Made | 29th October 2002 | ||
Laid before Parliament | 29th October 2002 | ||
Coming into force | 1st January 2003 |
Amendments to Parts 1 and 7 of the principal Rules
4.
- (1) Subject to paragraph (2), Parts 1 and 7 of the principal Rules have effect subject to the amendments set out respectively in Parts 1 and 2 of the Schedule to these Rules.
(2) The amendments to Parts 1 and 7 of the principal Rules set out respectively in Parts 1 and 2 of the Schedule to these Rules do not apply in relation to a voluntary arrangement under Part I of the Act where -
and Parts 1 and 7 of the principal Rules without the amendments made in Parts 1 and 2 of the Schedule to these Rules shall continue to apply in such cases.
Amendment to Schedule 4 to the principal Rules
5.
In Schedule 4 to the principal Rules the entry relating to Rule 1.24 is deleted.
Amendments to Schedule 5 to the principal Rules
6.
- (1) Subject to paragraph (2), in Schedule 5 to the principal Rules, for Forms 1.1 (Scot) to 1.4 (Scot) there are substituted Forms 1.1 (Scot) to 1.19 (Scot) as set out in Part 3 of the Schedule to these Rules.
(2) Forms 1.1 (Scot) to 1.19 (Scot) are for use in relation to any voluntary arrangement under Part I of the Act other than any of the cases mentioned in paragraph (2) of Rule 4 to these Rules and in those cases Forms 1.1 (Scot) to 1.4 (Scot) in Schedule 5 to the principal Rules, instead of those substituted by Part 3 of the Schedule to these Rules, shall continue to be used.
Melanie Johnson,
Parliamentary Under-Secretary of State for Competition, Consumers and Markets, Department of Trade and Industry
29th October 2002
(b) in paragraph (2) for sub-paragraphs (c) and (d) there is substituted -
(c) after paragraph (3) there is inserted -
Amendments to Rule 1.3
2.
In Rule 1.3 -
(b) for sub-paragraph (o) of paragraph (2) there is substituted -
Amendment to Rule 1.7
3.
In paragraph (2) of Rule 1.7 after the words "his opinion" where they first appear there is inserted "that the directors' proposal has a reasonable prospect of being approved and implemented and".
Substitution of Rule 1.8
4.
For Rule 1.8 there is substituted -
(3) No appointment of a replacement nominee shall be made by the court unless there is lodged in court a statement by the replacement nominee -
Amendment to Rule 1.14
5.
For paragraph (2) of Rule 1.14 there is substituted -
New Rule 1.14A
6.
After Rule 1.14 insert -
New Rules 1.15A and 1.15B
7.
After Rule 1.15 there is inserted -
Substitution of Rule 1.16
8.
For Rule 1.16 there is substituted -
Amendment to Rule 1.17
9.
In Rule 1.17 -
(b) in paragraph (5) for the words "If the voluntary arrangement has been approved by the meetings" there is substituted "If the decision approving the voluntary arrangement has effect under section 4A".
Amendments to Rule 1.18
10.
In Rule 1.18 -
"or is an authorised person in relation to the company".
New Rule 1.18A
11.
After Rule 1.18 there is inserted -
(3) Service on the directors may be effected by service of a single copy on the company at its registered office.
(4) The directors or (as the case may be) the supervisor shall forthwith after receiving a copy of the court's order, give notice of it to all persons who were sent notice of the creditors' or company meetings or who, not having been sent such notice, are affected by the order.
(5) The person on whose application the order of the court was made shall, within 7 days of the order, deliver a certified copy interlocutor to the registrar of companies.".
Amendment to Rule 1.19
12.
In paragraph (1) of Rule 1.19 for the words "After the approval of the voluntary arrangement - " there is substituted "Where the decision approving the voluntary arrangement has effect under section 4A - ".
Amendment to Rule 1.22
13.
In sub-paragraph (a) of Rule 1.22 for the words "approval of the arrangement" there is substituted "decision approving the arrangement taking effect under section 4A".
Substitution of Rule 1.23
14.
For Rule 1.23 there is substituted -
(3) The supervisor shall, within the 28 days mentioned above, send to the registrar of companies and to the court a copy of the notice to creditors and members under paragraph (1), together with a copy of the report under paragraph (2), and the supervisor shall not vacate office until after such copies have been sent.".
Omission of rule 1.24
15.
Rule 1.24 is omitted.
New Chapter 7
16.
After Rule 1.24 the following provisions[8] are inserted -
(2) With the agreement in writing of the nominee, the directors may amend the proposal at any time before submission to them by the nominee of the statement required by paragraph 6(2) of Schedule A1 to the Act.
Delivery of documents to the intended nominee etc.
1.26.
- (1) The documents required to be delivered to the nominee pursuant to paragraph 6(1) of Schedule A1 to the Act shall be delivered to the nominee himself or to a person authorised to take delivery of documents on his behalf.
(2) On receipt of the documents, the nominee shall forthwith issue an acknowledgement of receipt of the documents to the directors which shall indicate the date on which the documents were received.
Statement of affairs
1.27.
-
(1) The statement of the company's affairs required to be delivered to the nominee pursuant to paragraph 6(1)(b) of Schedule A1 to the Act shall be delivered to the nominee no later than 7 days after the delivery to him of the document setting out the terms of the proposed voluntary arrangement or such longer time as he may allow.
(2) The statement of affairs shall comprise the same particulars as required by Rule 1.5(2) (supplementing or amplifying, so far as is necessary for clarifying the state of the company's affairs, those already given in the directors' proposal).
(3) The statement of affairs shall be made up to a date not earlier than 2 weeks before the date of the delivery of the document containing the proposal for the voluntary arrangement to the nominee under Rule 1.26(1).
However, the nominee may allow an extension of that period to the nearest practicable date (not earlier than 2 months before the date of delivery of the documents referred to in Rule 1.26(1)) and if he does so, he shall give a statement of his reasons in writing to the directors.
(4) The statement of affairs shall be certified as correct, to the best of their knowledge and belief, by two or more directors of the company, or by the company secretary and at least one director (other than the secretary himself).
The nominee's statement
1.28.
-
(1) The nominee shall submit to the directors the statement required by paragraph 6(2) of Schedule A1 to the Act within 28 days of the submission to him of the document setting out the terms of the proposed voluntary arrangement.
(2) The statement shall have annexed to it -
Documents submitted to the court to obtain moratorium
1.29.
-
(1) Where pursuant to paragraph 7 of Schedule A1 to the Act the directors lodge the document and statements referred to in that paragraph in court those documents shall be delivered together with 4 copies of a schedule listing them within 3 working days of the date of the submission to them of the nominee's statement under paragraph 6(2) of Schedule A1 to the Act.
(2) When the directors lodge the document and statements referred to in paragraph (1), they shall also lodge -
(3) The copies of the schedule shall be endorsed by the court with the date on which the documents were lodged in court and 3 copies of the schedule certified by the court shall be returned by the court to the person who lodged the documents in court.
(4) The statement of affairs required to be lodged under paragraph 7(1)(b) of Schedule A1 to the Act shall comprise the same particulars as required by Rule 1.5(2).
Notice and advertisement of beginning of a moratorium
1.30.
- (1) After receiving the copies of the schedule endorsed by the court under Rule 1.29(3), the directors shall forthwith serve two of them on the nominee and one on the company.
(2) Forthwith after receiving the copies of the schedule pursuant to paragraph (1) the nominee shall advertise the coming into force of the moratorium once in the Edinburgh Gazette, and once in such newspaper as he thinks most appropriate for ensuring that its coming into force comes to the notice of the company's creditors.
(3) The nominee shall forthwith notify the registrar of companies, the keeper of the register of inhibitions and adjudications, the company and any petitioning creditor of the company of whose claim he is aware of the coming into force of the moratorium and such notification shall specify the date on which the moratorium came into force.
(4) The nominee shall give notice of the coming into force of the moratorium specifying the date on which it came into force to any messenger-at-arms or sheriff officer who, to his knowledge, is instructed to execute diligence or other legal process against the company or its property.
Notice of extension of moratorium
1.31.
-
(1) The nominee shall forthwith notify the registrar of companies, the keeper of the register of inhibitions and adjudications and the court of a decision taking effect pursuant to paragraph 36 of Schedule A1 to the Act to extend or further extend the moratorium and such notice shall specify the new expiry date of the moratorium.
(2) Where an order is made by the court extending or further extending or renewing or continuing a moratorium, the nominee shall forthwith after receiving a copy of the same give notice to the registrar of companies and the keeper of the register of inhibitions and adjudications and together with the notice shall send a certified copy interlocutor to the registrar of companies.
Notice and advertisement of end of moratorium
1.32.
-
(1) After the moratorium comes to an end, the nominee shall forthwith advertise its coming to an end once in the Edinburgh Gazette, and once in such newspaper as he thinks most appropriate for ensuring that its coming to an end comes to the notice of the company's creditors, and such notice shall specify the date on which the moratorium came to an end.
(2) The nominee shall forthwith give notice of the ending of the moratorium to the registrar of companies, the court, the keeper of the register of inhibitions and adjudications, the company and any creditor of the company of whose claim he is aware and such notice shall specify the date on which the moratorium came to an end.
Inspection of court file
1.33.
Any director, member or creditor of the company is entitled, at all reasonable times on any business day, to inspect the court file.
Replacement of nominee by the court
1.36.
- (1) Where the directors intend to make an application to the court under paragraph 28 of Schedule A1 to the Act for the nominee to be replaced, they shall give to the nominee at least 7 days' notice of their application.
(2) Where the nominee intends to make an application to the court under that paragraph to be replaced, he shall give to the directors at least 7 days' notice of his application.
(3) No appointment of a replacement nominee shall be made by the court unless there is lodged in court a statement by the replacement nominee indicating his consent to act.
[FORM 1.18]
[FORM 1.19(Scot)]
Notification of appointment of a replacement nominee
1.37.
Where a person is appointed as a replacement nominee he shall forthwith give notice of his appointment to -
Applications to court under paragraph 26 or 27 of Schedule A1 to the Act
1.38.
Where any person intends to make an application to the court pursuant to paragraph 26 or 27 of Schedule A1 to the Act, he shall give to the nominee at least 7 days' notice of his application.
Entitlement to vote (creditors)
1.41.
- (1) Subject as follows, every creditor who has notice of the creditors' meeting is entitled to vote at the meeting or any adjournment of it.
(2) Votes are calculated according to the amount of the creditor's debt as at the beginning of the moratorium, after deducting any amounts paid in respect of that debt after that date.
(3) A creditor may vote in respect of a debt for an unliquidated amount or any debt whose value is not ascertained and for the purposes of voting (but not otherwise) his debt shall be valued at £1 unless the chairman agrees to put a higher value on it.
Procedure for admission of creditors claims for voting purposes
1.42.
- (1) Subject as follows, at any creditors' meeting the chairman shall ascertain the entitlement of persons wishing to vote and shall admit or reject their claims accordingly.
(2) The chairman may admit or reject a claim in whole or in part.
(3) The chairman's decision on any matter under this Rule or under paragraph (3) of Rule 1.41 is subject to appeal to the court by any creditor or member of the company.
(4) If the chairman is in doubt whether a claim should be admitted or rejected, he shall mark it as objected to and allow votes to be cast in respect of it, subject to such votes being subsequently declared invalid if the objection to the claim is sustained.
(5) If on an appeal the chairman's decision is reversed or varied, or votes are declared invalid, the court may order another meeting to be summoned, or make such order as it thinks just.
The court's power to make an order under this paragraph is exercisable only if it considers that the circumstances giving rise to the appeal give rise to unfair prejudice or material irregularity.
(6) An application to the court by way of appeal against the chairman's decision shall not be made after the end of the period of 28 days beginning with the first day on which the report required by paragraph 30(3) of Schedule A1 to the Act has been made to the court.
(7) The chairman is not personally liable for any expenses incurred by any person in respect of an appeal under this Rule.
Requisite majorities (creditors)
1.43.
- (1) Subject as follows, at the creditors' meeting for any resolution to pass approving any proposal or modification there must be a majority in excess of three-quarters in value of the creditors present in person or by proxy and voting on the resolution.
(2) The same applies in respect of any other resolution proposed at the meeting, but substituting one-half for three-quarters.
(3) At a meeting of the creditors for any resolution to pass extending (or further extending) a moratorium, or to bring a moratorium to an end before the end of the period of any extension, there must be a majority in excess of three-quarters in value of the creditors present in person or by proxy and voting on the resolution. For this purpose a secured creditor is entitled to vote in respect of the amount of his claim without deducting the value of his security.
Proceedings to obtain agreement on the proposal
1.44.
- (1) If the chairman thinks fit, the creditors' meeting and the company meeting may be held together.
(2) The chairman may, and shall if it is so resolved at the meeting in question, adjourn that meeting, but any adjournment shall not be to a day which is more than 14 days after the date on which the moratorium (including any extension) ends.
(3) If the meetings are adjourned under paragraph (2), notice of the fact shall be given by the nominee forthwith to the court.
(4) If following the final adjournment of the creditors' meeting the proposal (with or without modifications) has not been approved by the creditors, it is deemed rejected.
Implementation of the arrangement
1.45.
-
(1) Where a decision approving the arrangement has effect under paragraph 36 of Schedule A1 to the Act, the directors shall forthwith do all that is required for putting the supervisor into possession of the assets included in the arrangement.
(2) Subject to paragraph (3), Rules 1.17, 1.18, 1.18A and 1.20 to 1.23 apply.
(3) The provisions referred to in paragraph (2) are modified as follows -
Part 2 of the Schedule makes a consequential amendment to Part 7 of the principal Rules.
Part 3 of the Schedule makes a number of amendments to Schedule 5 to the principal Rules which sets out the forms for use in connection with insolvency proceedings. Amendments are made to the forms for use in connection with company voluntary arrangements.
The costs to business of the commencement of the provisions of the Insolvency Act 2000 are determined in the Regulatory Impact Assessment prepared for that Act. Copies of the assessment are available from Policy Unit, the Insolvency Service, 21 Bloomsbury Street, London WC1B 3QW.
[2] S.I. 1986/1915: amended by S.I. 1987/1921.back
[3] Section 389A was inserted into the Insolvency Act 1986 (c. 45) by section 4(4) of the Insolvency Act 2000 (c. 39).back
[4] Schedule A1 is inserted into the Insolvency Act 1986 (c. 45) by section 1 of, and Schedule 1 to, the Insolvency Act 2000 (c. 39).back
[5] Section 5(2)(b) of the Act was amended by section 2 of, and paragraph 6(c) of Schedule 2 to, the Insolvency Act 2000.back
[6] Section 2(4) was amended by section 2 of, and paragraph 3(b) of Schedule 2 to, the Insolvency Act 2000.back
[7] Section 4A was inserted into the Insolvency Act 1986 by section 2 of, and paragraph 5 of Schedule 2 to, the Insolvency Act 2000.back
[8] The provisions inserted into the Rules by paragraph 16 are to give effect to the provisions of Schedule A1 to the Insolvency Act 1986 which was inserted into the Insolvency Act 1986 by section 1 of, and paragraph 4 of Schedule 1 to, the Insolvency Act 2000. Schedule A1 is amended by S.I. 2002/1990.back