Representing Creditors in Insolvency Proceedings in England and Wales

When a company or individual becomes insolvent, creditors must act promptly to protect their position and maximise the prospects of recovering the amounts owed to them. Insolvency proceedings involve strict procedural requirements and deadlines, and creditors may need to take active steps to ensure that their claims are properly recognised. 

Our London office can represent both domestic and international creditors in insolvency proceedings that take place within the jurisdiction of England and Wales. Therefore, we regularly assist UK creditors as well as creditors based overseas, including in Germany and Hungary, with navigating the English insolvency framework and communicating with insolvency practitioners, debtors and the courts. 

The legal and regulatory framework 

Corporate and personal insolvency proceedings in England and Wales are primarily governed by the Insolvency Act 1986 and the Insolvency (England and Wales) Rules 2016. The appropriate course of action depends on the type of insolvency procedure involved.  

These may include: 

• administration; 

• compulsory or voluntary liquidation; 

• company voluntary arrangements; 

• restructuring plans; 

• standalone moratoriums; 

• receivership; 

• bankruptcy; and 

• individual voluntary arrangements.

A creditor’s rights and expected recovery may depend on whether its claim is secured, preferential, unsecured or subordinated. The existence and validity of security, guarantees, retention-of-title rights or other contractual protections can significantly affect the creditor’s position. 

In most formal insolvency proceedings, unsecured creditors must submit details of their claims to the appointed insolvency practitioner. This is commonly done through a proof of debt supported by appropriate evidence. A claim may be rejected in whole or in part if it is insufficiently documented, incorrectly calculated or legally disputed. 

The creditor representation process 

Our involvement will usually begin with an assessment of the debt and the debtor’s insolvency status. We review the underlying agreements, invoices, correspondence, judgments, guarantees and security documents to establish the nature and value of the claim. 

Depending on the circumstances, the process may include: 

• Identifying the relevant insolvency procedure and the appointed office-holder; 

• Assessing the creditor’s status, including whether the claim is secured, preferential, unsecured, contingent or disputed; 

• Calculating and documenting the claim, including any recoverable contractual interest and costs; 

• Preparing and submitting a proof of debt within the applicable time limits; 

• Communicating with the insolvency practitioner and responding to requests for further information; 

• Reviewing proposals and reports issued to creditors; 

• Advising on voting rights and representing the creditor in decisions or meetings; 

• Challenging the rejection or reduction of a claim, where appropriate; and 

• Considering further recovery options, including claims against guarantors or other liable parties. 

We can also advise creditors where there are concerns regarding transactions entered into before the insolvency, the conduct of directors, the treatment of particular creditors or the actions of an insolvency office-holder. 

Assistance for foreign creditors 

A creditor does not generally lose its ability to participate in English insolvency proceedings merely because it is incorporated, resident or based outside the United Kingdom. However, foreign creditors may encounter practical and legal difficulties when submitting and substantiating their claims. 

These may include differences between the governing law of the underlying contract and the law governing the insolvency proceedings, foreign-language documentation, currency conversion, cross-border security arrangements and parallel proceedings in another jurisdiction. 

Following the United Kingdom’s departure from the European Union, the recognition and coordination of insolvency proceedings between the UK and EU Member States may also require case-specific analysis. This is particularly relevant where the debtor has assets, creditors or business activities in Germany, Hungary or elsewhere in the European Union. 

We can act as the creditor’s point of contact in England and Wales, prepare the required submissions, communicate with the insolvency practitioner and coordinate with the creditor’s existing legal and financial advisers. Where documents are in another language, our multilingual capabilities can reduce the need for repeated explanations and facilitate an efficient review of the supporting materials. 

How we can assist 

We represent companies, financial stakeholders, investors, directors acting as creditors and individual creditors throughout the insolvency process. Our objective is to ensure that the creditor’s claim is properly presented, its procedural rights are protected, and all commercially realistic recovery options are considered. 

Our multilingual team can provide assistance in English, Hungarian, German, Spanish, Russian and Turkish. This enables us to combine local knowledge of the insolvency framework in England and Wales with a clear understanding of the commercial and legal issues faced by international creditors. 

By obtaining advice at an early stage, creditors can avoid missed deadlines, preserve important rights and approach the insolvency process with a clear and coordinated strategy.