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The Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018

Type Statutory-Instrument

Publication 2018-10-11

Last updated 2021-10-01

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

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(c) be published as soon as reasonably practicable after the administrator has delivered the statement of proposals to the company’s creditors but not later than eight weeks (or such other period as may be agreed by the creditors or as the court may order) from the date on which the company entered administration.

(2) Where the court orders, on an application by the administrator under paragraph 107 of Schedule B1, an extension of the period in paragraph 49(5) of Schedule B1 for delivering copies of the statement of proposals, the administrator must as soon as reasonably practicable after the making of the order deliver a notice of the extension to—

(a) the creditors of the company;

(b) the members of the company of whose address the administrator is aware; and

(3) The notice must—

(a) identify the insolvency proceedings;

(b) state the date to which the court has ordered an extension; and

(4) The administrator is taken to comply with paragraph (2)(b) if the administrator publishes a notice complying with paragraph (5).

(5) The notice must—

(a) contain the information required by paragraph (3);

(b) be advertised in such manner as the administrator thinks fit;

(d) be published as soon as reasonably practicable after the administrator has delivered the notice of the extension to the company’s creditors.

Seeking approval of the administrator's proposals

3.38

(1) This rule applies where the administrator is required by paragraph 51 of Schedule B1[^f00043] to seek approval from the company’s creditors of the statement of proposals.

(2) The statement of proposals delivered under paragraph 49(4) of Schedule B1[^f00044] must be accompanied by a notice to the creditors of the decision procedure in accordance with rule 5.8.

(3) The administrator may seek approval from the creditors using the deemed consent procedure in which case the statement of proposals delivered under paragraph 49(4) must be accompanied by a notice complying with the requirements of rule 5.7.

(4) Where the administrator has made a statement under paragraph 52(1) and has not sought a decision on approval from creditors, the proposal will be deemed to have been approved unless a decision has been requested under paragraph 52(2)[^f00045].

(5) Where under paragraph (4) the proposal is deemed to have been approved the administrator must, as soon as reasonably practicable after the expiry of the period for requisitioning a decision set out in rule 5.17(2), deliver a notice of the date of deemed approval to the registrar of companies, the court and any creditor to whom the administrator has not previously delivered the proposal.

(6) The notice must contain—

(a) identification details for the insolvency proceedings;

(b) the name of the administrator;

(d) the date on which the statement of proposals was delivered to the creditors.

(7) A copy of the statement of proposals, with the statements required by rule 3.35(5) must accompany the notice given to the court and to any creditors to whom a copy of the statement of proposals has not previously been delivered.

Invitation to creditors to form a creditors' committee

3.39

(1) Where the administrator is required to seek a decision from the company’s creditors under paragraph 51 of Schedule B1, the administrator must at the same time deliver to the creditors a notice inviting them to decide whether a creditors’ committee should be established if sufficient creditors are willing to be members of the committee.

(2) The notice must also invite nominations for members of the committee, such nominations to be received by the administrator by a date to be specified in the notice.

(3) The notice must state that any nominations—

(a) must be delivered to the administrator by the specified date; and

(b) can only be accepted if the administrator is satisfied as to the creditor’s eligibility under rule 3.74.

(4) A notice under this rule must also be delivered to the creditors at any other time when the administrator seeks a decision by creditors and a creditors’ committee has not already been established at that time.

Notice of extension of time to seek approval

3.40

(1) Where the court orders an extension to the period set out in paragraph 51(2) of Schedule B1, the administrator must deliver a notice of the extension as soon as reasonably practicable to each person mentioned in paragraph 49(4) of Schedule B1.

(2) The notice must contain identification details for the insolvency proceedings and the date to which the court has ordered an extension.

(3) The administrator is taken to have complied with paragraph (1) as regards members of the company if the administrator publishes a notice complying with paragraph (4).

(4) The notice must—

(a) be advertised in such a manner as the administrator thinks fit;

(b) state that members may request in writing a copy of the notice of the extension, and state the address to which to write; and

(c) be published as soon as reasonably practicable after the administrator has delivered the notice of the extension to the company’s creditors.

Notice of the creditors' decision on the administrator's proposals (paragraph 53(2))

3.41

(1) In addition to delivering a report to the court and the registrar of companies (in accordance with paragraph 53(2) of Schedule B1) the administrator must deliver a report to—

(a) the company’s creditors (accompanied by a copy of the statement of proposals, with the statement required by rule 3.35(10)(a), if it has not previously been delivered to the creditor); and

(b) every other person to whom a copy of the statement of proposals was delivered.

(2) A report mentioned in paragraph (1) must contain—

(a) identification details for the insolvency proceedings;

(b) details of decisions taken by the creditors including details of any modifications to the proposals which were approved by the creditors; and

(3) A copy of the statement of proposals, with any statements required by rule 3.35(9) and (10), must accompany the report to the court.

Administrator's proposals: revision

3.42

(1) Where paragraph 54(1) of Schedule B1[^f00046] applies, the statement of the proposed revision which is required to be delivered to the creditors must be delivered together with a notice of the decision procedure in accordance with rule 5.8.

(2) The statement must identify the insolvency proceedings and include—

(a) any other trading names of the company;

(b) details of the administrator’s appointment, including—

(i) the date of appointment, and

(ii) the person making the application or appointment;

(c) the names of the directors and secretary of the company and details of any shareholdings in the company which they may have;

(d) a summary of the original proposals and the reason or reasons for proposing a revision;

(e) details of the proposed revision, including details of the administrator’s assessment of the likely impact of the proposed revision upon creditors generally or upon each class of creditors;

(f) where the proposed revision relates to the ending of the administration by a creditors’ voluntary winding up and the nomination of a person to be the proposed liquidator of the company—

(i) details of the proposed liquidator,

(ii) where applicable, the declaration required by section 231, and

(iii) a statement that the creditors may, before the proposals are approved, nominate a different person as liquidator in accordance with paragraph 83(7)(a) of Schedule B1 and rule 3.60(6)(b); and

(g) any other information that the administrator thinks necessary to enable creditors to decide whether or not to vote for the proposed revisions.

(3) The administrator may seek a decision using the deemed consent procedure in which case the statement of the proposed revision must be accompanied by a notice which complies with rule 5.7.

(4) The period within which, subject to paragraph 54(3) of Schedule B1, the administrator must send a copy of the statement to every member of the company of whose address the administrator is aware is five business days after sending the statement of the proposed revision to the creditors.

(5) Notice under paragraph 54(3) and (4) of Schedule B1 must—

(a) be advertised in such manner as the administrator thinks fit as soon as reasonably practicable after the administrator has sent the statement to the creditors; and

(b) state that members may request in writing a copy of the proposed revision, and state the address to which to write.

(6) A copy of the statement of revised proposals under rule 3.43(3) must be delivered to the registrar of companies not later than five days after the report under rule 3.43(1) is delivered.

Notice of result of creditors' decision on revised proposals (paragraph 54(6))

3.43

(1) In addition to delivering a report to the court and the registrar of companies (in accordance with paragraph 54(6) of Schedule B1) the administrator must deliver a report to—

(a) the company’s creditors (accompanied by a copy of the original statement of proposals and the revised statement of proposals if the administrator had not delivered notice of the decision procedure or deemed consent procedure to the creditor); and

(b) every other person to whom a copy of the original statement of proposals was delivered.

(2) A report mentioned in paragraph (1) must contain—

(a) identification details for the insolvency proceedings;

(b) the date of the revised proposals;

(c) details of decisions taken by the creditors including details of any modifications to the revised proposals which were approved by the creditors; and

(d) the date such decisions were made.

(3) A copy of the statement of revised proposals must accompany the notice to the court.

CHAPTER 8 — Limited disclosure of statements of affairs and proposals

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

Application of Chapter

3.44

This Chapter applies to the disclosure of information which would be likely to prejudice the conduct of the administration or might reasonably be expected to lead to violence against any person.

Orders limiting disclosure of statement of affairs etc.

3.45

(1) If the administrator thinks that the circumstances in rule 3.44 apply in relation to the disclosure of—

(a) the whole or part of the statement of affairs;

(b) any of the matters specified in rule 3.35(1)(h) and (i); or

the administrator may apply to the court for an order in relation to the particular document or a specified part of it.

(2) The court may order that the whole of or a specified part of a document referred to in paragraph (1)(a) to (c) must not be delivered to the registrar of companies or, in the case of the statement of proposals, to creditors or members of the company.

(3) The administrator must as soon as reasonably practicable deliver to the registrar of companies—

(a) a copy of the order;

(b) the statement of affairs, the statement of proposals and any statement of concurrence to the extent provided by the order; and

(c) if the order relates to the statement of proposals, an indication of the nature of the matter in relation to which the order was made.

(4) If the order relates to the statement of proposals, the administrator must as soon as reasonably practicable also deliver to the creditors and members of the company—

(a) the statement of proposals to the extent provided by the order; and

(b) an indication of the nature of the matter in relation to which the order was made.

Order for disclosure by administrator

3.46

(1) A creditor may apply to the court for an order that the administrator disclose any of the following in relation to which an order has been made under rule 3.45(2)—

(a) a statement of affairs;

(b) a specified part of it;

(d) a statement of concurrence.

(2) The application must be supported by written evidence in the form of an affidavit.

(3) The applicant must deliver to the administrator notice of the application at least three business days before the hearing.

(4) In an order for disclosure, the court may include conditions as to confidentiality, duration, the scope of the order in the event of any change of circumstances or such other matters as it thinks just.

Discharge or variation of order for limited disclosure

3.47

(1) If there is a material change in circumstances rendering an order for limited disclosure under rule 3.45(2) wholly or partially unnecessary, the administrator must, as soon as reasonably practicable after the change, apply to the court for the order to be discharged or varied.

(2) If the court makes such an order, the administrator must as soon as reasonably practicable deliver to the registrar of companies—

(a) a copy of the order; and

(b) the statement of affairs, the statement of proposals and any statement of concurrence to the extent provided by the order.

(3) If the order relates to the statement of proposals, the administrator must as soon as reasonably practicable also deliver to the creditors and members the statement of proposals to the extent allowed by the order.

Publication etc. of statement of affairs or statements of proposals

3.48

(1) If, after the administrator has sent a statement of proposals under paragraph 49(4) of Schedule B1, a statement of affairs is delivered to the registrar of companies in accordance with rule 3.47(2) as the result of the discharge or variation of an order, the administrator must deliver to the creditors a copy or summary of the statement of affairs as delivered to the registrar of companies.

(2) The administrator is taken to comply with the requirements for delivery to members of the company in rule 3.45(4) or 3.47(3) if the administrator publishes the required notice.

(3) The required notice must—

(a) be advertised in such manner as the administrator thinks fit;

(b) state that members can request in writing—

(i) a copy of the statement of proposals to the extent provided by the order, and

(ii) an indication of the nature of the matter in relation to which the order was made;

(d) be published as soon as reasonably practicable after the administrator has delivered the statement of proposals to the extent provided by the order to the company’s creditors.

CHAPTER 9 — Disposal of secured property

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

Disposal of secured property

3.49

(1) This rule applies where the administrator applies to the court under paragraph 71 or 72 of Schedule B1 for authority to dispose of—

(a) property which is subject to a security other than a floating charge; or

(b) goods in the possession of the company under a hire-purchase agreement.

(2) The court must fix a venue for the hearing of the application.

(3) As soon as reasonably practicable after the court has done so, the administrator must deliver notice of the venue to the holder of the security or the owner of the goods.

(4) If an order is made under paragraph 71 or 72 of Schedule B1, the court must deliver two copies of the order certified by the court to the administrator.

(5) The administrator must deliver—

(a) one of the certified copies to the holder of the security or the owner of the goods; and

(b) a copy of the certified order to the registrar of companies.

CHAPTER 10 — Expenses of the Administration

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

Expenses

3.50

(1) All fees, costs, charges and other expenses incurred in the course of the administration are to be treated as expenses of the administration.

(2) The expenses associated with the prescribed part must be paid out of the prescribed part.

(3) The cost of the caution required by section 390(3) for the proper performance of the administrator’s functions is an expense of the administration.

Order of priority

3.51

(1) Where there is a former administrator, the former administrator’s remuneration and expenses as determined in accordance with rule 3.98 are payable in priority to the expenses in this rule.

(2) Subject to paragraph (1) and to any court order under paragraph (3) the expenses of the administration are payable in the following order of priority—

(a) expenses properly incurred by the administrator in performing the administrator’s functions;

(b) the cost of any caution provided by the administrator in accordance with the Act or these Rules;

(c) where an administration order was made, the expenses of the applicant and any person appearing on the hearing of the application whose expenses were allowed by the court;

(d) where the administrator was appointed otherwise than by order of the court—

(i) the costs and expenses of the appointer in connection with the making of the appointment, and

(ii) the costs and expenses incurred by any other person in giving notice of intention to appoint an administrator;

(e) any amount payable to a person in respect of assistance in the preparation of a statement of affairs or statement of concurrence;

(f) any allowance made by order of the court in respect of the costs on an application for release from the obligation to submit a statement of affairs or deliver a statement of concurrence;

(g) any necessary disbursements by the administrator in the course of the administration (including any costs referred to in Articles 30 or 59 of the EU Regulation and expenses incurred by members of the creditors’ committee or their representatives and allowed for by the administrator under rule 3.90 but not including any payment of corporation tax in circumstances referred to in sub-paragraph (j) below);

(h) the remuneration or emoluments of any person who has been employed by the administrator to perform any services for the company, as required or authorised under the Act or these Rules;

(i) the administrator’s remuneration the basis of which has been fixed under Chapter 14 of this Part of these Rules and unpaid pre-administration costs approved under rule 3.52; and

(j) the amount of any corporation tax on chargeable gains accruing on the realisation of any asset of the company (irrespective of the person by whom the realisation is effected).

(3) If the assets are insufficient to satisfy the liabilities, the court may make an order as to the payment out of the assets of the expenses incurred in the administration in such order of priority as the court thinks just.

Pre-administration costs

3.52

(1) Where the administrator has made a statement of pre-administration costs under rule 3.35(10)(a), the creditors’ committee may determine whether and to what extent the unpaid pre-administration costs set out in the statement are approved for payment.

(2) Paragraph (3) applies where—

(a) there is no creditors’ committee;

(b) there is a creditors’ committee but it does not make the necessary determination; or

(c) the creditors’ committee does make the necessary determination but the administrator or other insolvency practitioner who has charged fees or incurred expenses as pre-administration costs considers the amount determined to be insufficient.

(3) When this paragraph applies, determination of whether and to what extent the unpaid pre-administration costs are approved for payment must be—

(a) by a decision of the creditors through a decision procedure other than in a case falling in sub-paragraph (b); or

(b) in a case where the administrator has made a statement under paragraph 52(1)(b) of Schedule B1, by-

(i) the consent of each of the secured creditors, or

(ii) if the administrator has made, or intends to make, a distribution to preferential creditors, by

(aa) the consent of each of the secured creditors, and

(bb) a decision of the preferential creditors in a decision procedure.

(4) The administrator must call a meeting of the creditors’ committee or seek a decision of creditors by a decision procedure if so requested for the purposes of paragraphs (1) to (3) by another insolvency practitioner who has charged fees or incurred expenses as pre-administration costs; and the administrator must deliver notice of the meeting or decision procedure (to creditors or preferential creditors as the case may be) within 28 days of receipt of the request.

(5) The administrator (where the fees were charged or expenses incurred by the administrator) or other insolvency practitioner (where the fees were charged or expenses incurred by that practitioner) may apply to the court for a determination of whether and to what extent the unpaid pre-administration costs are approved for payment if either—

(a) there is no determination under paragraph (1) or (3); or

(b) there is such a determination but the administrator or other insolvency practitioner who has charged fees or incurred expenses as pre-administration costs considers the amount determined to be insufficient.

(6) Where there is a creditors’ committee the administrator or other insolvency practitioner must deliver at least 14 days’ notice of the hearing to the members of the committee and the committee may nominate one or more of its members to appear, or be represented, and to be heard on the application.

(7) If there is no creditors’ committee, notice of the application must be delivered to such one or more of the company’s creditors as the court may direct, and those creditors may nominate one or more of their number to appear or be represented, and to be heard on the application.

(8) The court may, if it appears to be a proper case, order the expenses of the application, including the costs of any member of the creditors’ committee appearing or being represented on it, or of any creditor so appearing or being represented, to be paid as an expense of the administration.

(9) Where the administrator fails to call a meeting of the creditors’ committee or seek a decision of creditors in accordance with paragraph (4), the other insolvency practitioner may apply to the court for an order requiring the administrator to do so.

CHAPTER 11 — Extension and ending of administration

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

Interpretation

3.53

“Final progress report” means in this Chapter, and in Chapter 14, a progress report which includes a summary of—

(a) the administrator’s proposals;

(b) any major amendments to, or deviations from, those proposals;

(d) the outcome.

3.54

(1) This rule applies where an administrator makes an application to the court for an order, or delivers a notice to the creditors requesting their consent, to extend the administrator’s term of office under paragraph 76(2) of Schedule B1.

(2) The application or the notice must state the reasons why the administrator is seeking an extension.

(3) A request to the creditors may contain or be accompanied by a notice that if the extension is granted a notice of the extension will be made available for viewing and downloading on a website and that no other notice will be delivered to the creditors.

(4) Where the result of a request to the creditors is to be made available for viewing and downloading on a website, the notice must comply with the requirements for use of a website to deliver documents set out in rule 1.44(2)(a) to (c), (3) and (4) with any necessary modifications and rule 1.44(5)(a) applies to determine the time of delivery of the document.

(5) Where the court makes an order extending the administrator’s term of office, the administrator must as soon as reasonably practicable deliver to the creditors a notice of the order together with the reasons for seeking the extension given in the application to the court.

(6) Where the administrator’s term of office has been extended with the consent of creditors, the administrator must as soon as reasonably practicable deliver a notice of the extension to the creditors except where paragraph (3) applies.

(7) The notice which paragraph 78(5)(b) of Schedule B1 requires to be delivered to the registrar of companies must also identify the insolvency proceedings.

Notice of automatic end of administration (paragraph 76 of Schedule B1)

3.55

(1) This rule applies where—

(a) the appointment of an administrator has ceased to have effect, and

(b) the administrator is not required by any other rule to give notice of that fact.

(2) The former administrator must, as soon as reasonably practicable, and in any event within five business days of the date on which the appointment has ceased, deliver to the registrar of companies and lodge with the court a notice accompanied by a final progress report.

(3) The notice must be headed “Notice of automatic end of administration” and identify the company immediately below the heading.

(4) The notice must contain—

(a) identification details for the insolvency proceedings;

(b) the former administrator’s name and address;

(d) the date of the appointment;

(e) the name of the person who made the appointment or the administration application, as the case may be;

(f) the date on which the appointment ceased to have effect;

(g) a statement that the appointment has ceased to have effect; and

(h) a statement that a copy of the final progress report accompanies the notice.

(5) The notice must be authenticated by the administrator and dated.

(6) A copy of the notice and accompanying final progress report must be delivered as soon as reasonably practicable to—

(a) the directors of the company; and

(b) all other persons to whom notice of the administrator’s appointment was delivered.

(7) A former administrator who defaults in complying with this rule is guilty of an offence.

Notice of end of administration when purposes achieved (paragraph 80(2) of Schedule B1)

3.56

(1) Where an administrator who was appointed under paragraph 14 or 22 of Schedule B1 thinks that the purpose of administration has been sufficiently achieved, the notice (“notice of end of administration”) which the administrator may lodge with the court and deliver to the registrar of companies under paragraph 80(2) of Schedule B1 must be headed “Notice of end of administration” and identify the company immediately below the heading.

(2) The notice must contain—

(a) identification details for the insolvency proceedings;

(b) the administrator’s name and address;

(d) the date of the appointment;

(e) the name of the person who made the appointment or the administration application, as the case may be;

(f) a statement that the administrator thinks that the purpose of the administration has been sufficiently achieved;

(g) a statement that a copy of the final progress report accompanies the notice; and

(h) a statement that the administrator is lodging the notice with the court and delivering a copy to the registrar of companies.

(3) The notice must be authenticated by the administrator and dated.

(4) The notice must be accompanied by a final progress report.

(5) The notice lodged with the court must also be accompanied by a copy of the notice.

(6) The court must endorse the notice and the copy with the date and time of lodging, certify the copy and deliver it to the administrator.

(7) The prescribed period within which the administrator, under paragraph 80(4)[^f00047] of Schedule B1, must send a copy of the notice to the creditors is five business days from the lodging of the notice.

(8) The copy of the notice sent to creditors must be accompanied by the final progress report.

(9) The administrator must within the same period deliver a copy of the notice and the final progress report to all other persons (other than the creditors and the registrar of companies) to whom notice of the administrator’s appointment was delivered.

(10) The administrator is taken to have complied with the requirement in paragraph 80(4) of Schedule B1 to give notice to the creditors if, within five business days of lodging the notice with the court, the administrator gazettes a notice which—

(a) states that the administration has ended, and the date on which it ended;

(b) undertakes that the administrator will provide a copy of the notice of end of administration to any creditor of the company who applies in writing; and

(11) The Gazette notice may be advertised in such other manner as the administrator thinks fit.

Administrator's application for order ending administration (paragraph 79 of Schedule B1)

3.57

(1) An application to court by the administrator under paragraph 79 of Schedule B1[^f00048] for an order ending an administration must be accompanied by—

(a) a progress report for the period since—

(i) the last progress report (if any), or

(ii) if there has been no previous progress report, the date on which the company entered administration;

(b) a statement indicating what the administrator thinks should be the next steps for the company (if applicable); and

(c) where the administrator makes the application because of a requirement decided by the creditors, a statement indicating with reasons whether or not the administrator agrees with the requirement.

(2) Where the application is made other than because of a requirement by a decision of the creditors—

(a) the administrator must, at least five business days before the application is made, deliver notice of the administrator’s intention to apply to court to—

(i) the person who made the administration application or appointment, and

(ii) the creditors; and

(b) the application must be accompanied by—

(i) a statement that notice has been delivered to the creditors, and

(ii) copies of any response from creditors to that notice.

(3) Where the application is in conjunction with a petition under section 124 for an order to wind up the company, the administrator must, at least five business days before the application is made, deliver notice to the creditors as to whether the administrator intends to seek appointment as liquidator.

Creditors' application for order ending administration (paragraph 81 of Schedule B1)

3.58

(1) Where a creditor applies to the court under paragraph 81 of Schedule B1 for an order ending an administration, a copy of the application must be delivered, not less than five business days before the date fixed for the hearing, to—

(a) the administrator;

(b) the person who made the administration application or appointment; and

(c) where the appointment was made under paragraph 14 of Schedule B1, the holder of the floating charge by virtue of which the appointment was made (if different to (b)).

(2) Any of those persons may appear at the hearing of the application.

(3) Where the court makes an order under paragraph 81 of Schedule B1 ending the administration, the court must deliver a copy of the order to the administrator.

Notice by administrator of court order

3.59

Where the court makes an order ending the administration, the administrator must as soon as reasonably practicable deliver a copy of the order and of the final progress report to—

(a) the registrar of companies;

(b) the directors of the company; and

Moving from administration to creditors' voluntary winding up (paragraph 83 of Schedule B1)

3.60

(1) This rule applies where the administrator delivers to the registrar of companies a notice under paragraph 83(3) of Schedule B1[^f00049] of moving from administration to creditors’ voluntary winding up.

(2) The notice must contain—

(a) identification details for the insolvency proceedings;

(b) the name of the person who made the appointment or the administration application, as the case may be; and

(3) The notice to the registrar of companies must be accompanied by a copy of the administrator’s final progress report.

(4) A copy of the notice and the final progress report must be sent as soon as reasonably practicable after delivery of the notice to all those persons to whom notice of the administrator’s appointment was delivered in addition to the creditors (as required by paragraph 83(5)(b)).

(5) The person who ceases to be administrator on the registration of the notice must inform the person who becomes liquidator of anything which happens after the date of the final progress report and before the registration of the notice which the administrator would have included in the final report had it happened before the date of the report.

(6) For the purposes of paragraph 83(7)(a) of Schedule B1, a person is nominated by the creditors as liquidator by—

(a) their approval of the statement of the proposed liquidator in the administrator’s proposals or revised proposals; or

(b) their nomination of a different person, through a decision procedure, before their approval of the proposals or revised proposals.

(7) Where the creditors nominate a different person, the nomination must, where applicable, include the declaration required by section 231.

Moving from administration to dissolution (paragraph 84 of Schedule B1)

3.61

(1) This rule applies where the administrator delivers to the registrar of companies a notice under paragraph 84(1) of Schedule B1 of moving from administration to dissolution.

(2) The notice must contain identification details for the insolvency proceedings.

(3) As soon as reasonably practicable after sending the notice, the administrator must deliver a copy of the notice to all persons to whom notice of the administrator’s appointment was delivered (in addition to the creditors mentioned in paragraph 84(5)(b) of Schedule B1[^f00050]).

(4) A final progress report must accompany the notice to the registrar of companies and every copy filed or otherwise delivered.

(5) Where a court makes an order under paragraph 84(7) of Schedule B1 it must, where the applicant is not the administrator, deliver a copy of the order to the administrator.

(6) The administrator must deliver a copy of the order to the registrar of companies with the notice required by paragraph 84(8) of Schedule B1.

CHAPTER 12 — Replacing the administrator

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

Grounds for resignation

3.62

(1) The administrator may resign—

(a) on grounds of ill health;

(b) because of the intention to cease to practise as an insolvency practitioner; or

(i) a conflict of interest, or

(ii) a change of personal circumstances.

(2) The administrator may, with the permission of the court, resign on other grounds.

Notice of intention to resign

3.63

(1) The administrator must give at least five business days’ notice of intention—

(a) to resign in a case falling within rule 3.62(1); or

(b) to apply for the court’s permission to resign in a case falling within rule 3.62(2).

(2) The notice must contain—

(a) identification details for the insolvency proceedings;

(b) the date of the appointment of the administrator; and

(3) The notice must also contain—

(a) the date with effect from which the administrator intends to resign; or

(b) where the administrator was appointed by an administration order, the date on which the administrator intends to lodge with the court an application for permission to resign.

(4) Notice must be delivered—

(a) to any continuing administrator of the company;

(b) to the creditors’ committee (if any);

(i) the company, and

(ii) the company’s creditors;

(d) to the member State liquidator appointed in relation to the company (if there is one);

(e) where the administrator was appointed by the holder of a qualifying floating charge under paragraph 14 of Schedule B1, to—

(i) the person who appointed the administrator, and

(ii) all holders of prior qualifying floating charges;

(f) where the administrator was appointed by the company or the directors of the company under paragraph 22 of Schedule B1, to—

(i) the appointer, and

(ii) all holders of qualifying floating charges.

(5) The notice must be accompanied by a summary of the administrator’s receipts and payments.

Notice of resignation (paragraph 87 of Schedule B1)

3.64

(1) A resigning administrator must, within five business days of delivering the notice under paragraph 87(2) of Schedule B1, deliver a copy of the notice to—

(a) the registrar of companies;

(b) all persons, other than the person who made the appointment, to whom notice of intention to resign was delivered under rule 3.63; and

(2) The notice must contain—

(a) identification details for the insolvency proceedings;

(b) the date of the appointment of the administrator; and

(3) The notice must state—

(a) the date from which the resignation is to have effect; and

(b) where the resignation is with the permission of the court, the date on which permission was given.

(4) Where an administrator was appointed by an administration order, notice of resignation under paragraph 87(2)(a) of Schedule B1 must be given by lodging the notice with the court.

Application to court to remove administrator from office

3.65

(1) An application for an order under paragraph 88 of Schedule B1 that the administrator be removed from office must state the grounds on which the order is requested.

(2) A copy of the application must be delivered, not less than five business days before the date fixed for the hearing—

(a) to the administrator;

(b) to the person who—

(i) made the application for the administration order, or

(ii) appointed the administrator;

(d) to any continuing administrator of the company; and

(e) where there is neither a creditors’ committee nor a continuing administrator appointed, to the company and the creditors, including any floating charge holders.

(3) The court must deliver to the applicant a copy of any order removing the administrator.

(4) The applicant must deliver a copy of the order—

(a) as soon as reasonably practicable, and in any event within five business days of the copy order being delivered, to the administrator; and

(b) within five business days of the copy order being delivered, to—

(i) all other persons to whom notice of the application was delivered, and

(ii) the registrar of companies.

Notice of vacation of office when administrator ceases to be qualified to act

3.66

An administrator who has ceased to be qualified to act as an insolvency practitioner in relation to the company and gives notice in accordance with paragraph 89 of Schedule B1 must also deliver notice to the registrar of companies.

Deceased administrator

3.67

(1) If the administrator dies a notice of the fact and date of death must be lodged with the court.

(2) The notice must be lodged as soon as reasonably practicable by one of the following—

(a) a surviving administrator;

(b) a member of the deceased administrator’s firm (if the deceased was a member or employee of a firm);

(d) the executor of the deceased administrator.

(3) If such a notice has not been lodged within the 21 days following the administrator’s death, any other person may lodge the notice.

(4) The person who lodges the notice must also deliver a notice to the registrar of companies which contains—

(a) identification details for the insolvency proceedings;

(b) the name of the person who made the appointment or the administration application, as the case may be;

(d) the fact and date of death.

Application to replace

3.68

(1) Where an application to court is made under paragraph 91(1) or 95 of Schedule B1 to appoint a replacement administrator, the application must be accompanied by the proposed replacement administrator’s consent to act.

(2) Where the application is made under paragraph 91(1), a copy of the application must be delivered—

(a) to the person who made the application for the administration order;

(b) to any person who has appointed a receiver of the company;

(d) to any person who is or may be entitled to appoint an administrator of the company under paragraph 14 of Schedule B1;

(e) to any receiver of the company;

(f) if there is pending a petition for the winding up of the company, to—

(i) the petitioner, and

(ii) any provisional liquidator;

(g) to any member State liquidator appointed in main proceedings in relation to the company;

(h) to the company, if the application is made by anyone other than the company;

(i) to any supervisor of any CVA in relation to the company; and

(j) to the proposed administrator.

(3) Rules 3.10, 3.11 and 3.13(1) and (2) apply to applications made under paragraph 91(1) and 95 of Schedule B1, with any necessary modifications.

Appointment of replacement or additional administrator

3.69

Where a replacement administrator is appointed or an additional administrator is appointed to act—

(a) the following apply—

(i) rule 3.17 the requirement as to the heading in paragraph (1) and paragraphs (1)(a) to (f), and (2),

(ii) rule 3.18 paragraphs (1)(a) and (b)(ii), (2) and (3),

(iii) rule 3.24 paragraphs (1)(a) to (d) and (2),

(iv) rule 3.25 paragraphs (1), (2)(a) to (c) and (3),

(v) rule 3.26 paragraphs (1)(a), (3) and (4), and

(vi) rule 3.27 paragraphs (1), (2)(a) and (b), (3) and (4).

(b) the replacement or additional administrator must deliver notice of the appointment to the registrar of companies; and

(c) all documents must clearly identify the appointment as of a replacement administrator or an additional administrator.

Administrator's duties on vacating office

3.70

(1) An administrator who ceases to be in office as a result of removal, resignation or ceasing to be qualified to act as an insolvency practitioner in relation to the company must as soon as reasonably practicable deliver to the person succeeding as administrator—

(a) the assets (after deduction of any expenses properly incurred and distributions made by the departing administrator);

(b) the records of the administration, including correspondence, statements of claim and documentary evidence of debt and other documents relating to the administration while it was within the responsibility of the departing administrator; and

(2) An administrator who makes default in complying with this rule is guilty of an offence.

CHAPTER 13 — Creditors' Committees

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

(2) see sections 215 and 362 of the Financial Services and Markets Act 2000[^f00051] 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.]

Scope

3.71

This Chapter applies to the establishment and operation of a creditors’ committee in an administration (“creditors’ committee”).

Functions of a creditors' committee

3.72

In addition to any functions conferred on a creditors’ committee by any provision of the Act or any other provision of these Rules, the creditors’ committee is to—

(a) assist the administrator in discharging the administrator’s functions; and

(b) act in relation to the administrator in such manner as may from time to time be agreed.

Number of members of a creditors' committee

3.73

A creditor’s committee must have at least three members but not more than five members.

Eligibility for membership of creditors' committee

3.74

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

(a) the person has submitted a statement of claim and, where not dispensed with under rules 5.26(2) or 3.105(2), documentary evidence of debt;

(b) the debt is not fully secured; 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) A body corporate or a partnership may be a member of a creditors’ committee, but it cannot act otherwise than by a representative appointed under rule 3.84.

Establishment of creditors' committees

3.75

(1) Where creditors decide that a creditors’ committee should be established, the convener or chair of the decision procedure or the convenor of the deemed consent process, if not the administrator, must—

(a) as soon as reasonably practicable deliver a notice of the decision to the administrator; and

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

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

(3) A person’s proxy-holder attending a meeting establishing the creditors’ committee or, in the case of a corporation 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 creditors’ committee but not as to its membership, the administrator must seek a decision from the creditors as to membership of the creditors’ committee.

(5) The creditors’ committee is not established (and accordingly cannot act) until the administrator has sent a notice of its membership in accordance with paragraph (9).

(6) The notice must contain the following—

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

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

(7) The notice must be authenticated and dated by the administrator.

(8) The administrator must, as soon as reasonably practicable, deliver the notice after the minimum number of persons required by rule 3.73 have agreed to act as members and been elected.

(9) The administrator must, as soon as reasonably practicable, deliver the notice to the registrar of companies.

Notice of change of membership of a committee

3.76

(1) If there is a change in membership of the creditors’ committee, the administrator must deliver a notice to the registrar of companies, 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 administrator.

Vacancies: members of creditors' committee

3.77

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

(2) A vacancy need not be filled if—

(a) the administrator and a majority of the remaining members agree; and

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

(3) The administrator may appoint a creditor, who is qualified under rule 3.74 to be a member of the committee, to fill a vacancy or as an additional member of the committee, if—

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

(b) the creditor agrees to act.

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

(5) Alternatively, the administrator may seek a decision by 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 administrator, the chair or convener must report the appointment to the administrator.

Resignation

3.78

A member of a creditors’ committee may resign by informing the administrator in writing.

Termination of membership

3.79

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

(a) becomes bankrupt or that person’s estate is sequestrated, in which case the trustee in bankruptcy or the trustee in sequestration, as the case may be, 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 three 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 3.74 for eligibility to be a member of the creditors’ committee; or

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

Removal

3.80

A member of a creditors’ committee may be removed by a decision of the creditors through a decision procedure.

Meetings of creditors' committee

3.81

(1) Meetings of the creditors’ committee must be held when and where determined by the administrator.

(2) The administrator must call a first meeting of the creditors’ committee to take place within six weeks of the creditors’ committee’s establishment.

(3) After the calling of the first meeting, the administrator must call a meeting—

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

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

(4) The administrator must give five business days’ notice of the venue of a meeting to each member of the creditors’ 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

3.82

The chair at a meeting of a creditors’ committee must be the administrator or an appointed person.

Quorum

3.83

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

Committee members' representatives

3.84

(1) A member of the creditors’ committee may, in relation to the business of the creditors’ 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 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

3.85

(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

3.86

(1) The administrator may seek to obtain the agreement of the creditors’ 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 creditors’ committee may, within five business days from the delivery of details of the proposed resolution, require the administrator to summon a meeting of the creditors’ committee to consider the matters raised by the proposed resolution.

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

Remote attendance at meetings of creditors' committee

3.87

(1) Where the administrator considers it appropriate, a meeting of a creditors’ committee 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 administrator must make whatever arrangements the administrator 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 administrator proposes to enable persons to exercise their rights to speak or vote where in the reasonable opinion of the administrator—

(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 administrator must have regard to the legitimate interests of the creditors’ 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 administrator must specify a place for the meeting if at least one member of the creditors’ committee requests the administrator to do so in accordance with rule 3.88.

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

3.88

(1) This rule applies to a request to the administrator under rule 3.87 to specify a place for the meeting.

(2) The request must be made within three business days of the date on which the administrator delivered the notice of the meeting in question.

(3) Where the administrator considers that the request has been properly made in accordance with this rule, the administrator 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 seven 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 administrator has specified a place for the meeting in response to a request under rule 3.87(8), the chair of the meeting must attend the meeting by being present in person at that place.

Notice requiring administrator to attend the creditors’ committee (paragraph 57(3)(a) of Schedule B1)

[Note: in an administration paragraph 57(3) of Schedule B1 enables the creditors’ committee to require the administrator to provide the committee with information]

3.89 1 This rules applies where a creditors’ committee in an administration resolves under paragraph 57(3)(a) of Schedule B1 to require the attendance of the administrator. 2 The notice delivered to the administrator requiring the administrator’s attendance must be— a accompanied by a copy of the resolution; and b authenticated by a member of the creditors’ committee. 3 A member’s representative may authenticate the notice for the member. 4 The meeting at which the administrator’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 administrator determines. 5 Where the administrator so attends, the creditors’ committee may elect one of their number to be chair of the meeting in place of the administrator or the appointed person.

Expenses of members etc.

3.90

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

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

Dealings by creditors’ committee members and others

3.91

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

(2) 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

3.92

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

CHAPTER 14 — Reporting and Remuneration

Progress reports

3.93

(1) The administrator must—

(a) within six weeks after the end of each accounting period; and

(b) within six weeks after the administrator ceases to act as administrator,

send to the court and to the registrar of companies, and to each creditor, a progress report.

(2) For the purposes of this Chapter, “accounting period” in relation to an administration is to be construed as follows:

(a) the first accounting period is the period of six months beginning with the date on which the company entered administration; and

(b) any subsequent accounting period is the period of six months beginning with the end of the last accounting period except that—

(i) where the administrator and the creditors’ committee agree, or

(ii) where there is no creditors’ committee, the court determines,

the accounting period is to be such other period beginning with the end of the last accounting period as may be agreed or, as the case may be determined, it is to be that other period.

(3) An administrator who fails to deliver a progress report within the time periods referred to in paragraph (1) is guilty of an offence.

(4) The court may, on the application of the administrator, extend either or both of the periods of six weeks referred to in paragraph (1) of this rule.

Progress reports: content

3.94

(1) The administrator’s progress report must include—

(a) identification details for the insolvency proceedings;

(b) identification and contact details for the administrator;

(c) the date of appointment of the administrator and any changes in the administrator in accordance with paragraphs (4) and (5);

(d) details of any extensions to the initial period of appointment;

(e) details of progress during the period of the report in accordance with paragraph (2):

(f) details of what assets remain to be realised;

(g) where a distribution is to be made in accordance with Chapter 15 in respect of an accounting period, the scheme of division; and

(h) any other relevant information for the creditors.

(2) The details of the progress during the period of the report must include—

(a) a receipts and payments account stating what assets of the company have been realised, for what value, and what payments have been made to creditors, in the form of a summary showing—

(i) receipts and payments during the relevant accounting period, or

(ii) where the administrator has ceased to act, receipts and payments during the period from the end of the last accounting period to the time when the administrator ceased to act (or, where the administrator has made no previous progress report, receipts and payments in the period since the administrator’s appointment); or

(b) where—

(i) no claim for outlays and remuneration is submitted under rule 3.95, or

(ii) a claim for outlays and remuneration is submitted under rule 3.95 but no determination fixing the amount of outlays and remuneration in accordance with rule 3.96(1) has been made in respect of such a claim—

(aa) a receipts and payments account which meets the requirements of paragraph (2)(a),

(bb) an estimate of the remuneration due to the administrator during the accounting period together with the basis or bases set out in rule 3.97 on which the estimate is based,

(cc) where remuneration due is not yet determined from the immediately preceding accounting period, an estimate of the remuneration due during that period, and

(dd) any outlays incurred.

(3) The receipts and payments account in a final progress report must include a statement as to the amount paid to unsecured creditors by virtue of the application of section 176A.

(4) A change in the administrator is only required to be shown in the next report after the change.

(5) However if the current administrator is seeking the repayment of pre-administration expenses from a former administrator, the change in administrator must continue to be shown until the next report after the claim is settled.

(6) This rule is without prejudice to the requirements of Chapter 15.

Administrator's outlays and remuneration: claims

3.95

(1) Where an administrator intends to submit a claim for the outlays reasonably incurred by the administrator and for remuneration within two weeks after the end of an accounting period, the administrator must submit to the creditors’ committee or, if there is no creditors’ committee, make available to creditors for the purposes of a decision procedure in respect of that period—

(a) the administrator’s accounts of their intromissions with the company’s assets;

(b) where funds are available after making allowance for contingencies, a scheme of division of the divisible funds; and

(i) any outlays reasonably incurred by the administrator, and

(ii) the administrator’s remuneration.

(2) The administrator may, at any time within two weeks after the end of an accounting period, in respect of the previous accounting period, submit to a creditors’ committee, or if there is no creditors’ committee, seek approval from creditors through a decision procedure for—

(a) the administrator’s accounts of its intromissions with the company’s assets for audit (such accounts of intromissions may include or consist of a progress report in terms of rules 3.93 and 3.94);

(b) the outlays reasonably incurred by the administrator; and

(3) The administrator may, at any time before the end of an accounting period submit to the creditors’ committee or, if there is no creditors’ committee, seek approval from creditors through a decision procedure for, an interim claim in respect of that period—

(a) for the outlays reasonably incurred by the administrator; and

(b) for the administrator’s remuneration.

(4) If the administrator submits such an interim claim, the creditors’ committee, or the creditors by decision procedure as the case may be may issue an interim determination in relation to the amount of the outlays and remuneration payable to the administrator, and where they do so, they must take into account that interim determination when issuing their determination under paragraph 3.96(1)(a)(ii).

Administrator's outlays and remuneration: determination

3.96

(1) Within six weeks after the end of an accounting period—

(a) the creditors’ committee or, if there is no creditors’ committee, the creditors through a decision procedure—

(i) may audit the accounts submitted or made available under rule 3.95(1)(a), and

(ii) must issue a determination fixing the amount of the outlays and remuneration payable to the administrator; and

(b) the administrator must make the accounts submitted for audit, scheme of division and determination of the amount fixed under paragraph (1)(a)(ii) available for the inspection by the members of the company and the creditors.

(2) If the administrator’s remuneration and outlays have been fixed by determination of the creditors’ committee in accordance with paragraph (1)(a)(ii) and the administrator considers the amount to be insufficient, the administrator may request that it be increased by decision of the creditors by decision procedure.

(3) If the creditors’ committee fails to issue a determination in accordance with paragraph (1)(a)(ii), the administrator must seek a decision of the creditors through decision procedure (except in a case under paragraph (6)) and they must issue a determination in accordance with paragraph (1)(a)(ii).

(4) If the creditors fail to issue a determination by decision procedure in accordance with paragraph (3) then the administrator must submit the claim to the court and the court must issue a determination.

(5) In a case where the administrator has made a statement under paragraph 52(1)(b) of Schedule B1, a decision under paragraph (2) or a decision under rule 3.101 is taken to be passed if (and only if) passed by the approval of—

(a) each secured creditor of the company; or

(b) if the administrator has made, or proposes to make, a distribution to preferential creditors—

(i) each secured creditor of the company, and

(ii) a decision of the preferential creditors in a decision procedure.

(6) In a case where the administrator has made a statement under paragraph 52(1)(b) of Schedule B1, if there is no creditor’s committee, or the committee does not make the requisite determination in accordance with rule 3.96(1)(a)(ii) or 3.96(3), the administrator’s remuneration and outlays may be fixed (in accordance with this rule) by the approval of—

(a) each secured creditor of the company; or

(b) if the administrator has made, or proposes to make, a distribution to preferential creditors—

(i) each secured creditor of the company, and

(ii) a decision of the preferential creditors in a decision procedure.

(7) In fixing the amount of the administrator’s remuneration and outlays in respect of any accounting period, the creditors’ committee or, as the case may be, the creditors by decision procedure, may take into account any adjustment which the creditors’ committee or the creditors may wish to make in the amount of the remuneration and outlays fixed in respect of any earlier accounting period.

Administrator's remuneration: basis of remuneration

3.97

(1) The basis of the administrator’s remuneration must be fixed—

(a) as a percentage of the value of the company’s property with which the administrator has to deal;

(b) by reference to the work which was reasonably undertaken by the administrator and the administrator’s staff in attending to matters arising in the administration; or

(2) The basis of remuneration may be one or a combination of the bases set out in paragraph (1) and different bases or percentages agreed may be fixed in respect of different things done by the administrator or administrator’s staff.

Former administrator's outlays and remuneration

3.98

For the purposes of paragraph 99 of Schedule B1, the former administrator’s outlays and remuneration comprise those items set out in rule 3.51.

Appeal against fixing of remuneration.

3.99

(1) If the administrator considers that the remuneration or outlays fixed for the administrator by the creditors’ committee, or by decision of the creditors (including remuneration or outlays fixed under rule 3.96(6)) is insufficient, the administrator may apply to the court for an order increasing their amount or rate.

(2) The administrator must give at least 14 days’ notice of the administrator’s application to the members of the creditors’ committee, and the committee may nominate one or more members to appear or be represented, and to be heard, on the application.

(3) If there is no creditors’ committee, the administrator’s notice of the administrator’s application must be sent to such one or more of the company’s creditors as the court may direct, which creditors may nominate one or more of their number to appear or be represented and heard.

(4) The court may order the expenses of the administrator’s application, including the expenses of any member of the creditors’ committee appearing or being represented on it, or any creditor so appearing or being represented, to be paid as an expense of the administration.

Creditor's claim that remuneration is excessive

3.100

(1) If the administrator’s remuneration and outlays have been fixed by the creditors’ committee or by the creditors, any creditor or creditors of the company representing in value at least 25 percent of the creditors may apply to the court not later than eight weeks after the end of an accounting period for an order that the administrator’s remuneration or outlays be reduced on the grounds that they are, in all the circumstances, excessive.

(2) The court may make an order fixing the remuneration or outlays at a reduced amount or rate.

(3) The court may order the expenses of the creditor making the application to be paid as an expense of the administration.

Remuneration of joint administrators

3.101

Where there are joint administrators—

(a) it is for them to agree between themselves as to how the remuneration or outlays payable should be apportioned;

(b) if they cannot agree as to how the remuneration or outlays payable should be apportioned, any one of them may refer the issue for determination—

(i) by the court, or

(ii) by resolution of the creditors’ committee or a meeting of creditors.

CHAPTER 15 — Claims by and distributions to Creditors

Application and interpretation of Chapter

3.102

(1) This Chapter applies in any case where the administrator proposes to make a distribution to creditors or any class of them.

(2) Where the distribution is to a particular class of creditors, references in this Chapter are to be treated as, so far as the context requires, references to that class of creditors only.

Payments of dividends

3.103

(1) On the final determination of the remuneration under rules 3.95 to 3.100 the administrator must, subject to rule 3.117, pay to the creditors their dividends in accordance with the scheme of division.

(2) Any dividend—

(a) allocated to a creditor which is not cashed or uplifted; or

(b) dependent on a claim in respect of which an amount has been set aside under rule 3.117(7) or (8);

must be held by the administrator in an appropriate bank or institution in the name of the Accountant of Court and the deposit receipts transmitted to the Accountant of Court.

(3) If a creditor’s claim is revalued, the administrator may—

(a) in paying any dividend to that creditor, make such adjustment to it as the administrator considers necessary to take account of that revaluation; or

(b) require the creditor to repay to the administrator the whole or part of a dividend already paid to the creditor.

New administrator appointed

3.104

(1) If a new administrator is appointed in place of another, the former administrator must, as soon as reasonably practicable, transmit to the new administrator all the creditors’ claims which the former administrator has received, together with an itemised list of them.

(2) The new administrator must authenticate the list by way of receipt for the creditors’ claims and return it to the former administrator.

(3) From then on, all creditors’ claims must be sent to and retained by the new administrator.

Submission of claims

3.105

(1) A creditor, in order to obtain an adjudication as to the creditor’s entitlement to a dividend (so far as funds are available) out of the assets of the company in respect of any accounting period, must submit the creditor’s claim to the administrator not later than eight weeks before the end of the accounting period.

(2) A creditor must submit a claim by producing to the administrator—

(a) a statement of claim as described in paragraph (3); and

(b) documentary evidence of debt.

but the administrator may dispense with the requirement of sub-paragraph (b) in respect of any debt or any class of debt.

(3) The statement of claim must—

(a) be made out by, or under the direction of, the creditor and dated and authenticated by the creditor or a person authorised on the creditor’s behalf;

(b) state the creditor’s name and address;

(d) state the name and address of any person authorised to act on behalf of the creditor;

(e) state the total amount as at the date of the administration order claimed in respect of all debts;

(f) state whether or not the claim includes any outstanding uncapitalised interest;

(g) contain particulars of how and when the debt was incurred by the company;

(h) contain particulars of any security held, the date on which it was given and the value which the creditor puts on it;

(i) include details of any retention of title in relation to goods to which the debt relates;

(j) state the nature and amount of any preference under Schedule 6 to the Act[^f00052] claimed in respect of the debt;

(k) in the case of a member State liquidator creditor, specify and give details of underlying claims in respect of which the creditor is claiming;

(l) include any details of any document by reference to which the debt can be substantiated; and

(m) state the name, postal address and authority of the person authenticating the statement of claim and documentary evidence of debt (if someone other than the creditor).

(4) A claim submitted by a creditor, which has been accepted in whole or in part by the administrator for the purpose of drawing a dividend in respect of any accounting period, is to be deemed to have been resubmitted for the purpose of obtaining an adjudication as to the creditor’s entitlement to a dividend in respect of an accounting period or, as the case may be, any subsequent accounting period.

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The Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018

Seeking approval of the administrator's proposals

3.38

Invitation to creditors to form a creditors' committee

3.39

Notice of extension of time to seek approval

3.40

Notice of the creditors' decision on the administrator's proposals (paragraph 53(2))

3.41

Administrator's proposals: revision

3.42

Notice of result of creditors' decision on revised proposals (paragraph 54(6))

3.43

CHAPTER 8 — Limited disclosure of statements of affairs and proposals

Application of Chapter

3.44

Orders limiting disclosure of statement of affairs etc.

3.45

Order for disclosure by administrator

3.46

Discharge or variation of order for limited disclosure

3.47

Publication etc. of statement of affairs or statements of proposals

3.48

CHAPTER 9 — Disposal of secured property

Disposal of secured property

3.49

CHAPTER 10 — Expenses of the Administration

Expenses

3.50

Order of priority

3.51

Pre-administration costs

3.52

CHAPTER 11 — Extension and ending of administration

Interpretation

3.53

Application to extend an administration and extension by consent (paragraph 76(2) of Schedule B1)

3.54

Notice of automatic end of administration (paragraph 76 of Schedule B1)

3.55

Notice of end of administration when purposes achieved (paragraph 80(2) of Schedule B1)

3.56

Administrator's application for order ending administration (paragraph 79 of Schedule B1)

3.57

Creditors' application for order ending administration (paragraph 81 of Schedule B1)

3.58

Notice by administrator of court order

3.59

Moving from administration to creditors' voluntary winding up (paragraph 83 of Schedule B1)

3.60

Moving from administration to dissolution (paragraph 84 of Schedule B1)

3.61

CHAPTER 12 — Replacing the administrator

Grounds for resignation

3.62

Notice of intention to resign

3.63

Notice of resignation (paragraph 87 of Schedule B1)

3.64

Application to court to remove administrator from office

3.65

Notice of vacation of office when administrator ceases to be qualified to act

3.66

Deceased administrator

3.67

Application to replace

3.68

Appointment of replacement or additional administrator

3.69

Administrator's duties on vacating office

3.70

CHAPTER 13 — Creditors' Committees

Scope

3.71

Functions of a creditors' committee

3.72

Number of members of a creditors' committee

3.73

Eligibility for membership of creditors' committee