Corporate Insolvency and Governance Bill (HC Bill 128)
SCHEDULE 4 continued PART 4 continued
Contents page 40-49 50-59 60-69 70-79 80-89 90-99 100-109 110-119 120-129 130-139 140-149 150-169 169-170 170-179 180-189 190-199 200-208 210-219 220-229 230-232 Last page
Corporate Insolvency and Governance BillPage 140
Termination of moratorium under section A38(1)(d) of the Insolvency Act 1986
77
For the purposes of deciding whether to bring a moratorium to an end under
section A38(1)(d) of the Insolvency Act 1986 the monitor must disregard—
(a)
any debts that the monitor has reasonable grounds for thinking are
5likely to be paid within 5 days of the decision, and
(b)
any debts in respect of which the creditor has agreed to defer
payment until a time that is later than the decision.
Replacement of monitor or additional monitor: statement and consent to act
78
(1)
A statement under section A39(4) of the Insolvency Act 1986 must be headed
10“Proposed monitor’s statement and consent to act” and must contain the
following—
(a)
a certificate that the proposed monitor is qualified to act as an
insolvency practitioner in relation to the company,
(b) the proposed monitor’s IP number,
(c)
15the name of the relevant recognised professional body which is the
source of the proposed monitor’s authorisation to act in relation to
the company, and
(d)
a statement that the proposed monitor consents to act as monitor in
relation to the company.
(2)
20The statement must be made within the period of 5 days ending with the day
on which it is lodged in the court.
(3)
In this paragraph “IP number” means the number assigned to an office-
holder as an insolvency practitioner by the Secretary of State.
Replacement of monitor or additional monitor: notification
79 (1) 25A notice under section A39(8) of the Insolvency Act 1986 must state—
(a) the provision under which it is given,
(b) the nature of the notice,
(c) the date of the notice,
(d) the identification details for the company to which it relates,
(e) 30that it is given by the monitor acting in that capacity, and
(f) the name and contact details of the monitor.
(2) The notice must be authenticated by the monitor.
(3)
Rule 1.6 of the Scottish Insolvency Rules applies for the purposes of
authentication under sub-paragraph (2).
35Challenge to monitor’s remuneration
80
(1)
An administrator or liquidator of a company may apply to the court on the
ground that remuneration charged by the monitor in relation to a prior
moratorium for the company under Part A1 of the Insolvency Act 1986 was
excessive.
(2)
40An application under this paragraph may not be made after the end of the
period of 2 years beginning with the day after the moratorium ends.
(3) On an application under this paragraph the court may—
Corporate Insolvency and Governance BillPage 141
(a) dismiss the application,
(b) order the monitor to repay some or all of the remuneration, or
(c) make such other order as it thinks fit.
(4)
The expenses of an application under this paragraph are, unless the court
5orders otherwise, to be paid as an expense of the administration or
liquidation.
Challenge to directors’ actions: qualifying decision procedure
81
Where the court makes an order by virtue of section A44(4)(c) of the
Insolvency Act 1986 requiring a decision of a company’s creditors, the
10following provisions of the Scottish Insolvency Rules apply for the purposes
of that decision to the extent set out in the court’s order and subject to any
modifications set out in the court’s order—
(a) Part 5 (decision making);
(b) Part 6 (proxies).
15Priority of moratorium debts etc in subsequent winding up
82
(1)
Where section 174A of the Insolvency Act 1986 applies, the moratorium
debts and pre-moratorium debts mentioned in subsection (2)(b) of that
section are payable in the following order of priority—
(a)
amounts payable in respect of goods or services supplied during the
20moratorium under a contract where, but for section 233B(3) or (4) of
that Act, the supplier would not have had to make that supply;
(b) wages or salary arising under a contract of employment;
(c)
other debts or other liabilities apart from the monitor’s remuneration
or expenses;
(d) 25the monitor’s remuneration or expenses.
(2)
In this paragraph “wages or salary” has the same meaning as in section A18
of the Insolvency Act 1986.
Priority of moratorium debts etc in subsequent administration
83
(1)
Where paragraph 64A(1) of Schedule B1 to the Insolvency Act 1986 applies,
30the moratorium debts and pre-moratorium debts mentioned in paragraph
64A(2) of that Schedule are payable in the following order of priority—
(a)
amounts payable in respect of goods or services supplied during the
moratorium under a contract where, but for section 233B(3) or (4) of
that Act, the supplier would not have had to make that supply;
(b) 35wages or salary arising under a contract of employment;
(c)
other debts or other liabilities apart from the monitor’s remuneration
or expenses;
(d) the monitor’s remuneration or expenses.
(2)
In this paragraph “wages or salary” has the same meaning as in section A18
40of the Insolvency Act 1986.
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Prescribed format of documents
84
Rule 1.5 of the Scottish Insolvency Rules (requirement for writing and form
of documents) applies for the purposes of Part A1 of the Insolvency Act
1986.
85
(1)
5The following provisions of the Scottish Insolvency Rules apply, so far as
relevant, to any requirement imposed by a provision of this Part of this
Schedule—
-
rule 1.9 (prescribed format of documents), and
-
rule 1.10 (variations from prescribed contents).
(2)
10In their application by virtue of sub-paragraph (1), a reference in rule 1.9 or
1.10 to the requirements of a rule is to be read as a reference to the
requirements of the provision of this Part of this Schedule.
Delivery of documents
86
The following provisions of Chapter 9 of Part 1 of the Scottish Insolvency
15Rules apply for the purposes of proceedings under Part A1 of the Insolvency
Act 1986 as if rule 1.32(1) included a reference to such proceedings—
-
rule 1.32(2) to (3) (delivery to registrar of companies);
-
rule 1.36 (delivery of documents to authorised recipients);
-
rule 1.37 (delivery of documents to joint office-holders);
-
20rule 1.38 (postal delivery of documents);
-
rule 1.39 (delivery by document exchange);
-
rule 1.40 (personal delivery of documents);
-
rule 1.41 (electronic delivery of documents).
Identification details for a company
87
(1)
25Where a provision of this Part of this Schedule requires a document to
contain identification details for a company that is registered under the
Companies Act 2006 in Scotland, the following information must be given—
(a) the company’s registered name;
(b) its registered number;
(2)
30Where a provision of this Part of this Schedule requires a document to
contain identification details for a company that has registered particulars
under section 1046(1) of the Companies Act 2006 (registered overseas
companies), the following information must be given—
(a) the name registered by the company under section 1047 of that Act,
(b) 35the number under which it is registered, and
(c) the country or territory in which it is incorporated.
(3)
Where a provision of this Part of this Schedule requires a document to
contain identification details for an unregistered company that does not
come within sub-paragraph (2) the following information must be given—
(a) 40the company’s name, and
(b) the postal address of any principal place of business.
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Contact details of a monitor or other office-holder
88
Where a provision of this Part of this Schedule requires a document to
contain contact details of a monitor or other office-holder, the following
information must be given—
(a) 5a postal address for the monitor or office-holder, and
(b)
either an email address, or a telephone number, through which the
monitor may be contacted.
“The Scottish Insolvency Rules”
89
In this Part of this Schedule “the Scottish Insolvency Rules” means the
10Insolvency (Scotland) (Company Voluntary Arrangements and
Administration) Rules 2018 (S.I. 2018/1082S.I. 2018/1082).
Interpretation: general
90
Expressions used in this Part of this Schedule are to be construed as if this
Part of this Schedule were contained in Part A1 of the Insolvency Act 1986.
Section 4(2)
SCHEDULE 5 Moratoriums in Northern Ireland: eligible companies
In the Insolvency (Northern Ireland) Order 1989, before Schedule A1 (which
is repealed by Schedule 7 to this Act) insert—
Article 13AA
““Schedule ZA1 20Moratorium: Eligible companies
Eligible companies
1
A company is “eligible” for the purposes of this Part unless it is
excluded from being eligible by any of the following—
-
paragraph 2 (current or recent insolvency procedure);
-
25paragraph 3 (insurance companies);
-
paragraph 4 (banks);
-
paragraph 5 (electronic money institutions);
-
paragraph 6 (investment banks and investment firms);
-
paragraph 7 (market contracts, market charges, etc);
-
30paragraph 8 (participants in designated systems);
-
paragraph 9 (payment institutions);
-
paragraph 10 (operators of payment systems, infrastructure
providers etc); -
paragraph 11 (recognised investment exchanges, clearing
35houses and CSDs); -
paragraph 12 (securitisation companies);
-
paragraph 13 (parties to capital market arrangements);
-
paragraph 15 (public-private partnership project companies);
-
paragraph 18 (certain overseas companies).
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Companies subject to, or recently subject to, moratorium or an insolvency procedure
2 (1) A company is excluded from being eligible if—
(a)
on the filing date, a moratorium for the company is in
5force, or
(b)
at any time during the period of 12 months ending with the
filing date, a moratorium for the company was in force
(but see Article 13F(6) for power of the High Court to
modify the effect of this paragraph).
(2) 10A company is excluded from being eligible if—
(a)
on the filing date, the company is subject to an insolvency
procedure, or
(b)
at any time during the period of 12 months ending with the
filing date, the company was subject to an insolvency
15procedure within sub-paragraph (3)(a) or (b).
(3)
For the purposes of sub-paragraph (2), a company is subject to an
insolvency procedure at any time if at that time—
(a)
a voluntary arrangement has effect in relation to the
company,
(b) 20the company is in administration,
(c)
paragraph 45 of Schedule B1 applies in relation to the
company (administration: interim moratorium),
(d) there is an administrative receiver of the company,
(e) there is a provisional liquidator of the company,
(f) 25the company is being wound up, or
(g)
a relevant petition for the winding up of the company has
been presented and has not been withdrawn or
determined.
(4)
In sub-paragraph (3)(g) “relevant petition” means a petition
30under—
(a) Article 104A (winding up on grounds of public interest),
(b) Article 104B (winding up of SE), or
(c) Article 104C (winding up of SCE).
Insurance companies
3 (1) 35A company is excluded from being eligible if—
(a)
it carries on the regulated activity of effecting or carrying
out contracts of insurance, and
(b) it is not an exempt person in relation to that activity.
(2) In this paragraph—
-
40“exempt person”, in relation to a regulated activity, has the
meaning given by section 417 of the Financial Services and
Markets Act 2000; -
“regulated activity” has the meaning given by section 22 of
that Act, taken with Schedule 2 to that Act and any order
45under that section.
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Banks
4 (1) A company is excluded from being eligible if—
(a)
it has permission under Part 4A of the Financial Services
and Markets Act 2000 to carry on the regulated activity of
5accepting deposits,
(b)
it is a banking group company within the meaning of Part
1 of the Banking Act 2009 (see section 81D of that Act), or
(c)
it has a liability in respect of a deposit which it accepted in
accordance with the Banking Act 1979 or the Banking Act
101987.
(2)
In sub-paragraph (1)(a) “regulated activity” has the meaning
given by section 22 of the Financial Services and Markets Act 2000,
taken with Schedule 2 to that Act and any order under that section.
Electronic money institutions
5
15A company is excluded from being eligible if it is an electronic
money institution within the meaning of the Electronic Money
Regulations 2011 (S.I. 2011/99S.I. 2011/99) (see regulation 2 of those
Regulations).
Investment banks and investment firms
6
(1)
20A company is excluded from being eligible if it is an investment
bank or an investment firm.
(2) In this paragraph—
-
“investment bank” means a company that has permission
under Part 4A of the Financial Services and Markets Act
252000 to carry on the regulated activity of—(a)safeguarding and administering investments,
(b)managing an AIF or a UCITS,
(c)acting as trustee or depositary of an AIF or a UCITS,
(d)dealing in investments as principal, or
(e)30dealing in investments as agent,
but does not include a company that has permission to
arrange for one or more others to carry on the activity
mentioned in paragraph (a) if it does not otherwise have
permission to carry on any of the activities mentioned in
35paragraphs (a) to (e); -
“investment firm” has the same meaning as in the Banking
Act 2009 (see section 258A of that Act), disregarding any
order made under section 258A(2)(b) of that Act; -
“regulated activity” has the meaning given by section 22 of
40the Financial Services and Markets Act 2000, taken with
Schedule 2 to that Act and any order under that section.
Companies that are party to market contracts or subject to market charges, etc
7
(1)
A company is excluded from being eligible if it is a party to a
market contract for the purposes of Part 5 of the Companies (No.
452) (Northern Ireland) Order 1990 (see Article 80 of that Order).
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(2)
A company is excluded from being eligible if any of its property is
subject to a market charge for the purposes of Part 5 of the
Companies (No. 2) (Northern Ireland) Order 1990 (see Article 95
of that Order).
(3)
5A company is excluded from being eligible if any of its property is
subject to a charge that is a system-charge, within the meaning of
the Financial Markets and Insolvency Regulations (Northern
Ireland) 1996 (S.R. (N.I.) 1996/252) (see regulation 2 of those
Regulations).
10Participants in designated systems
8 A company is excluded from being eligible if—
(a)
it is a participant in a designated system, within the
meaning of the Financial Markets and Insolvency
(Settlement Finality) Regulations 1999 (S.I. 1999/2979S.I. 1999/2979) (see
15regulation 2 of those Regulations), or
(b)
any of its property is subject to a collateral security charge
within the meaning of those Regulations (see regulation 2
of those Regulations).
Payment institutions
9
20A company is excluded from being eligible if it is an authorised
payment institution, a small payment institution or a registered
account information service provider within the meaning of the
Payment Services Regulations 2017 (S.I. 2017/752S.I. 2017/752) (see regulation
2 of those Regulations).
25Operators of payment systems, infrastructure providers etc
10 A company is excluded from being eligible if—
(a)
it is the operator of a payment system or an infrastructure
provider within the meaning of Part 5 of the Financial
Services (Banking Reform) Act 2013 (see section 42 of that
30Act), or
(b)
it is an infrastructure company, within the meaning of Part
6 of that Act (see section 112 of that Act).
Recognised investment exchanges, clearing houses and CSDs
11
A company is excluded from being eligible if it is a recognised
35investment exchange, a recognised clearing house or a recognised
CSD within the meaning of the Financial Services and Markets Act
2000 (see section 285 of that Act).
Securitisation companies
12
A company is excluded from being eligible if it is a securitisation
40company within the meaning of the Taxation of Securitisation
Companies Regulations 2006 (S.I. 2006/3296S.I. 2006/3296) (see regulation 4 of
those Regulations).
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Parties to capital market arrangement
13 (1) A company is excluded from being eligible if, on the filing date—
(a)
it is a party to an agreement which is or forms part of a
capital market arrangement (see sub-paragraph (2)),
(b)
5a party has incurred, or when the agreement was entered
into was expected to incur, a debt of at least £10 million
under the arrangement (at any time during the life of the
capital market arrangement), and
(c)
the arrangement involves the issue of a capital market
10investment (see paragraph 14).
(2)
For the purposes of this paragraph, an arrangement is a “capital
market arrangement” if any of the following applies—
(a)
it involves a grant of security to a person holding it as
trustee for a person who holds a capital market investment
15issued by a party to the arrangement;
(b)
at least one party guarantees the performance of
obligations of another party;
(c)
at least one party provides security in respect of the
performance of obligations of another party;
(d)
20the arrangement involves an investment of a kind
described in articles 83 to 85 of the Financial Services and
Markets Act 2000 (Regulated Activities) Order 2001
(S.I. 2001/544S.I. 2001/544) (options, futures and contracts for
differences).
(3) 25For the purposes of sub-paragraph (2)—
(a)
a reference to holding a security as trustee includes a
reference to holding it as nominee or agent,
(b)
a reference to holding for a person who holds a capital
market investment includes a reference to holding for a
30number of persons at least one of whom holds a capital
market investment, and
(c)
a reference to holding a capital market investment is to
holding a legal or beneficial interest in it.
(4)
For the purposes of sub-paragraph (1)(b), where a debt is
35denominated wholly or partly in a foreign currency, the sterling
equivalent is to be calculated as at the time when the arrangement
is entered into.
14
(1)
For the purposes of paragraph 13 an investment is a “capital
market investment” if condition A or B is met.
(2) 40Condition A is that the investment—
(a)
is within article 77 or 77A of the Financial Services and
Markets Act 2000 (Regulated Activities) Order 2001
(S.I. 2001/544S.I. 2001/544) (debt instruments), and
(b)
is rated, listed or traded or designed to be rated, listed or
45traded.
(3) In sub-paragraph (2)—
-
“listed” means admitted to the official list within the meaning
given by section 103(1) of the Financial Services and
Markets Act 2000 (interpretation); -
“rated” means rated for the purposes of investment by an
5internationally recognised rating agency; -
“traded” means admitted to trading on a market established
under the rules of a recognised investment exchange or on
a foreign market.
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(4) In sub-paragraph (3)—
-
10“foreign market” has the same meaning as “relevant market”
in article 67(2) of the Financial Services and Markets Act
2000 (Financial Promotion) Order 2005 (S.I. 2005/1529S.I. 2005/1529)
(foreign markets); -
“recognised investment exchange” has the meaning given by
15section 285 of the Financial Services and Markets Act 2000
(recognised investment exchange).
(5)
Condition B is that the investment consists of a bond or
commercial paper issued to one or more of the following—
(a)
an investment professional within the meaning of article
2019(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (S.I. 2005/1529S.I. 2005/1529);
(b)
a person who, when the agreement mentioned in
paragraph 13(1) is entered into, is a certified high net
worth individual in relation to a communication within
25the meaning of article 48(2) of that Order;
(c)
a person to whom article 49(2) of that Order applies (high
net worth company, etc);
(d)
a person who, when the agreement mentioned in
paragraph 13(1) is entered into, is a certified sophisticated
30investor in relation to a communication within the
meaning of article 50(1) of that Order;
(e)
a person in a State other than the United Kingdom who
under the law of that State is not prohibited from investing
in bonds or commercial paper.
(6) 35For the purposes of sub-paragraph (5)—
(a)
in applying article 19(5) of the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005—
(i)
in article 19(5)(b), ignore the words after “exempt
person”,
(ii)
40in article 19(5)(c)(i), for the words from “the
controlled activity” to the end substitute “a
controlled activity”, and
(iii)
in article 19(5)(e), ignore the words from “where
the communication” to the end;
(b)
45in applying article 49(2) of that Order, ignore article
49(2)(e);
(c) “bond” means—
(i)
a bond that is within article 77(1) of the Financial
Services and Markets Act 2000 (Regulated
50Activities) Order 2001, or
Corporate Insolvency and Governance BillPage 149
(ii)
an alternative finance investment bond within the
meaning of article 77A of that Order;
(d)
“commercial paper” has the meaning given by article 9(3)
of that Order.
5Public-private partnership project companies
15
(1)
A company is excluded from being eligible if, on the filing date, it
is a project company of a project which—
(a)
is a public-private partnership project (see paragraph 16),
and
(b) 10includes step-in rights (see paragraph 17).
(2)
For the purposes of this paragraph a company is a “project
company” of a project if any of the following applies—
(a) it holds property for the purpose of the project;
(b)
it has sole or principal responsibility under an agreement
15for carrying out all or part of the project;
(c)
it is one of a number of companies which together carry
out the project;
(d)
it has the purpose of supplying finance to enable the
project to be carried out;
(e)
20it is the holding company of a company within any of
paragraphs (a) to (d).
(3) But a company is not a “project company” of a project if—
(a)
it performs a function within sub-paragraph (2)(a) to (d) or
is within sub-paragraph (2)(e), but
(b) 25it also performs a function which is not—
(i) within sub-paragraph (2)(a) to (d),
(ii)
related to a function within sub-paragraph (2)(a) to
(d), or
(iii) related to the project.
(4)
30For the purposes of this paragraph a company carries out all or
part of a project whether or not it acts wholly or partly through
agents.
16
(1)
For the purposes of paragraph 15 “public-private partnership
project” means a project—
(a)
35the resources for which are provided partly by one or more
public bodies and partly by one or more private persons,
or
(b)
which is designed wholly or mainly for the purpose of
assisting a public body to discharge a function.
(2) 40In sub-paragraph (1) “public body” means—
(a) a body which exercises public functions,
(b)
a body specified for the purposes of this paragraph by the
Department, or
(c)
a body within a class specified for the purposes of this
45paragraph by the Department.
(3) In sub-paragraph (1)(a) “resources” includes—