Partnership Voluntary Arrangement Proposals - The law, content & benefits
Insolvent Partnerships Order 1994 - Statutory Instrument 1994/2421
If you are a partner in an insolvent partnership you will find the law that you need to refer to is set out in the Insolvent Partnerships Order 1994. Paragraph 4 of the Insolvent Partnership Order introduces the concept of a voluntary arrangement for the partnership entity. While there are only 20 paragraphs to the Order there are page after page of detailed rules in the Schedules to the Order. Those detailed rules also import certain law and rules originally written as relating to limited companies as set out in The Insolvency Act 1986.
In the proposal, the partners must explain why they think that the proposal will be effective and how it will be beneficial to creditors if they were to participate in such an arrangement. It would also need to contain the following: -
Details of the partnership assets to be included and excluded
- Any other assets that are to be included
- Details of partnership liabilities
- How each category of creditor is to be dealt with and dates for distributions
- Proposed duration
- Details of any guarantees given by the partnership or individual partners
- How the business is to be conducted during the arrangement
- How distributions and collections will be dealt with
- Amount of Nominees fees
- Supervisors functions
- Details of the Supervisor
- And many other matters
The law does not prescribe what level of offer should be made to creditors in the Partnership Voluntary Arrangement (PVA) proposal. The law does however prescribe what information must be contained in the Partnership Voluntary Arrangement proposal document.
If your partnership cannot pay its debts and you wish to take advantage of the Insolvent Partnership Order and obtain a freeze on enforcement actions being taken by partnership creditors and wish to consider proposing a Partnership Voluntary Arrangement then please email us for advice or a FREE INITIAL MEETING. At such a meeting we can discuss the law, how you get the law to work for your firm and the benefits that you can personally obtain from the Partnership Voluntary Arrangement process.