August 2002
65.1 General
The function of a liquidation or creditors’ committee is to ensure that the actions of the liquidator or trustee are not beyond his powers and that he carries out his functions in accordance with the provisions of the Act (see paragraph 65.2). Where a practitioner is acting and no liquidation or creditors’ committee is appointed, the Secretary of State carries out the functions of that committee (see paragraph 65.3).
Notes: [s141(5) or 302(2)]
65.2 Practitioner’s powers etc
A liquidator’s powers and duties are detailed in Sections 143(1), 167, 168 and Schedule 4 to the Act whilst those for a trustee are contained in Sections 305(2), 314 and Schedule 5 of the Act. Certain powers are exercisable by the practitioner without recourse to the committee or the court, although others can only be exercised with the sanction of the committee or the court.
Where a practitioner employs a solicitor or disposes of any property forming part of the insolvent’s estate to a person connected with the company or an associate of the bankrupt there is no requirement to obtain the sanction of the committee but the practitioner must notify his actions to the liquidation or creditors’ committee, as appropriate. Where no such committee has been established and the Secretary of State is required to carry out the functions of the committee, such notice is not necessary.
Notes: [s167(2) or 314(2) and (6)] [R4.172(1) or 6.166(1)] [s249 or 435]65.3 Secretary of State sanction provided by Insolvency Practitioner Section
Where the Secretary of State is required to carry out the functions of the liquidation or creditors’ committee delegated authority has been given by the Inspector General to appropriate members of staff in Insolvency Practitioners Section. These duly authorised officers, will exercise the committee’s functions (see also Chapter 1 paragraphs 1.28 and 1.29).
Notes: [R4.172(2) or 6.166(2)]
65.4 Application for sanction
An application for sanction should be submitted in writing directly to Insolvency Practitioners Section. This is made clear in the official receiver’s report to the liquidator or trustee on the handover of the estate.
Notes: [IPROH]65.5 Content of the application
Full details of the matters that require sanction, the content of the application and further guidance for the liquidator or trustee can be found in Dear IP Millennium Edition, Chapter 7 - Creditors/liquidation committee, which is available on The Service’s website.