Dear Ms McNeill,
There is little I can add to our previous exchanges.
I am aware that your organisation is representing a number of individuals who believe that the courts should not have made bankruptcy orders against them. The correct way in which to deal with those issues is by way of appeal to a higher court.
I am also aware of issues raised by those individuals concerning the appointment of insolvency practitioners as trustees of their bankruptcy estates. The function of a trustee in bankruptcy, as set out in the insolvency legislation, is to get in, realise and distribute the bankrupt’s estate in accordance with the legislation. In doing so it is the duty of the insolvency practitioner to use his or her professional and commercial judgment to maximise the realisation of assets for the benefit of creditors. The insolvency practitioner acts under the supervision of the court, it is generally open to creditors, and debtors, to bring matters before the court where they believe their interests are being unfairly harmed.
If you consider the individuals you represent have been failed by the judicial system then this is a matter you should raise with the Ministry of Justice.
Every person who acts as an insolvency practitioner must be authorised to do so: either directly by the Secretary of State or by one of a number of Recognised Professional Bodies. The existence of a proper complaints procedure was one of the factors taken into account when the bodies were initially recognised to authorise practitioners, it is open to any party who is dissatisfied with the professional conduct of an insolvency practitioner to raise their concerns with the practitioner’s authorising body. If a complaint is made, the authorising body will consider whether professional misconduct has occurred, and whether sanctions should be applied.
The fees chargeable to a bankruptcy estate are set by Parliament. The remuneration of a trustee is largely dependent on the amount of work to be done in properly administering the proceedings. In large and complex cases, the work necessary to fulfil the trustees duties will be considerably greater and expenses correspondingly higher. Under the provisions of the current insolvency legislation, it is for the creditors’ committee (a representative body of the creditors) or the creditors in general meeting to approve the basis and level of remuneration. If you wish more information on the appointment, functions, powers and payment of trustees in bankruptcy, I would refer you to The Service’s publication “Trustees and Liquidators in Bankruptcies and Compulsory Liquidations” which is available from our website www.insolvency.gov.uk. Additional guidance on the remuneration of insolvency office holders can be found in Statement of Insolvency Practice 9 which is available from the web-site of the Association of Business Recover Professionals www.r3.org.uk.
The Office of Fair Trading (OFT) has recently published a study into the corporate insolvency market. The study looked into the structure of the market and any features in the market which could result in harm, such as higher fees or lower recovery rates for certain groups of creditors. The study is available at the following link: http://www.oft.gov.uk/shared_oft/reports/Insolvency/oft1245. The Government intends to publish a response to the OFT study during October, which will be placed on The Insolvency Service website.
As I understand money laundering this is the exchange of money or assets obtained criminally for money or other assets that are ‘clean’. I can see nothing in the proper administration of a bankruptcy estate, where a trustee realises the assets of the bankrupt which the legislation states form the bankruptcy estate and distributes funds to creditors, which constitutes money laundering. I would ask you to refrain from implying that I am committing criminal offences without providing any evidence to support your accusations. Had I any evidence within my direct knowledge which indicated a criminal act I would report this appropriately.
However, if you hold any evidence of any criminal activity then this is a matter you should report to the Police. Alternatively you may wish to contact the UK Financial Intelligence Unit of the Serious Organised Crime Unit with a view to submitting a Suspicious Activity Report. Further details are available from the web-site www.soca.gov.uk