Require Immediate Support? Free Director Helpline: 0800 644 6080

Real Business Rescue

Free Director Helpline: 0800 644 6080

Can I change my insolvency practitioner?

Updated:

How to remove a licensed insolvency practitioner

Changing or removing a licensed insolvency practitioner from office can be a complex process and in some cases it may not even be possible.

If you are looking to switch or remove your company’s insolvency practitioner, it is important to understand what part of the voluntary liquidation or administration process you are currently at and what reasons you have for wanting to change. This will determine what options you have and what can be done.

Can an insolvency practitioner be replaced if the liquidation or administration process has not yet started?

If you have not signed a letter of engagement and you are unhappy or feel unsure about the service or advice you are receiving prior to officially appointing an insolvency practitioner to manage the liquidation or administration of your company, then you are advised to trust your judgement and begin looking for an alternative before you signing anything committing you to going ahead.

If your involvement with the insolvency practitioner has not gone beyond discussions – whether these have taken place in person or over the phone – and you have not yet signed anything to formally appoint them, then it is very easy for you to simply walk away and engage a different insolvency practitioner to facilitate the liquidation or administration of your company for you.

Can I change insolvency practitioner if the liquidation or administration process has started?

So what happens if you have signed a letter of engagement and the insolvency procedure has already begun?

The reality is that it is not easy to switch an appointed insolvency practitioner midway through a liquidation or administration process particularly if you are the director of the company concerned.

There are three ways for an insolvency practitioner to be removed from office once the insolvency process has started:

  • Decision ProcedureThe company’s creditors can request a decision procedure to be held whereby a vote will be taken to decide whether the appointed insolvency practitioner should be removed and replaced with another; at least 25% (by value) of creditors must vote in favour of the insolvency practitioner being removed before this can take place. Crucially, this 25% must be made up of creditors unconnected to the insolvent company; this means directors and shareholders are unable to oust an insolvency practitioner using this method.
  • Application to court – As a director or shareholder of the limited company, you have the option to apply to the courts to remove an insolvency practitioner from office. This can be a costly process and you must have a good reason to ask the courts to take this action. The onus will be on you as the petitioner to provide suitable reasoning and evidence to support your application.

It is not enough to simply state that you are not satisfied with the job the insolvency practitioner has done; you must back this up with robust evidence which demonstrates misconduct or improper behaviour. The reality is that many applications to court to remove or replace an insolvency practitioner fail due to insufficient evidence.

Some directors are keen to switch their appointed insolvency practitioner after they discover that they are being chased for outstanding overdrawn directors loans that they were not warned about prior to signing up. This type of change is unfortunately not possible and serves to highlight the importance of doing your due diligence to ensure you are working with a reputable insolvency practitioner before signing a letter of engagement.

  • Ask the insolvency practitioner to leave – It sounds simple, but you always have the option to ask your appointed insolvency practitioner if they would be open to you removing them from office and replacing them with an alternative. Depending on the case, the insolvency practitioner may be amenable to voluntarily being removed which would allow you to switch to a different IP of your choosing.

How to complain about an insolvency practitioner

If you are unhappy with the conduct of a licensed insolvency practitioner regarding their professional work, you are within your rights to submit a formal complaint as the director or shareholder of the company who has engaged their services. Be aware that making a compliant, regardless of the outcome, will not necessarily result in you being able to switch the appointed insolvency practitioner or see the actions of the insolvency practitioner being undone.

You should make your complaint directly to the insolvency practitioner in the first instance. You can do this either by phone or in writing; if you choose to complain over the phone, be sure to put your complaint in writing afterwards too and keep a copy as proof of your complaint.

If you remain unhappy, you can make a follow up complaint to the Insolvency Service via the government’s Complaint Gateway. They will then refer this matter to the insolvency practitioner’s governing body who will make an assessment of your complaint.

Be aware that you are only able to make a complaint on the basis that the insolvency practitioner has acted in an unprofessional, unethical, or improper way, not simply because you are unhappy with the outcome of the insolvency procedure as a whole.

How Real Business Rescue can help

Real Business Rescue cannot help you remove an appointed insolvency practitioner from an ongoing liquidation or administration. If you have not already formally appointed an insolvency practitioner to handle the liquidation or administration of your company, however, our nationwide team of insolvency practitioners are here to provide immediate help and advice to directors of distressed companies. Call our expert team today on 0808 253 5217.

Share:
Contact the RBR Team Today

Here at Real Business Rescue we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry. We will not use your information for marketing purposes. See PRIVACY POLICY
10,000+ Tests Completed

Free 60 Second Test

For Ltd Company Directors

What are you looking to do?
Choose below:

Real Business Rescue Recommended
  • UK's leading business funders
  • Free Brokerage Service
  • Full Market Access
  • Over 30 years' experience
  • Strong relationships with HMRC
  • Support from start to finish
  • 10,000 potential buyers
  • 12,000+ Businesses Sold
  • 60+ Years Experience
Next Steps

We provide free confidential advice with absolutely no obligation.
Our expert and non-judgemental team are ready to assist directors and stakeholders today.