IROP flashcards
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32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Insolvency
- The inability of a debtor to pay debts when due or the condition where liabilities exceed assets, triggering legal proceedings.
- Restructuring
- Reorganizing a company's debts and operations to restore financial health, often through negotiation or court-supervised plans.
- Liquidation
- The process of winding up a company, selling assets, and distributing proceeds to creditors according to statutory priority.
- Priority of claims
- The statutory order in which creditors are paid: secured creditors, administrative expenses, employees, tax authorities, unsecured creditors, shareholders.
- Automatic stay
- A legal injunction that temporarily halts lawsuits, foreclosures, and collection actions against the debtor once insolvency proceedings begin.
- Avoidance action
- A legal action to recover payments or transfers made by the debtor before insolvency that unfairly prefer certain creditors or defraud others.
- DIP financing
- Debtor-in-possession financing that gives priority to new lenders who fund the debtor's operations during reorganization.
- Cram-down
- Court approval of a reorganization plan despite dissenting creditor classes, provided the plan is fair and feasible.
- Best-interest test
- A requirement that each creditor receive under a plan at least as much as they would in a liquidation scenario.
- Proof of claim
- A formal document filed by a creditor to assert a claim against the debtor's estate in insolvency proceedings.
- Creditors' meeting
- A meeting held early in proceedings where creditors can question the practitioner and vote on key matters.
- Asset realization
- The process of converting the debtor's assets into cash, often through sale, for distribution to creditors.
- Interim distribution
- A payment made to creditors before the final distribution, typically requiring court approval and resolution of disputed claims.
- Progress report
- A periodic report filed by the insolvency practitioner detailing the status of the case, usually every 90 days.
- Conflict of interest
- A situation where the practitioner's personal or financial interests could impair their impartiality; must be disclosed and avoided.
- Valuation methods
- Techniques such as discounted cash flow, liquidation value, and market comparables used to determine asset or business worth.
- Notice to creditors
- Formal communication informing creditors of the insolvency proceedings, their rights, and deadlines for filing claims.
- Court sanction
- Judicial approval required for certain actions, such as selling assets outside ordinary course or compromising claims.
- UNCITRAL Model Law
- A framework for cross-border insolvency adopted by many countries to facilitate cooperation and recognition of foreign proceedings.
- Licensing requirement
- Insolvency practitioners must be licensed by a recognized body, which involves meeting education, experience, and exam criteria.
- Fiduciary duty
- A legal obligation to act in the best interests of creditors, with good faith, due care, and loyalty.
- Confidentiality
- The obligation to protect client information from unauthorized disclosure, unless required by law or court order.
- Anti-money laundering
- Regulations requiring professionals to conduct customer due diligence and report suspicious transactions to authorities.
- Data protection
- Laws governing the processing of personal data, such as GDPR, requiring lawful basis, security, and rights for individuals.
- Continuing education
- Ongoing professional development required to maintain certification, typically 20 hours per year including ethics.
- Exam eligibility
- Criteria candidates must meet to sit for the IROP exam, including experience, education, and good standing.
- Passing score
- The minimum score required to pass the IROP exam, which is 70% or higher.
- Retake policy
- Rules allowing unsuccessful candidates to retake the exam after 90 days, with a maximum of three attempts per year.
- Identification requirement
- Candidates must present a government-issued photo ID with a name matching their registration to be admitted to the exam.
- Rescheduling fee
- A charge applied when a candidate changes their exam date within 72 hours of the scheduled time.
- Domain weighting
- The percentage of exam questions allocated to each content domain, guiding study focus.
- Code of ethics
- Professional standards governing the conduct of insolvency practitioners, including integrity, objectivity, and confidentiality.