FOI release

FOI22_23-072 - Information about bankruptcy creditor’s committee

Published 20 January 2023

Our ref: FOI22-23 072

Re: Freedom of Information Act 2000

Thank you for your emails of 30 September 2022 and 11 October 2022 in which you requested from the Insolvency Service:

Request 1:

“1. I was appointed as a Member of the Bankruptcy Committee in bankruptcy a case.

1. Is this a statutory requirement? If so, what laws or red U.K. Atkins apply?

2. Does a Member of the Bankruptcy have the right to examine papers in the bankruptcy case file(a)? If so, what regulations apply?

3. Does a Member of the Bankruptcy Committee have the right to obtain or take copies of papers in the Bankruptcy file(s)?

4. Does the Bankruptcy Trustee have any powers to request dividend be repaid to him and redistributed after the final dividend is paid?”

Request 2:

“Can a creditor or former creditor claim retrospectively for a dividend payment after the statutory 28 days objection period?

Can he or she claim for money retrospectively for dividend she/he did not claim for in the bankruptcy?

In other words, can he/she turn the clock back and start again?”

Request 3

“1. What rights does a Member of a Bankruptcy Committee have?

1. Does he or she have the right to examine any papers and at any time?

2. Does a bankruptcy trustee have the power to reverse a dividend distribution at any time?

3. Does a person who claims to be a new creditor who appears after the dividend has been distributed and after the statutory 28 days has expired have any rights to a payment?

4. Is it a criminal offence to put a Bankruptcy Trustee under pressure (under pain of a threat to do him financial or reputational damage), to change his decision regarding the distribution of a dividend and is it contempt of court as he is an officer of the court?”

Your request has been dealt with under the Freedom of Information Act 2000 (FOIA).

I can confirm the agency holds some information relevant to your request.

Appointment to and membership of a creditors’ committee in bankruptcy is regulated by the insolvency legislation and most of the requirements are available to you from the website below:

https://www.gov.uk/guidance/technical-guidance-for-official-receivers/43-creditors-and-liabilities

In respect of information captured by your request but not available at the above website I can provide the below:

A creditors’ committee simply represents the creditors and individual creditors have

rights to inspect proofs of debt and the court bankruptcy file. They have no rights to

inspect the trustee’s file.

A trustee can require any dividend which has been incorrectly paid to be repaid and the funds included in a further distribution. A final distribution is declared when the trustee believes they have recovered all possible assets, but this does not prevent a further dividend being declared if more monies become available in the estate.

Other than incorrectly made dividends, once a dividend has been declared and paid it cannot be reversed. The trustee will distribute assets to the creditors who have lodged a proof of debt which has been accepted by the deadline set in the letter notifying an intention to declare a dividend. If a creditor has not proved they can do so after this date, but they cannot disturb the dividend made, only be ‘caught-up’ if any further funds come into the estate.

For example, if a trustee declares a dividend of 5p in the £ and pays the proved creditors, if a further proof of debt is received and further funds are received the trustee will, as far as funds are available, pay that additional creditor a dividend of 5p in the £ before declaring a further dividend.

Section 21 - Information accessible to applicant by other means

The Insolvency Service is not obliged to provide you with a separate copy of information it holds where that information is reasonably accessible to the applicant.

As such, the information at the above link is exempt from disclosure under section 21(1) of FOIA, and your request is refused in respect this information.

Complaints

If you are not satisfied with the response we have provided you and would like us to reconsider our decision by way of an internal review (IR), please contact our Information Rights Team at [email protected] or by post at:

Information Rights Team

The Insolvency Service

3rd Floor

Cannon House

18 Priory Queensway

Birmingham

B4 6FD

United Kingdom

You also have the right to contact the Information Commissioners Office (ICO) if you wish for them to investigate any complaint you may have regarding our handling of your request. However, please note that the ICO is likely to expect an IR to have been completed in the first instance.

Kind regards

Information Rights Team

The Insolvency Service