Insolvency proceedings are collective judicial proceedings on a debtor’s insolvency or impending insolvency. They are held to organise property rights in relations with persons affected by the debtor’s insolvency or impending insolvency and to ensure that creditors are satisfied to the highest degree possible and, as a matter of principle, on a pro rata basis. The secondary objective is to discharge the debtor’s debt.
Creditors register their claims and are typically satisfied pro rata from the realisation of the debtor’s assets (bankruptcy), by gradual repayment from the company’s operating income (reorganisation), or according to a monthly repayment schedule (debt relief). Bankruptcy proceedings may be initiated against anyone, whereas reorganisation focuses solely on businesses and debt relief is predominantly targeted at individuals, whether or not they engage in business.
Insolvency practitioners are a procedural executing entity in insolvency proceedings. They manage numerous agendas under those proceedings (in particular, reviews of creditors’ registered claims, the administration and realisation of the insolvency estate, the distribution of the proceeds of such realisation among secured and unsecured creditors, and compliance with obligations to report to the insolvency court and creditors). Insolvency practitioners are required to perform their duties conscientiously and with professional care. In doing so, they must prioritise the common interest of creditors over their own and others’ interests.
Opening of insolvency proceedings
Effects of insolvency proceedings
Insolvency
Methods for dealing with insolvency
Choosing a method for dealing with insolvency
Responsibility of a business’s statutory body
Insolvency practitioner
Debtor
Creditors
Annulment, unenforceability and invalidity of legal acts detrimental to creditors
Costs of insolvency proceedings
Closure of insolvency proceedings
Insolvency register