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The Insolvency (Scotland) (Receivership and Winding up) Rules 2018

Type Scottish-Statutory-Instrument

Publication 2018-11-13

Last updated 2021-10-01

State In force

Jurisdiction Scotland

Department King's Printer for Scotland

Source legislation.gov.uk

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(3) Where the chair continues the meeting, the meeting is valid unless—

(a) the chair decides in consequence of a complaint under rule 8.46 to declare the meeting void and hold the meeting again; or

(b) the court directs otherwise.

(4) Without prejudice to paragraph (2), where the chair becomes aware during the course of the meeting that there is an excluded person, the chair may, in the chair’s discretion and without an adjournment, declare the meeting suspended for any period up to 1 hour.

Indication to excluded person

8.45

(1) A person who claims to be an excluded person may request an indication of what occurred during the period of that person’s claimed exclusion.

(2) A request under paragraph (1) must be made in accordance with paragraph (3) as soon as reasonably practicable, and in any event, not later than 4pm on the business day following the day on which the exclusion is claimed to have occurred.

(3) A request under paragraph (1) must be made to—

(a) the chair where it is made during the course of the meeting; or

(b) the convener where it is made after the meeting.

(4) Where satisfied that the person making the request is an excluded person, the person to whom the request is made under paragraph (3) must deliver the requested indication to the excluded person as soon as reasonably practicable, and in any event, not later than 4pm on the business day following the day on which the request was made under paragraph (1).

Complaint

8.46

(1) A person may make a complaint who—

(a) is, or claims to be, an excluded person; or

(b) attends the meeting and claims to have been adversely affected by the actual, apparent or claimed exclusion of another person.

(2) The complaint under paragraph (1) must be made to the appropriate person who is—

(a) the chair, where the complaint is made during the course of the meeting; or

(b) the convener, where it is made after the meeting.

(3) The complaint must be made as soon as reasonably practicable and, in any event, no later than 4pm on the business day following—

(a) the day on which the person was, appeared or claimed to be excluded; or

(b) where an indication is sought under rule 8.45, the day on which the complainant received the indication.

(4) The appropriate person must, as soon as reasonably practicable following receipt of the complaint,—

(a) consider whether there is an excluded person;

(b) where satisfied that there is an excluded person, consider the complaint; and

(c) where satisfied that there has been prejudice, take such action as the appropriate person considers fit to remedy the prejudice.

(5) Paragraph (6) applies where the appropriate person is satisfied that the complainant is an excluded person and—

(a) a resolution was voted on at the meeting during the period of the person’s exclusion; and

(b) the excluded person asserts how the excluded person intended to vote on the resolution.

(6) Where the appropriate person is satisfied that if the excluded person had voted as that person intended it would have changed the result of the resolution, then the appropriate person must, as soon as reasonably practicable—

(a) count the intended vote as having been cast in that way;

(b) amend the record of the result of the resolution;

(c) where notice of the result of the resolution has been delivered to those entitled to attend the meeting, deliver notice to them of the change and the reason for it; and

(d) where notice of the result of the resolution has yet to be delivered to those entitled to attend the meeting, the notice must include details of the change and the reason for it.

(7) Where satisfied that more than one complainant is an excluded person, the appropriate person must have regard to the combined effect of the intended votes.

(8) The appropriate person must deliver notice to the complainant of any decision as soon as reasonably practicable.

(9) A complainant who is not satisfied by the action of the appropriate person may apply to the court for directions and any application must be made no more than 2 business days from the date of receiving the decision of the appropriate person.

PART 9 — PROXIES AND CORPORATE REPRESENTATION

[Note: a document required by the Act or these Rules must also contain the standard contents required as set out in Part 1.]

Application and interpretation

9.1

(1) This Part applies in any case where a proxy is given in relation to a meeting or insolvency proceedings under the Act or these Rules, or where a corporation authorises a person to represent it.

(2) References in this Part to “the chair” are to the chair of the meeting for which a specific proxy is given or at which a continuing proxy is exercised.

Specific and continuing proxies

9.2

(1) A proxy is a document made by a creditor, member or contributory which directs or authorises another person (a “proxy-holder”) to act as the representative of the creditor, member or contributory at a meeting, or meetings, by speaking, voting, abstaining, or proposing resolutions.

(2) A proxy may be either—

(a) a specific proxy which relates to a specific meeting; or

(b) a continuing proxy for the insolvency proceedings.

(3) A specific proxy must—

(a) direct the proxy-holder how to act at the meeting by giving specific instructions; or

(b) authorise the proxy-holder to act at the meeting without specific instructions; or

(4) A proxy is to be treated as a specific proxy for the meeting which is identified in the proxy unless it states that it is a continuing proxy for the insolvency proceedings.

(5) A continuing proxy must authorise the proxy-holder to attend, speak, vote or abstain, or to propose resolutions without giving the proxy-holder any specific instructions.

(6) A continuing proxy may be superseded by a proxy for a specific meeting or withdrawn by a written notice to the office-holder.

(7) A creditor, member or contributory may appoint more than one person to be proxy-holder but if so—

(a) their appointment is as alternates; and

(b) only one of them may act as proxy-holder at a meeting.

(8) The proxy-holder must be an individual.

Blank proxy

9.3

(1) A blank proxy is a document which—

(a) complies with the requirements in this rule; and

(b) when completed with the details specified in paragraph (3) will be a proxy as described in rule 9.2.

(2) A blank proxy must state that the creditor, member or contributory named in the document (when completed) appoints a person who is named or identified as the proxy-holder of the creditor, member or contributory.

(3) The specified details are—

(a) the name and address of the creditor, member or contributory;

(b) either the name of the proxy-holder or the identification of the proxy-holder (e.g. the chair of the meeting);

(i) for a specific meeting, which is identified in the proxy; or

(ii) a continuing proxy for the insolvency proceedings; and

(d) if the proxy is for a specific meeting, instructions as to the extent to which the proxy-holder is directed to vote in a particular way, to abstain or to propose any resolution.

(4) When it is delivered, a blank proxy must not have inserted in it—

(a) the name or description of any person as proxy-holder or as a nominee for the office holder; or

(b) instructions as to how a person appointed as proxy-holder is to act.

(5) A blank proxy must have a note to the effect that the proxy may be completed with the name of the person or the chair of the meeting who is to be proxy-holder.

Use of proxies

9.4

(1) A proxy for a specific meeting must be delivered to the chair at or before the meeting.

(2) A continuing proxy must be delivered to the office-holder and may be exercised at any meeting which begins after the proxy is delivered.

(3) A proxy may be used at the resumption of the meeting after an adjournment, but if a different proxy is given for use at a resumed meeting, that proxy must be delivered to the chair at or before the resumed meeting.

(4) Where a specific proxy directs a proxy-holder to vote for or against a resolution for the nomination or appointment of a person as office-holder, the proxy-holder may, unless the proxy states otherwise, vote for or against (as the proxy-holder thinks fit) a resolution for the nomination or appointment of that person jointly with another or others.

(5) A proxy-holder may propose a resolution which is one on which the proxy-holder could vote if someone else proposed it.

(6) Where a proxy gives specific directions as to voting, this does not, unless the proxy states otherwise, prohibit the proxy-holder from exercising discretion as to how to vote on a resolution which is not dealt with by the proxy.

(7) The chair may require a proxy used at a meeting to be the same as or substantially similar to the blank proxy delivered for that meeting or to a blank proxy previously delivered which has been completed as a continuing proxy.

Use of proxies by the chair

9.5

(1) Where a proxy appoints the chair (however described in the proxy) as proxy-holder the chair may not refuse to be the proxy-holder.

(2) Where the office-holder is appointed as proxy-holder but another person acts as chair of the meeting, that other person may use the proxies as if that person were the proxy-holder.

(3) Where, in a meeting of creditors in a creditors’ voluntary winding up or a winding up by the court, the chair holds a proxy which requires the proxy-holder to vote for a particular resolution and no other person proposes that resolution the chair must propose it unless the chair considers that there is good reason for not doing so.

(4) If the chair does not propose such a resolution, the chair must as soon as reasonably practicable after the meeting deliver a notice of the reason why that was not done to the creditor, member or contributory.

Right of inspection and delivery of proxies

9.6

(1) A person attending a meeting is entitled, immediately before or in the course of the meeting, to inspect proxies or any statement of claim and documentary evidence of debt delivered to the chair or to any other person in accordance with the notice convening the meeting.

(2) Where the chair is not the office-holder, the chair must deliver all proxies used for voting at a meeting to the office-holder, as soon as reasonably practicable after the meeting.

Proxy-holder with financial interest

9.7

(1) A proxy-holder must not vote for a resolution which would—

(a) directly or indirectly place the proxy-holder or any associate of the proxy-holder in a position to receive any remuneration, fees or expenses from the company’s assets; or

(b) fix or change the amount of or the basis of any remuneration, fees or expenses receivable by the proxy-holder or any associate of the proxy-holder out of the company’s assets.

(2) However, a proxy-holder may vote for a resolution described in paragraph (1) if the proxy specifically directs the proxy-holder to vote in that way.

(3) Where an office-holder is appointed as proxy-holder and that proxy is used under rule 9.5(2) by another person acting as chair, the office-holder is deemed to be an associate of the person acting as chair.

Resolution conferring authorisation to represent corporation

[Note: section 434B[^f00100] makes provision for corporate representation in company insolvency proceedings.]

9.8 1 A person authorised to represent a corporation (other than as a proxy-holder) at a meeting of creditors or contributories must produce to the chair— a the resolution conferring the authority; or b a copy of that resolution certified as a true copy by— i 2 directors; ii a director and the secretary; or iii a director in the presence of a witness who attests the director’s signature. 2 The resolution conferring the authority must have been signed or subscribed (or in the case of an electronic document, authenticated) by or on behalf of the company in accordance with the Requirements of Writing (Scotland) Act 1995[^f00101]. 3 In paragraph (2) “authenticated” has the meaning given in the Requirements of Writing (Scotland) Act 1995.

PART 10 — CREDITORS' AND LIQUIDATION COMMITTEES

CHAPTER 1 — Introductory

Scope and interpretation

10.1

(1) This Part applies to the establishment and operation of—

(a) a creditors’ committee in a receivership;

(b) a liquidation committee in a creditors’ voluntary winding up; and

(2) In this Part—

“contributory member” means a member of a liquidation committee appointed by the contributories; and

“creditor member” means a member of a liquidation committee appointed by the creditors.

CHAPTER 2 — Functions of a committee

Functions of a committee

10.2

In addition to any functions conferred on a liquidation committee by any provision of the Act or any other provision of these Rules—

(a) a committee is to—

(i) assist the office-holder in discharging the office-holder’s functions; and

(ii) act in relation to the office-holder in such manner as may from time to time be agreed; and

(b) a committee in a receivership is to represent to the receiver the views of the unsecured creditors.

CHAPTER 3 — Membership and formalities of formation of a committee

[Note: (1) a document required by the Act or these Rules must also contain the standard contents required as set out in Part 1.

Note: (2) see sections 215, 363, 365 and 371 of the Financial Services and Markets Act 2000 for the rights of persons appointed by a scheme manager, the Financial Conduct Authority and the Prudential Regulation Authority to attend committees and make representations.]

Number of members of a committee

[Note: section 101(1) provides that a liquidation committee in a creditors’ voluntary winding up may not have more than 5 members.]

10.3 1 A committee in a receivership must have at least 3 members but not more than 5 members. 2 A liquidation committee in a creditors’ voluntary winding up appointed pursuant to section 101[^f00102] must have at least 3 members. 3 A liquidation committee in a winding up by the court established under section 142[^f00103] must have— a at least 3 and not more than 5 members elected by the creditors; and b where the grounds on which the company was wound up do not include inability to pay its debts, and where the contributories so decide, up to 3 contributory members elected by the contributories.

Eligibility for membership of creditors’ or liquidation committee

10.4

(1) A creditor is eligible to be a member of a committee if—

(a) the person has submitted a statement of claim and, where not dispensed with under rules 7.16(2) or 8.28(2), documentary evidence of debt;

(b) the debt is not fully secured and the creditor has not agreed to surrender the creditor’s security to the liquidator; and

(i) the claim has been wholly rejected for voting purposes, or

(ii) the claim has been wholly rejected for the purpose of distribution or dividend.

(2) No person can be a member as both a creditor and a contributory.

(3) A body corporate or a partnership may be a member of a committee, but it cannot act otherwise than by a representative appointed under rule 10.17.

Establishment of committees

10.5

(1) Where the creditors, or where applicable, contributories, decide that a creditors’ or liquidation committee should be established, the convener or chair of the decision procedure or the convener of the deemed consent process (if not the office-holder) must—

(a) as soon as reasonably practicable deliver a notice of the decision to the office-holder (or to the person appointed as office-holder); and

(b) where a decision has also been made as to membership of the committee, inform the office-holder of the names and addresses of the persons elected to be members of the committee.

(2) Before a person may act as a member of the committee that person must agree to do so.

(3) A person’s proxy-holder attending a meeting establishing the committee or, in the case of a body corporate or partnership, its duly appointed representative, may give such agreement (unless the proxy or instrument conferring authority contains a statement to the contrary).

(4) Where a decision has been made to establish a committee but not as to its membership, the office-holder must seek a decision from the creditors (about creditor members of the committee) and, where appropriate in a winding up by the court, a decision from contributories (about contributory members of the committee).

(5) The committee is not established (and accordingly cannot act) until the office-holder has delivered a notice of its membership in accordance with paragraph (9).

(6) The notice must contain the following—

(a) a statement that the committee has been duly constituted;

(b) identification details for any company that is a member of the committee;

(7) The notice must be authenticated and dated by the office-holder.

(8) The notice must be delivered as soon as reasonably practicable after the minimum number of persons required by rule 10.3 have agreed to act as members and been elected.

(9) The office-holder must, as soon as reasonably practicable, deliver the notice to AiB.

Liquidation committee established by contributories

10.6

(1) This rule applies where, under section 142, the creditors do not decide that a liquidation committee should be established, or decide that a committee should not be established.

(2) The contributories may decide to appoint one of their number to make application to the court for an order requiring the liquidator to seek a further decision from the creditors on whether to establish a liquidation committee; and—

(a) the court may, if it thinks that there are special circumstances to justify it, make such an order; and

(b) the creditors’ decision sought by the liquidator in compliance with the order is deemed to have been a decision under section 142.

(3) If the creditors decide under paragraph (2)(b) not to establish a liquidation committee, the contributories may establish a committee.

(4) The committee must then consist of at least 3, and not more than 5, contributories elected by the contributories; and rule 10.5 applies, substituting for the reference to rule 10.3 in rule 10.5(8) a reference to this paragraph.

Notice of change of membership of a committee

10.7

(1) If there is a change in membership of the committee, the office-holder must deliver a notice to AiB, as soon as reasonably practicable.

(2) The notice must contain—

(a) the date of the original notice in respect of the constitution of the committee and the date of the last notice of membership given under this rule (if any);

(b) a statement that this notice of membership replaces the previous notice;

(d) the full name and address of any member that is not a company;

(e) a statement whether any member has become a member since the issue of the previous notice;

(f) the identification details for a company or otherwise the full name of any member named in the previous notice who is no longer a member and the date the membership ended.

(3) The notice must be authenticated and dated by the office-holder.

Vacancies: creditor members of creditors’ or liquidation committee

10.8

(1) This rule applies if there is a vacancy among the creditor members of a creditors’ or liquidation committee or where the number of creditor members of the committee is fewer than the maximum allowed.

(2) A vacancy need not be filled if—

(a) the office-holder and a majority of the remaining creditor members agree; and

(b) the total number of creditor members does not fall below 3.

(3) The office-holder may appoint a creditor, who is qualified under rule 10.4 to be a member of the committee, to fill a vacancy or as an additional member of the committee, if—

(a) the remaining creditor members of the committee (provided there are at least 2) agree in accordance with paragraph (4) to the appointment; and

(b) the creditor agrees to act.

(4) Where there are only 2 remaining members of the committee, both must agree to the appointment, otherwise a majority must agree.

(5) Alternatively, the office-holder may seek a decision from creditors to appoint a creditor (with that creditor’s consent) to fill the vacancy.

(6) Where the vacancy is filled by an appointment made by a decision of creditors which is not chaired or convened by the office-holder, the chair or convenor must report the appointment to the office-holder.

Vacancies: contributory members of liquidation committee

10.9

(1) This rule applies if there is a vacancy among the contributory members of a liquidation committee or where the number of contributory members of the committee is fewer than the maximum allowed under rule 10.3(3)(b) or 10.6(4) as the case may be.

(2) A vacancy need not be filled if—

(a) the liquidator and a majority of the remaining contributory members agree; and

(b) in the case of a committee of contributories only, the number of members does not fall below 3.

(3) The liquidator may appoint a contributory to be a member of the committee, to fill a vacancy or as an additional member of the committee, if—

(a) a majority of the remaining contributory members of the committee (provided there are at least 2) agree to the appointment; and

(b) the contributory agrees to act.

(4) Alternatively, the office-holder may seek a decision from contributories to appoint a contributory (with that contributory’s consent) to fill the vacancy.

(5) Where the vacancy is filled by an appointment made by a decision of contributories which is not convened or chaired by the office-holder, the convener or chair must report the appointment to the office-holder.

Resignation

10.10

A member of a committee may resign by informing the office-holder in writing.

Termination of membership

10.11

A person’s membership of a committee is automatically terminated if that person—

(a) becomes bankrupt or that person’s estate is sequestrated, as the case may be, in which case the trustee in bankruptcy or the trustee in the sequestration replaces the person bankrupt or sequestrated as a member of the committee;

(b) grants a trust deed for the benefit of creditors;

(d) is a person to whom a moratorium under a debt relief order applies;

(e) neither attends nor is represented at 3 consecutive meetings (unless it is resolved at the third of those meetings that this rule is not to apply in that person’s case);

(f) has ceased to satisfy the criteria set out in rule 10.4 for eligibility to be a member of the committee;

(g) ceases to be a creditor or is found never to have been a creditor;

(h) ceases to be a contributory or is found never to have been a contributory.

Removal

10.12

A creditor member of a committee may be removed by a decision of the creditors through a decision procedure and in the case of a liquidation committee a contributory member of the committee may be removed by a decision of contributories through a decision procedure.

Cessation of liquidation committee in a winding up when creditors are paid in full

10.13

(1) Where the creditors have been paid in full together with interest in accordance with section 189, the liquidator must deliver to AiB a notice to that effect.

(2) On the delivery of the notice the liquidation committee ceases to exist.

(3) The notice must—

(a) identify the liquidator;

(b) contain a statement by the liquidator certifying that the creditors of the company have been paid in full with interest in accordance with section 189; and

CHAPTER 4 — Meetings of Committee

[Note: a document required by the Act or these Rules must also contain the standard contents required as set out in Part 1.]

Meetings of committee

10.14

(1) Meetings of the committee must be held when and where determined by the office-holder.

(2) The office-holder must call a first meeting of the committee to take place within 6 weeks of the committee’s establishment.

(3) After the calling of the first meeting, the office-holder must call a meeting—

(a) if so requested by a member of the committee or a member’s representative (the meeting then to be held within 21 days of the request being received by the office-holder); and

(b) for a specified date, if the committee has previously resolved that a meeting be held on that date.

(4) The office-holder must give 5 business days’ notice of the venue of a meeting to each member of the committee (or a member’s representative, if designated for that purpose), except where the requirement for notice has been waived by or on behalf of a member.

(5) Waiver may be signified either at or before the meeting.

The chair at meetings

10.15

The chair at a meeting of a committee must be the office-holder or an appointed person.

Quorum

10.16

A meeting of a committee is duly constituted if due notice of it has been delivered to all the members, and at least 2 of the members are in attendance or represented.

Committee members' representatives

10.17

(1) A member of the committee may, in relation to the business of the committee, be represented by another person duly authorised by the member for that purpose.

(2) A person acting as a committee member’s representative must hold a letter of authority entitling that person to act (either generally or specifically) and authenticated by or on behalf of the committee member.

(3) A proxy or an instrument conferring authority (in respect of a person authorised to represent a body corporate or a partnership) is to be treated as a letter of authority to act generally (unless the proxy or instrument conferring authority contains a statement to the contrary).

(4) The chair at a meeting of the committee may call on a person claiming to act as a committee member’s representative to produce a letter of authority, and may exclude that person if no letter of authority is produced at or by the time of the meeting or if it appears to the chair that the authority is deficient.

(5) A committee member may not be represented by—

(a) another member of the committee;

(b) a person who is at the same time representing another committee-member;

(d) a partnership;

(e) an undischarged bankrupt;

(f) a person whose estate has been sequestrated and who has not been discharged;

(g) a person who has granted a trust deed for the benefit of creditors;

(h) a person who has made a composition with creditors;

(i) a person to whom a moratorium period under a debt relief order applies;

(j) a person who is subject to a company directors disqualification order or a company directors disqualification undertaking; or

(k) a person who is subject to a bankruptcy restrictions order (including an interim order), a bankruptcy restrictions undertaking, a debt relief restrictions order (including an interim order) or a debt relief restrictions undertaking.

(6) Where a representative authenticates any document on behalf of a committee member the fact that the representative authenticates as a representative must be stated below the authentication.

Voting rights and resolutions

10.18

(1) At a meeting of the committee, each member (whether the member is in attendance or is represented by a representative) has one vote.

(2) A resolution is passed when a majority of the members attending or represented have voted in favour of it.

(3) Every resolution passed must be recorded in writing and authenticated by the chair, either separately or as part of the minutes of the meeting.

Resolutions by correspondence

10.19

(1) The office-holder may seek to obtain the agreement of the committee to a resolution by delivering to every member (or the member’s representative designated for the purpose) details of the proposed resolution.

(2) The details must be set out in such a way that the recipient may indicate agreement or dissent and where there is more than one resolution may indicate agreement to or dissent from each one separately.

(3) A member of the committee may, within 5 business days from the delivery of details of the proposed resolution, require the office-holder to summon a meeting of the committee to consider the matters raised by the proposed resolution.

(4) In the absence of such a request, the resolution is passed by the committee if a majority of the members (excluding a member or member’s representative who is to participate directly or indirectly in a transaction (see rule 10.25(4)) deliver notice to the office-holder that they agree with the resolution.

Remote attendance at meetings of committee

10.20

(1) Where the office-holder considers it appropriate, a meeting may be conducted and held in such a way that persons who are not present together at the same place may attend it.

(2) A person attends such a meeting who is able to exercise that person’s right to speak and vote at the meeting.

(3) A person is able to exercise the right to speak at a meeting when that person is in a position to communicate during the meeting to all those attending the meeting any information or opinions which that person has on the business of the meeting.

(4) A person is able to exercise the right to vote at a meeting when—

(a) that person is able to vote, during the meeting, on resolutions or determinations put to the vote at the meeting; and

(b) that person’s vote can be taken into account in determining whether or not such resolutions or determinations are passed at the same time as the votes of all the other persons attending the meeting.

(5) Where such a meeting is to be held the office-holder must make whatever arrangements the office-holder considers appropriate to—

(a) enable those attending the meeting to exercise their rights to speak or vote; and

(b) verify the identity of those attending the meeting and to ensure the security of any electronic means used to enable attendance.

(6) A requirement in these Rules to specify a place for the meeting may be satisfied by specifying the arrangements the office-holder proposes to enable persons to exercise their rights to speak or vote where in the reasonable opinion of the office-holder—

(a) a meeting will be attended by persons who will not be present together at the same place; and

(b) it is unnecessary or inexpedient to specify a place for the meeting.

(7) In making the arrangements referred to in paragraph (6) and in forming the opinion referred to in paragraph (6)(b), the office-holder must have regard to the legitimate interests of the committee members or their representatives attending the meeting in the efficient despatch of the business of the meeting.

(8) Where the notice of a meeting does not specify a place for the meeting the office-holder must specify a place for the meeting if at least one member of the committee requests the office-holder to do so in accordance with rule 10.21.

Procedure for requests that a place for a meeting should be specified

10.21

(1) This rule applies to a request to the office-holder under rule 10.20(8) to specify a place for the meeting.

(2) The request must be made within 3 business days of the date on which the office-holder delivered the notice of the meeting in question.

(3) Where the office-holder considers that the request has been properly made in accordance with this rule, the office-holder must—

(a) deliver notice to all those previously given notice of the meeting—

(i) that it is to be held at a specified place; and

(ii) as to whether the date and time are to remain the same or not;

(b) fix a venue for the meeting, the date of which must be not later than 7 business days after the original date for the meeting; and

(4) The notices required by sub-paragraphs (a) and (c) may be delivered at the same or different times.

(5) Where the office-holder has specified a place for the meeting in response to the request under rule 10.20(8), the chair of the meeting must attend the meeting by being present in person at that place.

CHAPTER 5 — Supply of information by the office-holder to the committee

[Note: a document required by the Act or these Rules must also contain the standard contents required as set out in Part 1.]

Notice requiring office-holder to attend the creditors’ committee (receivership: section 68(2))

[Note: in a receivership section 68(2) enables the creditors’ committee to require the receiver to attend the committee or provide the committee with information.]

10.22 1 This rule applies where a committee in a receivership resolves under section 68(2) to require the attendance of the receiver. 2 The notice delivered to the office-holder requiring the receiver’s attendance must be— a accompanied by a copy of the resolution; and b authenticated by a member of the committee. 3 A member’s representative may authenticate the notice for the member. 4 The meeting at which the receiver’s attendance is required must be fixed by the committee for a business day, and must be held at such time and place as the receiver determines. 5 Where the receiver so attends, the committee may elect one of their number to be chair of the meeting in place of the receiver or the appointed person.

Office-holder’s obligation to supply information to the committee (winding up)

10.23

(1) This rule applies in relation to a creditors’ voluntary winding up and a winding up by the court.

(2) The liquidator must deliver a report to every member of the liquidation committee containing the information required by paragraph (3)—

(a) not less than once in every period of 6 months (unless the committee agrees otherwise); and

(b) when directed to do so by the committee.

(3) The required information is a report setting out—

(a) the position generally in relation to the progress of the insolvency proceedings; and

(b) any matters arising in connection with them to which the office-holder considers the committee’s attention should be drawn.

(4) The liquidator must, as soon as reasonably practicable after being directed by the committee—

(a) deliver any report directed under paragraph (2)(b);

(b) comply with a request by the committee for information.

(5) However the liquidator need not comply with such a direction where it appears to the office-holder that—

(a) the direction is frivolous or unreasonable;

(b) the cost of complying would be excessive, having regard to the relative importance of the information; or

(6) Where the committee has come into being more than 28 days after the appointment of the liquidator, the liquidator must make a summary report to the members of the committee of what actions the liquidator has taken since the liquidator’s appointment, and must answer such questions as they may put to the liquidator relating to the liquidator’s conduct of the proceedings so far.

(7) A person who becomes a member of the committee at any time after its first establishment is not entitled to require a report under this rule by the liquidator of any matters previously arising, other than a summary report.

(8) Nothing in this rule disentitles the committee, or any member of it, from having access to the liquidator’s sederunt book, or from seeking an explanation of any matter within the committee’s responsibility.

CHAPTER 6 — Miscellaneous

[Note: a document required by the Act or these Rules must also contain the standard contents required as set out in Part 1.]

Expenses of members etc.

10.24

(1) The office-holder must pay, as an expense of the insolvency proceedings, the reasonable travelling expenses directly incurred by members of the committee or their representatives in attending the committee’s meetings or otherwise on the committee’s business.

(2) The requirement for the office-holder to pay the expenses does not apply to a meeting of the committee held within 6 weeks of a previous meeting, unless the meeting is summoned by the office-holder.

Dealings by committee members and others: winding up

10.25

(1) This rule applies in a creditors’ voluntary winding up and a winding up by the court to a person who is, or has been in the preceding 12 months—

(a) a member of the committee;

(b) a member’s representative; or

(2) Such a person must not enter into a transaction as a result of which that person would—

(a) receive out of the company’s assets any payment for services given or goods supplied in connection with the liquidation;

(b) obtain a profit from the liquidation; or

(3) However such a transaction may be entered into—

(a) with the prior sanction of the committee, where it is satisfied (after full disclosure of the circumstances) that the person will be giving full value in the transaction;

(b) with the prior permission of the court; or

(c) if that person does so as a matter of urgency, or by way of performance of a contract in force before the date on which the company went into liquidation, and that person obtains the court’s permission for the transaction, having applied for it without undue delay.

(4) Neither a member nor a representative of a member who is to participate directly or indirectly in a transaction may vote on a resolution to sanction that transaction.

(5) The court may, on the application of an interested person—

(a) set aside a transaction which appears to it to be contrary to this rule; and

(b) make such other order about the transaction as it thinks just, including an order requiring a person to whom this rule applies to account for any profit obtained from the transaction and compensate the insolvent estate for any resultant loss.

(6) The court will not make an order under the previous paragraph in respect of an associate of a member of the committee or an associate of a member’s representative, if satisfied that the associate or representative entered into the relevant transaction without having any reason to suppose that in doing so the associate or representative would contravene this rule.

(7) The costs of the application are not payable as an expense of the liquidation unless the court orders otherwise.

Dealings by committee members and others: receivership

10.26

(1) This rule applies in a receivership.

(2) Membership of the committee does not prevent a person from dealing with the company provided that a transaction is in good faith and for value.

(3) The court may, on the application of an interested person—

(a) set aside a transaction which appears to it to be contrary to this rule; and

(b) make such other order about the transaction as it thinks just including an order requiring a person to whom this rule applies to account for any profit obtained from the transaction and compensate the company for any resultant loss.

Formal defects

10.27

The acts of a creditors’ committee or a liquidation committee are valid notwithstanding any defect in the appointment, election or qualifications of a member of the committee or a committee member’s representative or in the formalities of its establishment.

Special rule for winding up by the court: functions vested in the court

10.28

At any time when the functions of a committee in a winding up by the court are vested in the court under section 142(5), requirements of the Act or these Rules about notices to be delivered, or reports to be made, to the committee by the liquidator do not apply, otherwise than as enabling the committee to require a report as to any matter.

CHAPTER 7 — Winding up by the court following an administration

[Note: a document required by the Act or these Rules must also contain the standard contents required as set out in Part 1.]

Continuation of creditors’ committee

[Note: paragraph 83(8)(f) of schedule B1 makes provision for the liquidation committee to continue where the administration is followed by a creditors’ voluntary winding up.]

10.29 1 This rule applies where— a a winding-up order has been made by the court on the application of the administrator under paragraph 79 of schedule B1[^f00104]; b the court makes an order under section 140(1) appointing the administrator as the liquidator; and c a creditors’ committee was in existence immediately before the winding-up order was made. 2 The creditors’ committee shall continue in existence after the date of the order as if appointed as a liquidation committee under section 142[^f00105]. 3 However, subject to rule 10.8(3)(a), the committee cannot act until— a the minimum number of persons required by rule 10.3 have agreed to act as members of the liquidation committee (including members of the former creditors’ committee and any other who may be appointed under rule 10.8); and b the liquidator has delivered a notice of continuance of the committee to AiB. 4 The notice must be delivered as soon as reasonably practicable after the minimum number of persons required have agreed to act as members or, if applicable, been appointed. 5 The notice must contain— a a statement that the former creditors’ committee is continuing in existence; b identification details for any company that is a member of the committee; and c the full name and address of each member that is not a company. 6 The notice must be authenticated and dated by the liquidator.

PART 11 — THE EU REGULATION

[Note: a document required by the Act or these Rules must also contain the standard contents required as set out in Part 1.]

Interpretation of this Part

11.1

In this Part—

“winding up proceedings” means winding up proceedings listed in the United Kingdom entry in Annex A to the EU Regulation;

“conversion into winding up proceedings” refers to an order under Article 51 of the EU Regulation (conversion of secondary insolvency proceedings) that winding up proceedings of one kind are converted into winding up proceedings of another kind.

Conversion into other winding up proceedings: application

11.2

(1) This rule applies where a member State liquidator in main proceedings applies to the court under Article 51 of the EU Regulation for conversion of winding up proceedings of one kind into winding up proceedings of another kind.

(2) A statement containing a statutory declaration made by or on behalf of the member State liquidator must be lodged with the court in support of the application.

(3) The statement must state—

(a) that main proceedings have been opened in relation to the company in a member State other than the United Kingdom;

(b) the belief of the person making the statement that conversion into other winding up proceedings would be most appropriate as regards the interests of the local creditors and coherence between the main and secondary insolvency proceedings;

(c) the kind of winding up proceedings into which, in the opinion of the person making the statement, the winding up proceedings should be converted; and

(d) all other matters that, in the opinion of the member State liquidator, would assist the court in—

(i) deciding whether to make such an order, and

(ii) considering whether and, if so, what consequential provision to include.

(4) The application and the statement must be served upon the company.

Conversion into winding up proceedings: court order

11.3

(1) On hearing an application for conversion of winding up proceedings under rule 11.2, the court may, subject to Article 51 of the EU Regulation, make such order as it thinks just.

(2) An order for conversion into winding up proceedings may—

(a) provide that the company be wound up as if a resolution for voluntary winding up under section 84 were passed on the day on which the order is made; and

(b) contain such consequential provisions as the court thinks just.

Confirmation of creditors' voluntary winding up: application

11.4

(1) This rule applies where—

(a) a company has passed a resolution for voluntary winding up, and either—

(i) no declaration of solvency has been made in accordance with section 89, or

(ii) a declaration made under section 89—

(aa) has no effect by virtue of section 89(2), or

(bb) is treated as not having been made by virtue of section 96[^f00106]; or

(b) a company has moved from administration to creditors’ voluntary winding up in accordance with paragraph 83 of schedule B1[^f00107].

(2) The liquidator may apply to court for an order confirming the winding up as a creditors’ voluntary winding up for the purposes of the EU Regulation.

(3) The application must be supported by a statement containing a statutory declaration made by the liquidator which must contain—

(a) identification details for the liquidator and the company;

(b) the date on which the resolution for voluntary winding up was passed;

(d) a statement that the documents required by paragraph (4)(c) and (d) are true copies of the originals; and

(e) a statement whether the proceedings will be main proceedings, secondary proceedings or territorial proceedings and the reasons for so stating.

(4) The liquidator must lodge with the court—

(a) 2 copies of the application;

(b) evidence of having been appointed liquidator of the company;

(i) the resolution for voluntary winding up, or

(ii) the notice of moving from administration to creditors’ voluntary winding up sent by the administrator to the registrar of companies under paragraph 83(3) of schedule B1; and

(d) a copy of—

(i) the statement of affairs required by section 99[^f00108] or under paragraph 47 of schedule B1, or

(ii) the information included in the administrator’s statement of proposals under paragraph 49 of schedule B1.

Confirmation of creditors' voluntary winding up: court order

11.5

(1) On an application under the preceding rule, the court may make an order confirming the creditors’ voluntary winding up.

(2) It may do so without a hearing.

Confirmation of creditors' voluntary winding up: notice to member State liquidator

11.6

(1) Where the court has confirmed the creditors’ voluntary winding up, the liquidator must as soon as reasonably practicable give notice to any member State liquidator appointed in relation to the company.

(2) Paragraph (1) is without prejudice to the liquidator’s obligation in Article 54 of the EU Regulation (duty to inform creditors in other member States) in relation to the creditors’ voluntary winding up.

Proceedings in another member State: duty to give notice

11.7

(1) This rule applies where a liquidator or provisional liquidator is required to give notice, or provide a copy of a document (including an order of court), to the court or the registrar of companies.

(2) Where not already required to do so by Article 41 of the EU Regulation, the liquidator or provisional liquidator must also give notice or provide a copy to—

(a) any member State liquidator; or

(b) where the liquidator or provisional liquidator knows that an application has been made to commence insolvency proceedings in another member State but a member State liquidator has not yet been appointed to the court to which that application has been made.

Member State liquidator: rules on creditors' participation in proceedings

11.8

(1) The provisions in these Rules apply to a member State liquidator’s participation in proceedings in accordance with Article 45 of the EU Regulation (exercise of creditors’ rights) in the same manner as they do to creditors’ participation in those proceedings.

(2) In this rule, “creditors’ participation”—

(a) includes the following matters:—

(i) requesting and being provided with information, including inspecting or obtaining copies of documents or files,

(ii) being provided with notices or other documents,

(iii) participating and voting in decision procedures,

(iv) the establishment and operation of creditor committees,

(v) submitting statements of claim and documentary evidence of debt in respect of debts and receipt of dividends, and

(vi) applying to the court and appearing at hearings; and

(b) is limited to creditors’ participation from the time of the opening of proceedings in accordance with Article 2(8) of the EU Regulation.

Main proceedings in Scotland: undertaking in respect of assets in another member State (Article 36 of the EU Regulation)

11.9

(1) This rule applies where a liquidator or provisional liquidator in main proceedings proposes to give an undertaking under Article 36 of the EU Regulation in respect of assets located in another member State.

(2) In addition to the requirements as to form and content set out in Article 36, the undertaking must contain—

(a) the heading “Proposed Undertaking under Article 36 of the EU Insolvency Regulation (2015/848)”;

(b) identification details for the main proceedings;

(d) a description of the effect of the undertaking if approved.

(3) The proposed undertaking must be delivered to all the local creditors in the member State concerned of whose address the liquidator or provisional liquidator is aware.

(4) Where the undertaking is rejected the liquidator or provisional liquidator must inform all the creditors of the company of the rejection of the undertaking as soon as reasonably practicable.

(5) Where the undertaking is approved the liquidator or provisional liquidator must as soon as reasonably practicable—

(a) send a copy of the undertaking to all the creditors with a notice informing them of the approval of the undertaking and of its effect (so far as they have not already been given this information under paragraph (2)(d));

(b) where the insolvency proceedings relate to a registered company, deliver a copy of the undertaking to the registrar of companies.

(6) The liquidator or provisional liquidator may advertise details of the undertaking in the other member State in such manner as the office-holder thinks fit.

Main proceedings in another member State: approval of undertaking offered by the member State liquidator to local creditors in the UK

11.10

(1) This rule applies where a member State liquidator proposes an undertaking under Article 36 of the EU Regulation and the secondary proceedings which the undertaking is intended to avoid would be winding up proceedings to which these Rules apply.

(2) The decision by the local creditors whether to approve the undertaking must be made by a decision procedure subject to the rules which apply to the approval of a proposed CVA under section 4A[^f00109] of the Act.

(3) The rules in Chapters 1 to 9 of Part 5 of the CVA and Administration Rules 2018 apply to the decision procedure (with any necessary modifications) except for the following— 5.7, 5.12, 5.14, 5.16 to 5.18 and 5.27.

(4) Where the main proceedings relate to a registered company the member State liquidator must deliver a copy of the approved undertaking to the registrar of companies.

Powers of a liquidator, provisional liquidator or member State liquidator in proceedings concerning members of a group of companies (Article 60 of the EU Regulation)

11.11

Where a liquidator or provisional liquidator or a member State liquidator makes an application in accordance with paragraph (1)(b) of Article 60 of the EU Regulation the application must state with reasons why the applicant thinks the matters set out in points (i) to (iv) of that paragraph apply.

Group coordination proceedings (Section 2 of Chapter 5 of the EU Regulation)

11.12

(1) An application to open group coordination proceedings must be headed “Application under Article 61 of Regulation (EU) 2015/848 to open group coordination proceedings”.

(2) The application must, in addition to the requirements in Article 61 of the EU Regulation, contain—

(a) identification and contact details for the liquidator or provisional liquidator making the application;

(b) identification details for the company and the insolvency proceedings by virtue of which the liquidator or provisional liquidator is making the application;

(c) identification details for the company and the insolvency proceedings in respect of each company which is a member of the group;

(d) contact details for the office-holders and member state liquidators appointed in those proceedings;

(e) identification details for any insolvency proceedings in respect of a member of the group which are not to be subject to the coordination because of an objection to being included; and

(f) if relevant, a copy of any such agreement as is mentioned in Article 66 of the EU Regulation.

(3) An “office-holder” in paragraph (2)(d) includes a person holding office in insolvency proceedings in relation to the company in England and Wales or Northern Ireland.

Group coordination order (Article 68 of the EU Regulation)

11.13

(1) An order opening group coordination proceedings must also contain—

(a) details of the matters set out in Article 68(1)(a) to (c) of the EU Regulation;

(b) identification details for the insolvency proceedings by virtue of which the liquidator or provisional liquidator is making the application;

(d) identification details for the insolvency proceedings which are subject to the coordination; and

(e) identification details for any insolvency proceedings for a member of the group which are not subject to the coordination because of an objection to being included.

(2) The liquidator or provisional liquidator must deliver a copy of the order to the coordinator and to any person who is, in respect of proceedings subject to the coordination—

(a) an office-holder,

(b) a person holding office in insolvency proceedings in relation to the company in England and Wales or Northern Ireland, and

Delivery of group coordination order to registrar of companies

11.14

A liquidator or provisional liquidator in respect of insolvency proceedings subject to coordination must deliver a copy of the group coordination order to the registrar of companies.

Liquidator or provisional liquidator's report

11.15

(1) This rule applies where, under the second paragraph of Article 70(2) of the EU Regulation, a liquidator or provisional liquidator is required to give reasons for not following the coordinator’s recommendations or the group coordination plan.

(2) Those reasons must be given as soon as reasonably practicable by a notice to all the creditors.

(3) Those reasons may be given in the next progress report where doing so satisfies the requirement to give the reasons as soon as reasonably practicable.

Publication of opening of proceedings by a member State liquidator

11.16

(1) This rule applies where—

(a) a company subject to insolvency proceedings has an establishment in Scotland; and

(b) a member State liquidator is required or authorised under Article 28 of the EU Regulation to publish a notice.

(2) The notice must be gazetted.

Statement by member State liquidator that insolvency proceedings in another member State are closed etc.

11.17

A statement by a member State liquidator under any of sections 201, 204 or 205 informing the registrar of companies that the insolvency proceedings in another member State are closed or that the member State liquidator consents to the dissolution must contain—

(a) identification details for the company; and

(b) identification details for the member State liquidator.

PART 12 — PERMISSION TO ACT AS DIRECTOR ETC. OF COMPANY WITH A PROHIBITED NAME (SECTION 216)

[Note: a document required by the Act or these Rules must also contain the standard contents required as set out in Part 1.]

Preliminary

12.1

The rules in this Part—

(a) relate to permission required under section 216 (restriction on re-use of name of company in insolvent liquidation) for a person to act as mentioned in section 216(3) in relation to a company with a prohibited name;

(b) prescribe the cases excepted from that provision, that is to say, in which a person to whom the section applies may so act without that permission; and

Application for permission under section 216(3)

12.2

At least 14 days’ notice of any application for permission to act in any of the circumstances which would otherwise be prohibited by section 216(3) must be given by the applicant to the Secretary of State, who may—

(a) appear at the hearing of the application; and

(b) whether or not appearing at the hearing, make representations.

Power of court to call for liquidator's report

12.3

When considering an application for permission under section 216, the court may call on the liquidator, or any former liquidator, of the liquidating company for a report of the circumstances in which the company became insolvent and the extent (if any) of the applicant’s apparent responsibility for its doing so.

First excepted case

12.4

(1) This rule applies where—

(a) a person (“the person”) was within the period mentioned in section 216(1) a director, or shadow director, of an insolvent company that has gone into insolvent liquidation; and

(b) the person acts in all or any of the ways specified in section 216(3) in connection with, or for the purposes of, the carrying on (or proposed carrying on) of the whole or substantially the whole of the business of the insolvent company where that business (or substantially the whole of it) is (or is to be) acquired from the insolvent company under arrangements—

(i) made by its liquidator, or

(ii) made before the insolvent company entered into insolvent liquidation by an office-holder acting in relation to it as administrator, receiver or supervisor of a CVA.

(2) The person will not be taken to have contravened section 216 if prior to that person acting in the circumstances set out in paragraph (1) a notice is, in accordance with the requirements of paragraph (3),—

(a) given by the person, to every creditor of the insolvent company whose name and address—

(i) is known by that person, or

(ii) is ascertainable by that person on the making of such enquiries as are reasonable in the circumstances; and

(b) published in the Gazette.

(3) The notice referred to in paragraph (2)—

(a) may be given and published before the completion of the arrangements referred to in paragraph (1)(b) but must be given and published no later than 28 days after their completion;

(b) must contain—

(i) identification details for the company,

(ii) the name and address of the person,

(iii) a statement that it is the person’s intention to act (or, where the insolvent company has not entered insolvent liquidation, to act or continue to act) in all or any of the ways specified in section 216(3) in connection with, or for the purposes of, the carrying on of the whole or substantially the whole of the business of the insolvent company,

(iv) the prohibited name or, where the company has not entered into insolvent liquidation, the name under which the business is being, or is to be, carried on which would be a prohibited name in respect of the person in the event of the insolvent company entering insolvent liquidation,

(v) a statement that the person would not otherwise be permitted to undertake those activities without the leave of the court or the application of an exception created by Rules made under the Insolvency Act 1986,

(vi) a statement that breach of the prohibition created by section 216 is a criminal offence, and

(vii) a statement as set out in rule 12.5 of the effect of issuing the notice under rule 12.4(2);

(i) the date that the company entered administration, had a receiver appointed or a CVA approved (whichever is the earliest), and

(ii) a statement that the person was a director of the company on that date; and

(d) where the company is in insolvent liquidation,—

(i) the date that the company entered insolvent liquidation, and

(ii) a statement that the person was a director of the company during the 12 months ending with that date.

(4) Notice may in particular be given under this rule—

(a) prior to the insolvent company entering insolvent liquidation where the business (or substantially the whole of the business) is, or is to be, acquired by another company under arrangements made by an office-holder acting in relation to the insolvent company as administrator, receiver or supervisor of a CVA (whether or not at the time of the giving of the notice the person is a director of that other company); or

(b) at a time when the person is a director of another company where—

(i) the other company has acquired, or is to acquire, the whole, or substantially the whole, of the business of the insolvent company under arrangements made by its liquidator, and

(ii) it is proposed that after the giving of the notice a prohibited name should be adopted by the other company.

(5) Notice may not be given under this rule by a person who has already acted in breach of section 216.

Statement as to the effect of the notice under rule 12.4(2)

12.5

The statement as to the effect of the notice under rule 12.4(2) must be as set out below—

Section 216(3) of the Insolvency Act 1986 lists the activities that a director of a company that has gone into insolvent liquidation may not undertake unless the court gives permission or there is an exception in the Insolvency Rules made under the Insolvency Act 1986. (This includes the exceptions in Part 12 of the Insolvency (Scotland) (Receivership and Winding up) Rules 2018.) These activities are— (a) acting as a director of another company that is known by a name which is either the same as a name used by the company in insolvent liquidation in the 12 months before it entered liquidation or is so similar as to suggest an association with that company; (b) directly or indirectly being concerned or taking part in the promotion, formation or management of any such company; or (c) directly or indirectly being concerned in the carrying on of a business otherwise than through a company under a name of the kind mentioned in (a) above. This notice is given under rule 12.4 of the Insolvency (Scotland) (Receivership and Winding up) Rules 2018 where the business of a company which is in, or may go into, insolvent liquidation is, or is to be, carried on otherwise than by the company in liquidation with the involvement of a director of that company and under the same or a similar name to that of that company. The purpose of giving this notice is to permit the director to act in these circumstances where the company enters (or has entered) insolvent liquidation without the director committing a criminal offence and in the case of the carrying on of the business through another company, being personally liable for that company’s debts. Notice may be given where the person giving the notice is already the director of a company which proposes to adopt a prohibited name.

Second excepted case

12.6

(1) Where a person to whom section 216 applies as having been a director or shadow director of the liquidating company applies for permission of the court under that section not later than 7 business days from the date on which the company went into liquidation, the person may, during the period specified in paragraph (2) below, act in any of the ways mentioned in section 216(3), notwithstanding that the person does not have the permission of the court under that section.

(2) The period referred to in paragraph (1) begins with the day on which the company goes into liquidation and ends either on the day falling 6 weeks after that date or on the day on which the court disposes of the application for permission under section 216, whichever of those days occurs first.

Third excepted case

12.7

The court’s permission under section 216(3) is not required where the company there referred to though known by a prohibited name within the meaning of the section—

(a) has been known by that name for the whole of the period of 12 months ending with the day before the liquidating company went into liquidation; and

(b) has not at any time in those 12 months been dormant within the meaning of section 1169(1), (2) and (3)(a) of the Companies Act[^f00110].

SCHEDULE 1 — Revocations

1

In this Schedule, “the 1986 Rules” means the Insolvency (Scotland) Rules 1986.

SCHEDULE 2 — Transitional and savings provisions

General

1

In this Schedule—

“the 1986 Rules” means the Insolvency (Scotland) Rules 1986 as they had effect immediately before the commencement date and a reference to “1986 rule” followed by a rule number is a reference to a rule in the 1986 Rules; and

“the commencement date” means the date these Rules come into force.

Requirement for office-holder to provide information to creditors on opting out

2

(1) Rule 1.35, which requires an office-holder to provide information to a creditor on the right to opt out under rule 1.34 in the first communication to the creditor, does not apply to an office-holder who has delivered the first communication before the commencement date.

(2) However, such an office-holder may choose to deliver information on the right to opt out in which case the communication to the creditor must contain the information required by rule 1.35.

Electronic communication

3

(1) Rule 1.41(4) does not apply where the relevant proceedings commenced before the commencement date.

(2) In this paragraph, relevant proceedings are commenced on—

(a) the appointment of a receiver;

(b) the passing or deemed passing of a resolution to wind up a company; or

Statements of affairs

4

(1) The provisions of these Rules relating to statements of affairs in receivership and company winding up do not apply and the following rules in the 1986 Rules continue to apply where relevant proceedings commenced before the commencement date and a person is required to provide a statement of affairs:—

(a) 1986 rules 3.2 to 3.3 (receivership); and

(b) 1986 rules 4.7 to 4.9 (company winding up).

(2) In this paragraph, “commenced” means—

(a) the appointment of a receiver;

(b) the passing or deemed passing of a resolution to wind up a company; or

Savings in respect of meetings taking place on or after the commencement date and resolutions by post

5

(1) This paragraph applies where on or after the commencement date—

(a) a creditors' or contributories' meeting is to be held as a result of a notice issued before that date in relation to a meeting for which provision is made by the 1986 Rules or the Act;

(b) a meeting is to be held as a result of a requisition by a creditor or contributory made before that date;

(c) a meeting at year's end is required by section 105 in the winding up of a company where the resolution to wind up was passed before the commencement date.

(2) Where paragraph (1) applies, Part 8 of these Rules does not apply and the 1986 Rules relating to the following continue to apply:—

(a) the requirement to hold the meeting;

(b) notice and advertisement of the meeting;

(d) recording and taking minutes of the meeting;

(e) the report or return of the meeting;

(f) membership and formalities of establishment of liquidation and creditors' committees where the resolution to form the committee is passed at the meeting;

(g) the office-holder's resignation or removal at the meeting;

(h) the office-holder's release;

(i) fixing the office-holder's remuneration;

(j) requests for further information from creditors;

(k) claims that remuneration is or that other expenses are excessive; and

(l) complaints about exclusion at the meeting.

(3) Where, before the commencement date, the office-holder sought to obtain a resolution by correspondence under 1986 rule 4.55, the 1986 Rules relating to resolutions by correspondence continue to apply and sub-paragraph (2) applies to any meeting that those rules require the office-holder to summon.

Savings in respect of final meetings taking place on or after the commencement date

6

(1) This paragraph applies where—

(a) before the commencement date—

(i) a final report to creditors has been sent under 1986 rule 4.31 (final report to creditors in liquidation),

(ii) a meeting has been called under section 94, 106 or 146 of the Act (final meeting) ; and

(b) a meeting under section 94, 106 or 146 of the Act is held on or after the commencement date.

(2) Where a meeting is held to which this paragraph applies, Part 8 of these Rules does not apply and the 1986 Rules relating to the following continue to apply:—

(a) the requirement to hold the meeting;

(b) notice and advertisement of the meeting;

(d) recording and taking minutes of the meeting;

(e) the form and content of the final report;

(f) the office-holder's resignation or removal;

(g) the office-holder's release;

(h) fixing the office-holder's remuneration;

(i) requests for further information from creditors;

(j) claims that remuneration is or other expenses are excessive; and

(k) complaints about exclusion at the meeting.

Progress reports and statements to the registrar of companies

7

(1) Where an obligation to prepare a progress report arises before the commencement date but has not yet been fulfilled 1986 rules 4.10 (information to creditors and contributories), 4.11 (information to register of companies) and 4.56 (liquidator's reports) continue to apply and the provisions of these Rules relating to progress reporting do not apply.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Foreign currency

8

(1) Where, before the commencement date an amount stated in a foreign currency on an application, statement of claim or evidence of debt (according to the nature of the debt claimed) is converted into sterling by the office-holder under 1986 rule 4.17, the office-holder and any successor to the office-holder must continue to use that exchange rate for subsequent conversions of that currency into sterling for the purpose of distributing the insolvent estate.

(2) However when an office-holder, convener, appointed person or chair uses an exchange rate to convert an application, claim or proof in a foreign currency into sterling solely for voting purposes before the commencement date, it does not prevent the office-holder from using an alternative rate for subsequent conversions.

General powers of liquidator

9

1986 rule 4.58 (dealings by committee-members and others) continues to apply in respect of the power of the court or the liquidation committee to ratify anything done by the liquidator without sanction, or leave of the court, before the amendments made to sections 165 and 167 of the Act by section 120(2) and (3) of the Small Business, Enterprise and Employment Act 2015 (which removed the requirements for the liquidator to obtain such sanction) came into force.

Accounting periods

10

(1) 1986 rule 4.68(2) (estate to be distributed in respect of accounting periods) continues to apply where the date of appointment of any provisional liquidator or liquidator in the winding up under the 1986 Rules fell before the commencement date.

(2) Rules 7.31(2) and (3) relating to the distribution of estate in respect of accounting periods do not apply where paragraph (1) applies.

Applications before the court

11

Where an application to court is lodged or a petition is presented under the Act or under the 1986 Rules before the commencement date and the application or petition has not been determined or withdrawn, the 1986 Rules continue to apply to that application or petition.

Forms

12

A form contained in schedule 5 of the 1986 Rules may be used on or after the commencement date if—

(a) the form is used to provide a statement of affairs pursuant to paragraph 4 of this schedule;

(b) the form relates to a meeting held under the 1986 Rules to which paragraph 5(1) of this schedule applies;

(c) the form is required because before the commencement date, the office-holder sought to obtain the passing of a resolution by post; or

(d) the form relates to any application to the court or petition presented before the commencement date.

Insolvency registers

13

(1) The AiB must maintain on the register of insolvencies information which is on the register immediately before the commencement date.

(2) The AiB must also enter on that register information received (but not yet entered on the register) before the commencement date.

(3) The court's power under rules 2.11, 4.6 and 5.16 to order that information must not be entered in those registers where there is a risk of violence applies equally to information received by AiB before the commencement date but not yet entered on a register.

Savings in respect of special insolvency rules: limited liability partnerships

14

The 1986 Rules, insofar as they apply to insolvency proceedings under the Limited Liability Partnerships Regulations 2001 and the Limited Liability Partnerships (Scotland) Regulations 2001 continue to have effect for the purposes of the application of those Regulations.

SCHEDULE 3 — Punishment of offences under these Rules

Rule creating offence	General nature of the offence	Mode of prosecution	Maximum penalty	Daily default fine (if applicable)
1.51(1)	Falsely claiming to be a person entitled to inspect a document with the intention of gaining sight of it.	1. On indictment.	2 years' imprisonment, or a fine, or both.	Not applicable.
1.51(1)	Falsely claiming to be a person entitled to inspect a document with the intention of gaining sight of it.	2. Summary.	12 months' imprisonment, or a fine not exceeding the statutory maximum, or both.	Not applicable.
2.16(7)	Receiver failing to deliver required accounts summary of receipts and payments.	Summary.	Level 3 on the standard scale.	One tenth of level 3 on the standard scale.
4.14(13)	Directors failing to seek a decision on the nomination of a liquidator	1. On indictment.	1 A fine	Not applicable
4.14(13)	Directors failing to seek a decision on the nomination of a liquidator	2. Summary.	2. A fine not exceeding the statutory maximum.	Not applicable
7.17	Producing false evidence; failing to report false evidence	1. On indictment	2 years' imprisonment, or a fine, or both.	Not applicable
7.17	Producing false evidence; failing to report false evidence	2. Summary	12 months' imprisonment, or a fine not exceeding the statutory maximum, or both.	Not applicable
7.18(7)	Failing to comply with an order requiring attendance for private examination	Summary	3 months' imprisonment; a fine not exceeding level 5 on the standard scale, or both.	Not applicable

SCHEDULE 4 — Information to be included in the sederunt book

Receivership

1

The instrument of appointment of the receiver under section 53.

2

(1) Each statement of affairs and each statement of concurrence under Part 2 of these Rules, subject to rule 2.11(3), 2.12 and sub-paragraph (2).

(2) Any schedule required by rule 2.8(5)(b) with the statement of affairs need not be inserted.

3

Any order for limited disclosure under rule 2.11(3) must be inserted as soon as reasonably practicable.

4

On discharge or variation of an order for limited disclosure under rule 2.11 as soon as reasonably practicable the full statement of affairs or statement of concurrence (or so much of the statement as is no longer subject to the order).

5

The report by the receiver under section 67.

Winding up

6

A certificate of appointment of the liquidator by the company under rule 3.2.

7

The inventory and valuation of the assets of the company under rule 3.14.

8

(1) The statement of affairs under rule 4.2 must be inserted as soon as reasonably practicable after completion of the decision procedure or deemed consent procedure referred to in rule 4.11 (nomination of liquidator and information to creditors on conversion from members' voluntary winding up (section 96)) in respect of the appointment of the liquidator, subject to rule 4.6 (order limiting disclosure of statement of affairs etc) and sub-paragraph (2).

(2) Any schedule required by rule 4.4(4)(b) (additional requirements as to statements of affairs) need not be inserted with the statement of affairs.

9

(1) The statement of affairs under rule 4.3 must be inserted as soon as reasonably practicable after the completion of the decision procedure or deemed consent procedure referred to in rule 4.14 (information to creditors and appointment of liquidator) in respect of the appointment of the liquidator, subject to rule 4.6 and sub-paragraph (2).

(2) Any schedule required by rule 4.4(4)(b) need not be inserted with the statement of affairs.

10

Any statement of concurrence under Part 4 of these Rules, subject to rule 4.6.

11

Any order for limited disclosure under rule 4.6(3) must be inserted as soon as reasonably practicable.

12

On discharge or variation of an order for limited disclosure under rule 4.6 as soon as reasonably practicable the full statement of affairs or statement of concurrence must be inserted (or so much of the statement as is no longer subject to the order).

13

A certificate of appointment of the liquidator by creditors or the company under rule 4.20.

14

The inventory and valuation of the assets of the company under rule 4.32.

15

(1) Each statement of affairs and each statement of concurrence under Part 5 of these Rules, subject to rule 5.16(3) and sub-paragraph (2).

(2) Any schedule required by rule 5.13(4)(b) with the statement of affairs need not be inserted.

16

Any order for limited disclosure under rule 5.16(3) must be inserted as soon as reasonably practicable.

17

On discharge or variation of an order for limited disclosure under rule 5.16 as soon as reasonably practicable the full statement of affairs or statement of concurrence must be inserted (or so much of the statement as is no longer subject to the order).

18

A certificate of appointment of the liquidator under rule 5.23.

19

The inventory and valuation of the assets of the company under rule 5.36.

20

Any transcript prepared of a public examination under section 133.

Common parts

21

Any petition for winding up or the appointment of any office-holder.

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