Debtor insolvency petition: documents directors need for the court

Section 66 IO generally requires inability to pay for the opening of insolvency proceedings. Cessation of payments is a particular indicator. Paying some creditors in full or in part does not by itself establish solvency, so an isolated account balance is not sufficient.

For legal persons and certain partnerships, overindebtedness can also be an opening ground under section 67 IO. Liquidity status, going concern assumptions and the overindebtedness analysis answer different questions and should not be merged into one figure.

The directors and shareholders in crisis topic hub places corporate duties, shareholder funding and liability risks in context.

Once an opening ground exists, section 69(2) IO requires filing without culpable delay. The 60 days set the outer limit. They do not create a free restructuring phase in which directors may wait without continuous review.

Careful preparation of reorganisation proceedings with debtor in possession can be relevant to whether a delay is culpable. It requires concrete and documented progress. The article on the reorganisation administrator and debtor in possession explains authority after proceedings are opened.

The 120-day rule in section 69(2a) IO applies only where inability to pay was caused by a listed natural disaster or a comparable catastrophe. It is not a general crisis extension and requires a specific examination of cause and statutory conditions.

The statement must list individual assets and liabilities with amounts or values. For claims and liabilities, it must identify the relevant person, address, legal basis, due date and security. The expected recoverability of receivables must also be stated.

Disputed claims and liabilities must be marked. For a liability carrying a right to separate satisfaction, the estimated shortfall must be recorded. Relationships with close relatives, employees and persons linked through a company or other community relationship require the disclosures specified by section 100a IO.

An exported trial balance can be a starting point but does not replace these details. The insolvency estate glossary entry explains the asset framework. The petition needs a concrete and reviewable inventory.

Section 71 IO generally requires assets sufficient to cover the initial costs of proceedings. The assets need not be immediately realisable or capable of realisation without effort, but their existence and realistic value should be traceable.

At the examination, the debtor must present and sign an asset statement before the court. Potential avoidance claims must also be disclosed. For legal persons, section 72 IO adds rules concerning an advance for costs by office holders or assets held by those office holders.

Directors should therefore record cash, realisable items, receivables, rights, security and potential avoidance matters separately. Blanket book values without a realisation context provide limited assistance for this inquiry.

Under section 69(3) IO, the filing duty applies to governing representatives of legal persons. Where several directors exist, the file should show who has authority, who signs the petition and whether other persons subject to the duty agree or hold a different assessment.

Territorial jurisdiction may require more than the registered office viewed in isolation. Register details, central management, operating addresses and actual business activity should be consistent. The court must explain the basis for its territorial jurisdiction in the opening order.

Bankruptcy and reorganisation proceedings have different objectives and filing materials. The reorganisation and restructuring hub separates out-of-court preparation, restructuring and insolvency reorganisation routes.