Restructuring, Turnaround and Insolvency Specialists

Part X (Personal Insolvency Arrangement)

Case Study 1 – The Doctor

A prominent medical practitioner had an accumulation of debt from unsuccessful legal actions over a period of many years.

The debtor was unable to pay or come to an arrangement with all of his creditors privately.  A Part X Arrangement (now Personal Insolvency Arrangement) was undertaken to present the formal options to creditors.  A Deed of Arrangement put forward by the debtor and was agreed to by creditors.  This Deed of Arrangement allowed the debtor to continue his professional qualifications and also to act as a director of corporate entities to earn income with which to repay creditors.

It was likely that in a bankruptcy scenario there would have most likely been no return to the creditors in this estate.

The Deed of Arrangement (now Personal Insolvency Arrangement) proposed by the debtor provided a return of 100 cents in the dollar to priority creditors (employee entitlements) and a return of 3.2 cents in the dollar to the ordinary unsecured creditors.  Both of these returns would most likely not have been available in a bankruptcy scenario.

 

Liability limited by a scheme approved under Professional Standards Legislation