This Statement is a guide to some of the constraints on an insolvency practitioner to pass on information.
The different sources of information
As set out in Individual Account Statement IA004 and Corporate Account Statement CA003, insolvency office holders can obtain documents from a number of sources using various provisions in the Insolvency Act 1986 ("IA86"). The nature of the documents, how they were created, and the manner in which they were obtained, can affect the insolvency office-holder's rights to use those documents.
The insolvent entity's own information
If the office-holder collects the entity's books and records on appointment, he has a right to deal with that information in the same way as the person/company. He could therefore decide to release those documents to the world at large or keep them entirely confidential. This also means, however, that any duties of confidence that constrain the insolvent entity also apply to limit the office-holder's ability to use the information.
For instance, if the company had entered into a non-disclosure agreement with another business, then the office-holder will also be subject to the terms of that agreement. Similarly, if the bankrupt was a doctor, the trustee would still be bound by the duty of confidence to the patients and could not release their medical records to the public. To release documents subject to a duty of confidence the office-holder would need either the permission of the other party or an order of the court.
Information obtained without using the office-holder's powers
In most instances, if a third party freely gives information to the office-holder, he can use the information as he sees fit. In theory, this means he could release the information for spurious reasons, but the more cautious approach would only be to release the information if it furthers the interests of the estate.
However, an office-holder can voluntarily add a restriction that will bind him. So if, for instance, at the conclusion of a voluntary interview, the office-holder states that he will not release the transcript without the interviewee's permission, the transcript then becomes subject to that restriction.
Information obtained by the office-holder by using his powers
If the office-holder obtains documentation using his Insolvency Act powers, or the threat of such powers, there is an additional obligation to only use that information for the purpose for which it was obtained. This will usually mean using the information to increase realisations for the estate, but could also mean, for example, to assist the official receiver in his investigations. Careful consideration needs to be given if the potential recipient could also use the information in a manner contrary to the best interests of the estate; if in doubt a Court application should be made.
Section 236 & 366 IA86 interview transcripts
An office-holder cannot release a transcript of a 236/366 ordered interview, or a witness statement filed pursuant to a 236/366 order, without an order of the court (rule 9.5 of the Insolvency Rules 1986).
Legally privileged documents
An office-holder can release the insolvent entity's privilege in a document (but should only do so if it is in the best interests of the estate). However, neither the office-holder, nor the Court, can waive someone else's privilege (save in very limited circumstances).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.