Practitioners should be aware that recent comment from a number of the insolvency judges at the Court of Session suggests that the Court is likely to be taking a more interventionist approach to a number of insolvency applications and, as a result, practitioners may wish to review the approach taken to these applications in administration and liquidation cases.
Until fairly recently many practitioners may have felt that the approach taken by the courts to procedural insolvency applications was little more than a rubber stamping exercise and, so long as the correct style had been followed many applications were approved at the court clerk level. It may have been felt that there was little judicial oversight and the requirement to appear and to address the court in support of any such applications was a relatively unusual occurrence. There is little doubt that since the downturn there has been an increased focus on the insolvency related applications being presented to the Court. As practitioners will be well aware, many of those applications are procedural in nature and concern such issues as :
- Dispensing with the requirement to lodge accounts in line with the accounting periods
- Extensions of accounting periods
- Approval of remuneration
- Extensions of administration appointments
- Dispensing with the prescribed part
- Early dissolution
We are aware that a number of applications are presently pending before the Court of Session and we are expecting the Court to issue guidance in the relatively near future. We will update practitioners once the decisions and guidance are issued but it is clear that the Court is taking its supervisory role in insolvency more seriously than it has in the past.
If practitioners have any pending or proposed applications they may wish to consider how those applications might be viewed by the Court in light of the recent comments and observations from the bench