by requiring that it be filed within 3 months (subject to any agreement by the Secretary of State to extend this period) of the commencement of insolvency, which could provide little opportunity for Insolvency Practitioners to properly report on a director’s conduct.
Additionally, the appointed Liquidator or Administrator will also have the additional duty to provide the same report on an ongoing basis where any information appears that would ordinarily have been referred to or included in the D Report. This will increase the reporting duties of Insolvency Practitioners and also serve to extend the reporting period (and thus the likelihood of disqualification proceedings being commenced against former directors).
Obviously for both Insolvency Practitioners and Directors these changes will have a serious impact and should you require advice on these changes please do not hesitate to contact Francis Wilks & Jones.
