New Zealand Law Society - Insolvency profession regulation needed: Chapman Tripp

Insolvency profession regulation needed: Chapman Tripp

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Law firm Chapman Tripp says a High Court finding that a liquidator fabricated a key document and failed to account for receipts of over half a million dollars highlights the need for regulation of the insolvency profession.

In a statement, Chapman Tripp says in McKay v Johnson [2016] NZHC 1691 the liquidator claimed to have sent a notice under section 305 of the Companies Act to the bank holding security over the company in liquidation. The Court was satisfied that the document had been fabricated.

"This case, which has involved a significant amount of litigation over time, shows the delay and cost that can be caused by liquidators who do not act with propriety," it says.

"Currently there is no 'fit and proper person' test for liquidators. No training, qualification, registration or licensing is required. New Zealand is unusual in that regard. It is a situation that ought to change."

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