Session 2014 - 15
Internet Publications
Other Bills before Parliament


 
 

Public Bill Committee:                               

392

 

, continued

 
 

(b)    

in relation to the company’s creditors, the period of 14 days

 

ending with the end of the period mentioned in paragraph

 

8(3).

 

    (7B)  

Where under sub-paragraph (7) the nominee is given notice of

 

proposed modifications, the nominee must seek a decision from the

 

company’s creditors (using a qualifying decision procedure) as to

 

whether the proposed voluntary arrangement should be approved

 

with those modifications.”

 

    (20)  

In paragraph 32(1), after “a” insert “company”.

 

    (21)  

In paragraph 32, after sub-paragraph (1) insert—

 

  “(1A)  

Subject to sub-paragraph (2) the company’s creditors may, by a

 

qualifying decision procedure, decide to extend (or further extend)

 

the moratorium, with or without conditions.”

 

    (22)  

For paragraph 32(2) substitute—

 

    “(2)  

The moratorium may not be extended (or further extended) to a day

 

later than the end of the period of two months beginning with the

 

day after the last day of the period mentioned in paragraph 8(3).”

 

    (23)  

In paragraph 32(3)—

 

(a)    

for “At any meeting where” substitute “Where”;

 

(b)    

after “the meeting” insert “of the company or (as the case may be)

 

inform the company’s creditors”.

 

    (24)  

In paragraph 32(4)—

 

(a)    

after “a meeting” insert “of the company or informs the company’s

 

creditors,”;

 

(b)    

after “resolve” insert “, or (as the case may be) the creditors by a

 

qualifying decision procedure shall decide,”.

 

    (25)  

In paragraph 32(6) for “may resolve” substitute “of the company may resolve,

 

and the creditors by a qualifying decision procedure may decide,”.

 

    (26)  

In paragraph 33(3) for “At any meeting where” substitute “Where”.

 

    (27)  

In paragraph 35, for sub-paragraphs (1) and (2) substitute—

 

    “(1)  

This paragraph applies where in accordance with paragraph 32 a

 

meeting of the company resolves, or the company’s creditors

 

decide, that the moratorium be extended (or further extended).

 

    (1A)  

The meeting may resolve, and the company’s creditors may by a

 

qualifying decision procedure decide, that a committee be

 

established to exercise the functions conferred on it by the meeting

 

or (as the case may be) by the company’s creditors.

 

      (2)  

The meeting may resolve that such a committee be established only

 

if—

 

(a)    

the nominee consents, and

 

(b)    

the meeting approves an estimate of the expenses to be

 

incurred by the committee in the exercise of the proposed

 

functions.

 

    (2A)  

A decision of the company’s creditors that such a committee be

 

established has effect only if—

 

(a)    

the nominee consents, and


 
 

Public Bill Committee:                               

393

 

, continued

 
 

(b)    

the creditors by a qualifying decision procedure approve an

 

estimate of the expenses to be incurred by the committee in

 

the exercise of the proposed functions.”

 

    (28)  

In paragraph 36(2)—

 

(a)    

in paragraph (a) for “both meetings summoned under paragraph 29”

 

substitute “the meeting of the company summoned under paragraph 29

 

and by the company’s creditors”;

 

(b)    

in paragraph (b) for “creditors’ meeting summoned under that

 

paragraph” substitute “company’s creditors”.

 

    (29)  

In paragraph 36(3), (4)(a) and (5)(a) for “creditors’ meeting” substitute

 

“company’s creditors”.

 

    (30)  

In paragraph 37(2)—

 

(a)    

in paragraph (a) for “creditors’ meeting” substitute “time the creditors

 

decided to approve the voluntary arrangement”;

 

(b)    

in paragraph (b)(i) for the words from “at that” to “it)” substitute “in

 

the qualifying decision procedure by which the creditors’ decision to

 

approve the voluntary arrangement was made”.

 

    (31)  

In paragraph 37(5)(a)—

 

(a)    

omit “of the meetings”;

 

(b)    

after “30(3)” insert “and (4)”.

 

    (32)  

In paragraph 38(1)—

 

(a)    

in paragraph (a) for the words from “approved” to “effect” substitute

 

“which has taken effect under paragraph 37”;

 

(b)    

in paragraph (b) for “either of those meetings” substitute “the meeting

 

of the company summoned under paragraph 29, or in relation to the

 

relevant qualifying decision procedure”.

 

    (33)  

After paragraph 38(1) insert—

 

  “(1A)  

In this paragraph—

 

(a)    

the “relevant qualifying decision procedure” means the

 

qualifying decision procedure in which the creditors

 

decided whether to approve the voluntary arrangement;

 

(b)    

references to a decision made in the relevant qualifying

 

decision procedure include any other decision made in that

 

qualifying decision procedure.”

 

    (34)  

In paragraph 38(2)—

 

(a)    

in paragraph (a) for “either of the meetings” substitute “the meeting of

 

the company or in the relevant qualifying decision procedure”;

 

(b)    

in paragraph (b) for “at the creditors’ meeting” substitute “in the

 

relevant qualifying decision procedure”.

 

    (35)  

In paragraph 38(3)(a) after “30(3)” insert “and (4)”.

 

    (36)  

In paragraph 38(3)(b)—

 

(a)    

for “creditors’ meeting” substitute “relevant qualifying decision

 

procedure”;

 

(b)    

for “the meeting” substitute “the relevant qualifying decision

 

procedure”.

 

    (37)  

In paragraph 38(4)(a)(ii) for “in question” substitute “of the company, or in the

 

relevant qualifying decision procedure,”.

 

    (38)  

In paragraph 38(4)(b)—

 

(a)    

for “further meetings” substitute “a further company meeting”;

 

(b)    

after “(1)(b)” insert “and relating to the company meeting”;


 
 

Public Bill Committee:                               

394

 

, continued

 
 

(c)    

omit “or (as the case may be) creditors’”.

 

    (39)  

In paragraph 38(4), after paragraph (b) insert—

 

“(c)    

direct any person—

 

(i)    

to seek a decision from the company’s creditors

 

(using a qualifying decision procedure) as to whether

 

they approve any revised proposal for a voluntary

 

arrangement which the directors may make, or

 

(ii)    

in a case falling within sub-paragraph (1)(b) and

 

relating to the relevant qualifying decision procedure,

 

to seek a decision from the company’s creditors

 

(using a qualifying decision procedure) as to whether

 

they approve the original proposal.”

 

    (40)  

In paragraph 38(5), after “(4)(b)(i)” insert “or (c)(i)”.

 

    (41)  

In paragraph 38(6) and (7)(a), after “(4)(b)” insert “or (c)”.

 

    (42)  

In paragraph 38(9)—

 

(a)    

the words from “a decision” to the end become paragraph (a);

 

(b)    

in that paragraph (a), after “at a” insert “company”;

 

(c)    

after that paragraph (a) insert “, and

 

(b)    

a decision of the company’s creditors made in the

 

relevant qualifying decision procedure is not

 

invalidated by any irregularity in relation to the

 

relevant qualifying decision procedure.”

 

    (43)  

In paragraph 39(1) for the words from “approved” to the end substitute “has

 

taken effect under paragraph 37.”

 

    (44)  

In paragraph 40(5)—

 

(a)    

in paragraph (c), omit “creditors or”;

 

(b)    

after paragraph (c) insert—

 

“(ca)    

require a decision of the company’s creditors to be

 

sought (using a qualifying decision procedure) on

 

such matters as the court may direct,”.

 

    (45)  

For paragraph 44(8) substitute—

 

    “(8)  

The appropriate regulator must be given notice of any qualifying

 

decision procedure by which a decision of the company’s creditors

 

is sought for the purposes of this Schedule.

 

    (8A)  

The appropriate regulator, or a person appointed by the appropriate

 

regulator, may in the way provided for by the rules participate in

 

(but not vote in) any qualifying decision procedure by which a

 

decision of the company’s creditors is sought for the purposes of

 

this Schedule.”

 

    (46)  

Omit paragraph 44(9)(a).

 

    (47)  

In paragraph 44(17A)(b) for “sub-paragraph” substitute “sub-paragraphs (8A)

 

and”.

 

Administration

 

10  (1)  

Schedule B1 (administration) is amended as follows.

 

      (2)  

In paragraph 49(4)(b), after “company” insert “, other than an opted-out

 

creditor,”.

 

      (3)  

Omit paragraph 50 and the heading before it.

 

      (4)  

For the heading before paragraph 51 substitute “Consideration of

 

administrator’s proposals by creditors”.


 
 

Public Bill Committee:                               

395

 

, continued

 
 

      (5)  

In paragraph 51, for sub-paragraphs (1) to (3) substitute—

 

    “(1)  

The administrator must seek a decision from the company’s

 

creditors as to whether they approve the proposals set out in the

 

statement made under paragraph 49(1).

 

      (2)  

The initial decision date for that decision must be within the period

 

of 10 weeks beginning with the day on which the company enters

 

administration.

 

      (3)  

The “initial decision date” for that decision—

 

(a)    

if the decision is initially sought using the deemed consent

 

procedure, is the date on which a decision will be made if

 

the creditors by that procedure approve the proposals, and

 

(b)    

if the decision is initially sought using a qualifying decision

 

procedure, is the date on or before which a decision will be

 

made if it is made by that qualifying decision procedure

 

(assuming that date does not change after the procedure is

 

instigated).”

 

      (6)  

In paragraph 52(2), for the words from “summon” to “requested” substitute

 

“seek a decision from the company’s creditors as to whether they approve the

 

proposals set out in the statement made under paragraph 49(1) if requested to

 

do so”.

 

      (7)  

For paragraph 52(3) substitute—

 

    “(3)  

Where a decision is sought by virtue of sub-paragraph (2) the initial

 

decision date (as defined in paragraph 51(3)) must be within the

 

prescribed period.”

 

      (8)  

For the heading before paragraph 53 substitute “Creditors’ decision”.

 

      (9)  

In paragraph 53, for sub-paragraph (1) substitute—

 

    “(1)  

The company’s creditors may approve the administrator’s

 

proposals—

 

(a)    

without modification, or

 

(b)    

with modification to which the administrator consents.”

 

    (10)  

In paragraph 53(2)—

 

(a)    

for “After the conclusion of an initial creditors’ meeting the”

 

substitute “The”;

 

(b)    

after “taken” insert “by the company’s creditors”.

 

    (11)  

In paragraph 54(1)(a) for “at an initial creditors’ meeting” substitute “by the

 

company’s creditors”.

 

    (12)  

Omit paragraph 54(2)(a).

 

    (13)  

In paragraph 54(2)(b)—

 

(a)    

omit “with the notice of the meeting sent”;

 

(b)    

after “creditor” insert “who is not an opted-out creditor”.

 

    (14)  

For paragraph 54(2)(d) substitute—

 

“(d)    

seek a decision from the company’s creditors as to whether

 

they approve the proposed revision.”

 

    (15)  

For paragraph 54(5) substitute—

 

    “(5)  

The company’s creditors may approve the proposed revision—

 

(a)    

without modification, or

 

(b)    

with modification to which the administrator consents.”

 

    (16)  

In paragraph 54(6)—


 
 

Public Bill Committee:                               

396

 

, continued

 
 

(a)    

for “After the conclusion of a creditors’ meeting the” substitute “The”;

 

(b)    

after “taken” insert “by the company’s creditors”.

 

    (17)  

For paragraph 55(1) substitute—

 

    “(1)  

This paragraph applies where an administrator—

 

(a)    

reports to the court under paragraph 53 that a company’s

 

creditors have failed to approve the administrator’s

 

proposals, or

 

(b)    

reports to the court under paragraph 54 that a company’s

 

creditors have failed to approve a revision of the

 

administrator’s proposals.”

 

    (18)  

In the heading before paragraph 56, for “meetings” substitute “decisions”.

 

    (19)  

In paragraph 56(1), for “summon a creditors’ meeting”—

 

(a)    

in the first place, substitute “seek a decision from the company’s

 

creditors on a matter”;

 

(b)    

in the second place, substitute “do so”.

 

    (20)  

In paragraph 56(2), for “summon a creditors’ meeting” substitute “seek a

 

decision from the company’s creditors on a matter”.

 

    (21)  

In paragraph 57(1), for “A creditors’ meeting may” substitute “The company’s

 

creditors may, in accordance with the rules,”.

 

    (22)  

Omit paragraph 58 and the heading before it.

 

    (23)  

In paragraph 62, for the words from “may” to the end substitute “may—

 

(a)    

call a meeting of members of the company;

 

(b)    

seek a decision on any matter from the company’s

 

creditors.”

 

    (24)  

For paragraph 74(4)(c) substitute—

 

“(c)    

require a decision of the company’s creditors to be sought

 

on a matter;”.

 

    (25)  

For paragraph 78(1)(b) substitute—

 

“(b)    

if the company has unsecured debts, the unsecured

 

creditors of the company.”

 

    (26)  

For paragraph 78(2)(b)(ii) substitute—

 

“(ii)    

the preferential creditors of the company.”

 

    (27)  

After paragraph 78(2) insert—

 

  “(2A)  

Whether the company’s unsecured creditors or preferential

 

creditors consent is to be determined by the administrator seeking a

 

decision from those creditors as to whether they consent.”

 

    (28)  

Omit paragraph 78(3).

 

    (29)  

In paragraph 79(2)(c) for “a creditors’ meeting requires him to” substitute “the

 

company’s creditors decide that he must”.

 

    (30)  

In paragraph 80(4) after “company” insert “, other than an opted-out creditor,”.

 

    (31)  

In paragraph 83(5)(b) after “creditor” insert “, other than an opted-out

 

creditor,”.

 

    (32)  

In paragraph 84(5)(b) after “creditor” insert “, other than an opted-out

 

creditor,”.

 

    (33)  

In the heading before paragraph 97, for “meeting” substitute “decision”.

 

    (34)  

For paragraph 97(2) and (3) substitute—

 

    “(2)  

The administrator may be replaced by a decision of the creditors

 

made by a qualifying decision procedure.


 
 

Public Bill Committee:                               

397

 

, continued

 
 

      (3)  

The decision has effect only if, before the decision is made, the new

 

administrator has consented to act in writing.”

 

    (35)  

In paragraph 98(2)(b), for the second “resolution” substitute “decision”.

 

    (36)  

In paragraph 98(3)—

 

(a)    

after “as passed” insert “and a decision shall be taken as made”;

 

(b)    

after “if) passed” insert “or made”.

 

    (37)  

For paragraph 98(3)(b)(ii) substitute—

 

“(ii)    

the preferential creditors of the company.”

 

    (38)  

After paragraph 98(3) insert—

 

  “(3A)  

Whether the company’s preferential creditors give their approval is

 

to be determined by a decision of those creditors as to whether they

 

give their approval.

 

    (3B)  

In a case where the administrator is removed from office, that

 

decision must be made by a qualifying decision procedure.”

 

    (39)  

For paragraph 108(2)(b) substitute—

 

“(b)    

if the company has unsecured debts, the unsecured

 

creditors of the company.”

 

    (40)  

For paragraph 108(3)(b)(ii) substitute—

 

“(ii)    

the preferential creditors of the company.”

 

    (41)  

After paragraph 108(3) insert—

 

  “(3A)  

Whether the company’s unsecured creditors or preferential

 

creditors consent is to be determined by the administrator seeking a

 

decision from those creditors as to whether they consent.”

 

    (42)  

Omit paragraph 108(4).

 

    (43)  

In paragraph 111, omit the definitions of “correspondence” and “creditors’

 

meeting”.

 

11  (1)  

Schedule 10 (offences) is amended as follows.

 

      (2)  

In the entry for Schedule B1, paragraph 51(5), in column 2, for “arrange initial

 

creditors’ meeting” substitute “seek creditors’ decision”.

 

      (3)  

In the entry for Schedule B1, paragraph 53(3), in column 2, for “at initial

 

creditors’ meeting” substitute “by creditors”.

 

      (4)  

In the entry for Schedule B1, paragraph 54(7), in column 2, for the words from

 

“decision” to “consider” insert “creditors’ decision on”.

 

      (5)  

In the entry for Schedule B1, paragraph 56(2), in column 2, for “summon

 

creditors’ meeting” substitute “seek creditors’ decision”.

 

Receivers and managers

 

12  (1)  

Section 48 (report by administrative receiver - England and Wales) is amended

 

as follows.

 

      (2)  

In subsection (1), after “such creditors” insert “, other than opted-out

 

creditors,”.

 

      (3)  

In subsection (2)—

 

(a)    

in paragraph (a), after “company” insert “, other than opted-out

 

creditors,”;

 

(b)    

omit the words after paragraph (b).

 

      (4)  

Omit subsection (3).

 

13         

In section 49(1) (committee of creditors - England and Wales), for the words

 

from the beginning to “fit” substitute “Where an administrative receiver has


 
 

Public Bill Committee:                               

398

 

, continued

 
 

sent or published a report as mentioned in section 48(2) the company’s

 

unsecured creditors may, in accordance with the rules”.

 

14  (1)  

Section 67 (report by receiver - Scotland) is amended as follows.

 

      (2)  

In subsection (1), after “such creditors” insert “, other than opted-out

 

creditors,”.

 

      (3)  

In subsection (2)—

 

(a)    

in paragraph (a), after “company” insert “, other than opted-out

 

creditors”;

 

(b)    

omit the words after paragraph (b).

 

      (4)  

Omit subsection (3).

 

15         

In section 68(1) (committee of creditors - Scotland), for the words from the

 

beginning to “fit” substitute “Where a receiver has sent or published a report

 

as mentioned in section 67(2) the company’s unsecured creditors may, in

 

accordance with the rules”.

 

Winding-up

 

16         

For section 94 (members’ voluntary winding up: final meeting of company

 

prior to dissolution) substitute—

 

“94    

Final account prior to dissolution

 

(1)    

As soon as the company’s affairs are fully wound up the liquidator

 

must make up an account of the winding up, showing how it has been

 

conducted and the company’s property has been disposed of.

 

(2)    

The liquidator must send a copy of the account to the members of the

 

company before the end of the period of 14 days beginning with the

 

day on which the account is made up.

 

(3)    

The liquidator must send a copy of the account to the registrar of

 

companies before the end of that period (but not before sending it to

 

the members of the company).

 

(4)    

If the liquidator does not comply with subsection (2) the liquidator is

 

liable to a fine.

 

(5)    

If the liquidator does not comply with subsection (3) the liquidator is

 

liable to a fine and, for continued contravention, a daily default fine.”

 

17  (1)  

Section 95 (effect of company’s insolvency) is amended as follows.

 

      (2)  

After subsection (1) insert—

 

“(1A)    

The liquidator must before the end of the period of 7 days beginning

 

with the day after the day on which the liquidator formed that

 

opinion—

 

(a)    

make out a statement in the prescribed form as to the affairs of

 

the company, and

 

(b)    

send it to the company’s creditors.”

 

      (3)  

Omit subsections (2) to (3) and (5) to (7).

 

18  (1)  

Section 96 (conversion to creditors’ voluntary winding up) is amended as

 

follows.

 

      (2)  

For “creditors’ meeting is held under section 95” substitute “liquidator sends a

 

statement of the company’s affairs to the company’s creditors under section

 

95(1A)(b)”.


 
previous section contents continue
 

© Parliamentary copyright
Revised 6 November 2014