Breach of statutory and IPA independence requirements

The IPA has finalised an investigation into the conduct of a Part X estate by a member which was ongoing after the debtor's husband joined the member's firm as a partner.

The IPA's Professional Conduct Committee ("PCC") determined that the member's conduct breached the statutory and IPA independence requirements, including the specific requirements of clause 2.3 of Schedule 4A – Performance Standards for Trustees of the Bankruptcy Regulations.

The PCC resolved that it would be appropriate for the member to take the following action in relation to the breach:

  • Repay the remuneration drawn for the period after the debtor's husband joined the member's firm.  As the estate had been finalised the amount repaid was distributed directly to creditors of the estate;
  • Notify ITSA of the nature and circumstances of the breach;
  • Notify creditors of the Part X estate of the nature and circumstances of the breach and that ITSA has also been notified of the breach.  The member was also required to provide a statement that any aggrieved creditor may make a submission to him, the IPA and/or ITSA in relation to the breach and provide appropriate contact details; and
  • Attend the IPA’s Independence workshop to reinforce his knowledge of independence practicalities and ongoing obligations.
On the basis that the member complied with all of the rectification recommendations made by the IPA, the PCC determined that the concern had been addressed and that it was not in the interests of the public, the member, the IPA or the insolvency profession that any penalty be applied.