Section 1. General Introduction to Insolvency Law.
(i) Evolution, objectives and principles.
A survey of the development of insolvency law, and its evolving objectives as reflected in case decisions and statutory provisions. The historic divergence between personal and corporate insolvency law: contrasts and consequences. Convergence in recent times: the major legislative reforms of 1986, 2000 and 2002. The present day regulation of the law and its administration.
(ii) Insolvency as a fact and as a legal concept.
Definitions of “insolvency”. Different tests applied to establish insolvency in various contexts. The meaning and relevance of "inability to pay debts".
(iii) Some fundamental principles: the principle of collectivity; the effect of bankruptcy and winding up on real and personal rights; the principle of pari passu distribution.
Section 2. The two forms of liquidation; from commencement to the liquidator’s appointment.
(i) Voluntary liquidation: principal features; advantages, uses and abuses; the nature and purpose of the 1986 reforms.
(ii) Compulsory Liquidation (Winding Up by the Court): principal features; grounds for petition; the winding up order and its consequences.
(iii) Liquidators: their status, duties and powers. Mode of appointment.
Section 3. The assets comprising the estate: their extent, administration and distribution.
(i) Defining and consolidating the estate available for creditors.
(ii) Security and quasi-security interests and their characterisation: the
impact of insolvency on such interests. Fixed and floating charges.
Registered and unregistered security interests; trust devices;
reservation of title.
(iii) Augmentation of the assets through avoidance of antecedent transactions: preferences; transactions at undervalue; floating charges given by insolvent companies; transactions defrauding creditors. Disclaimer of onerous property.
(iv) Proof of debts. Sequence of distribution of assets. Liquidation expenses. Preferential creditors. Secured and unsecured creditors. “Prescribed part” for unsecured creditors. Rights of set-off.
(v) The conclusion of the liquidation: dissolution of the company and discharge of the liquidator. Possibilities of a corporate “after-life”: resurrection and reburial.
Section 4. Improper trading and the duties of directors to creditors.
Fraudulent trading and wrongful trading. Misfeasance and breach of duty by directors and office holders. Phoenix operations and the counter-measures currently in place. Disqualification of directors and other penalties and sanctions. The investigative process; the human rights dimension. The role of the Insolvency Practitioner in operating the new legal regime.