A Private Examination can be a daunting process. A Liquidator has a power to apply to the court to conduct a Private Examination. See here s.236 Insolvency Act 1986.
Upon the insolvency of a company an office-holder, such as Liquidator, may make an application to court, to summon before it any officer or any person known or suspected to have in his possession any property or who may be able to provide information concerning the promotion, formation or business dealings and affairs and property of the company.
The person who is summonsed may be required to provide an affidavit to account for his/her dealings with the company.
A Private Examination will be conducted in front of a Judge and will be taken under oath.
There are a list of do’s and don’ts if you are subject to a Private Examination process –
* Engage a solicitor at the earliest possible opportunity specialising in insolvency litigation
* Correspond with the Liquidator early
* Put the Liquidator on the back foot – what is he really trying to uncover and what are his real motives?
* Can you show that the Liquidator has decided to pursue litigation and that this is a fishing expedition?
* Consider whether your indebtedness to the insolvent company can be best be resolved outside of the Private Examination process
* Put your head in the sand
* Avoid answering questions to the fullest possible extent – a Court will not make an order to conduct a Private Examination where the questions have already been answered
* Leave any question of indebtedness to the company to the Private Examination summary process
For assistance in the area of Private Examination please email or telephone 07460 005 769.
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