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Company Liquidations

Volume 491: debated on Thursday 23 April 2009

To ask the Minister of State, Department for Business, Enterprise and Regulatory Reform if he will make an assessment of the effect on customers and other creditors of companies filing for bankruptcy of the procedures under which insolvency practitioners are paid from an insolvent company's assets before others are refunded. (270122)

The way in which insolvency practitioners are paid is set out in the insolvency legislation and the level of costs and remuneration will vary on a case-by-case basis depending on the circumstances of a particular insolvency.

It is for those with an interest in the proceedings, namely the creditors, to decide on how an insolvency practitioner's remuneration is fixed and in reaching a decision they would be expected to consider such factors as the complexity of a case, the type and value of the assets dealt with and the effectiveness of the insolvency practitioner in

carrying out his duties.

Where the basis of remuneration is not set by the creditors, it is calculated either according to legislative scales or may be set by the court. There are also mechanisms allowing both insolvency practitioners and creditors recourse to the court where remuneration is considered either insufficient or excessive.