January 2007
Introduction
i What is a partnership?
A partnership is group of persons carrying on a business in common with a view to profit.
ii What is a member of a partnership?
A member is one of the partners. A member can be an individual, a company or even another partnership.
iii What is the Official Receiver’s position when an order is made involving a partnership?
In a partnership case, the official receiver’s status depends on the order(s) made:
iv Must a meeting be called in every partnership case?
(November 2007)
Unless an Insolvency Practitioner (IP) has been appointed by the court, the summoning of a creditor’s meeting is at the discretion of the official receiver but the decision on whether to hold a meeting must be made and notified to the creditors within 12 weeks from the making of the first insolvency order. That decision will be based on whether the official receiver considers that there are sufficient assets to merit the appointment of an IP having considered the guidance given in Technical Manual Chapter 17 paragraph 17.3.
vii How many meetings must be called?
Regardless of the number of estates involved, there will be only one combined meeting.
viii How many sets of notices must be issued?
One set of notices is prepared and issued, the creditors of both the separate and partnership estates being treated as one set of creditors for the purpose of the meeting.
ix Company or bankruptcy procedure?
Where there is a winding-up order only against a partnership without insolvency orders against any of the members, the meetings procedure will be the same as for a company creditors meeting, but please note that no forms are prepared for contributories.
Where there is a winding-up order against a partnership and an insolvency order against one or more of the partners, the meetings procedure will be the same as for a company creditors meeting, but please note that no forms are prepared for contributories.
Where there has been no winding-up order made against the partnership and a joint bankruptcy petition presented by individual members, the procedure will be as for bankruptcy. Generally, this is the most common form of members’ petition .
x Appointment of an Insolvency Practitioner
Where an IP is appointed in a partnership case, he/she will become responsible for all of the estates connected to that partnership - even those where there are no assets.
Notes
Where can I find out more?
The Insolvent Partnerships Order 1994
Technical Manual
Chapter 17 - Part 1, paragraph 17.3
Case Help Manual
Forms to be used:
Generally, the forms to be used in a partnership case will be the same as for a company or bankruptcy as listed in the other Meetings parts of the Case Help Manual.
NNM - notice to court and creditors of decision not to summon meeting.
NFM - notice to court and creditors of First Meeting.
NFN1 and NFN4 - These form replace separate LOIS forms and cover bankruptcy and company cases. They are used to notify the newspaper of the insolvency and /or meeting and LOIS/DOC1 will require you to choose the appropriate option for the particular circumstances of the case.
Click HERE to view the flowchart for Partnership Meetings
Procedure
LOIS screen references are given in brackets eg (DO73).
N B If instructions are given that there is to be no meeting, refer to Case Help Manual: Meetings part ii - No first meeting .
1 Receive instructions that a meeting is to be held. The examiner will have saved an approved Report to Creditors (CAR A form) in a file on the Shared Drive.
2 Ensure that the lists of creditors are complete on LOIS(CA31) for every estate, including reference/account numbers and amounts due according to the information supplied in the PIQ/statement of affairs.
3. Arrange an appropriate date and time for the meeting to be held, ensuring that creditors will receive at least 21 days notice before the meeting date. You should allocate a minimum of 28 days to allow sufficient time for posting, etc. Check that the meeting will be held within 4 months of the insolvency order. If not, apply to the court for an extension of time and await the return of the order from court before sending out the notices.
4. Prepare the Notice of First Meeting (NFM) on LOIS (DO73) stating the date and time of the meeting. Send this to all known creditors of all the estates with:
5. Prepare and send form NMBO on LOIS (DO73) to the partnership and its insolvent members quoting the date and time of the meeting. Also state whether or not the partnership and its insolvent members are required to attend. The examiner will inform you of this.
6. Prepare the notice advertising the meeting in a local newspaper (NFN1/4) and arrange for its publication with the OR's advertising agents, using covering letter LCAD. For further information on this procedure please refer to Case Help Manual part: Gazetting and Advertising.
7 Enter the meeting date and the date the notices were issued on LOIS (CA21) and diarise the meeting date.
After the notices have been sent
8 Deal with proofs and proxies as they arrive, ensuring that LOIS is updated regularly for all estates. (CA31)
The procedure in Case Help Manual part–Meetings–part iv–Day of Meeting can now be followed. Care must be taken that the correct forms are processed, i.e. bankruptcy or company, depending on the status of the case.
IP appointed at meeting
9 Where an IP has been appointed at the meeting, ensure that a consent to act has been received for each estate comprised in the insolvency. Only one will be needed if there is a winding up against the partnership only, otherwise there will need to be as many as there are bankrupt partners.
10 Note the IP’s appointment on LOIS (CA23). Then follow the procedure in the Case Help Manual part: Insolvency Practitioners- Handover to IP.