Wrongdoing by Directors and Others

Both outright dishonesty and genuine misfortune are less common than is sometimes supposed; most insolvencies result from a degree of culpable mismanagement. Although the work of office-holders appointed in insolvency proceedings is primarily concerned with the administration of the insolvent estate, examination of the causes of insolvency and the punishment of malpractice are also important. Accordingly, insolvency law includes various provisions by means of which malpractice can be pursued. It is a statement of the obvious that failure to take proper action in respect of malpractice encourages degeneration in attitudes to debt. The treatment of malpractice is therefore central to the wider social and economic purposes of insolvency law.