As you will have gathered by now, these Blogs are about general principles, not the detailed requirements of any one rule, section, paragraph (or, in Northern Ireland, article). If you need to test your SA compliance for a particular case type, you need the legislative references and you could do worse than pay for an external review that would cover them. However, this posting shows some of the more commonly found errors.
A statement of affairs is, with apologies to all Grannies with a formal qualification in egg sucking, a balance sheet at a set date. All of the requirements say that it should be ‘made up to a date…’, so it is rather worrying that I so often find them to be undated.
The requirements as to signing, certifying and verifying SA’s vary between the appointment types, which may explain why they are so often included with no such signatures, statements or supporting documents. Maybe the decision was taken to ‘overlook’ the requirement rather than update checklists for each case type with the pertinent requirements. All too often, an IP will seek to blame the omission on the director or debtor, because ‘it is their statement of affairs’. This is a pretty feeble defence from anyone in such a highly paid and responsible profession and it looks really poor when the file evidence shows that the SA was prepared by the IP’s own staff and the debtor’s only involvement was to sign where the IP told him to.
A brief summary of the legislative requirements for an SA show that it consists not only of the front ‘balance sheet’ but also details of any security, the names and addresses of the creditors and, where applicable, shareholders. It is all too common, particularly in VA’s and administrations, to find the front sheet in one appendix, with the creditors listed in a later appendix, sometimes separated by half a ream of A4. It is even more common for the secured creditors only to feature on the front sheet, often not named and rarely with any details of their address or the date their security was granted. Where the debtor should have certified that the SA is true to the best of his knowledge information and belief, he has often just signed it and it is far from uncommon to find that where two directors or a director and the company director should have signed, only one signature appears.
I know that these details seem like relatively minor matters, but it is worth remembering that those who drafted the legislation went to considerable lengths to specify the requirements in detail. They did bother to alter the requirements for each case type if they felt that there was good reason to do so. You ignore such clear legislative requirements, however insignificant they seem in isolation, at your peril.
