Banking Bill

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

Banking Bill

Banking Bill
Part 2 — Bank Insolvency
49

Provision of
Subject
Modification or comment

Insolvency

Act 1986

Section 207
Transactions in fraud of

creditors

5

Section 208
Misconduct in course of

winding up

Section 209
Falsification of company’s

books

Section 210
Material omissions

10

Section 211
False representations to

creditors

Section 212
Summary remedy against

directors, &c.

Section 213
Fraudulent trading

15

Section 214
Wrongful trading

Section 215
Sections 213 & 214: procedure

Section 216
Restriction on re-use of

company names

Section 217
Personal liability for debts

20

Section 218
Prosecution of officers and
(a)
Ignore subsections (4) and (6).

members of company
(b)
In subsection (3), treat the second

reference to the official receiver as a

reference to the Secretary of State.

(c)
In subsection (5) treat the reference

25

to subsection (4) as a reference to

subsection (3).

Section 219
Obligations under section 218

Section 231
Appointment of 2 or more

persons

30

Section 232
Validity of acts

Section 233
Utilities

Section 234
Getting in company’s property

Section 235
Co-operation with liquidator
Ignore references to the official receiver

Section 236
Inquiry into company’s dealings
Ignore references to the official receiver

35

Section 237
Section 236: enforcement by

court

Section 238
Transactions at undervalue
Anything done by the bank in connection

(England and Wales)
with the exercise of a stabilisation power

under Part 1 of this Act is not a transaction at

40

an undervalue for the purposes of section

238.

Section 239
Preferences (England and
Action taken by the bank in connection with

Wales)
the exercise of a stabilisation power under

Part 1 of this Act does not amount to giving a

45

preference for the purpose of section 239.

Banking Bill
Part 2 — Bank Insolvency
50

Provision of
Subject
Modification or comment

Insolvency

Act 1986

Section 240
Sections 238 & 239: relevant

time

5

Section 241
Orders under sections 238 & 239
Having notice of the relevant proceedings

means having notice of—

(a)
an application by the Bank of

England, the FSA or the Secretary of

State for a bank insolvency order, or

10

(b)
notice under section 107 below.

Section 242
Gratuitous alienations

(Scotland)

Section 243
Unfair preferences (Scotland)

Section 244
Extortionate credit transactions

15

Section 245
Avoidance of floating charges

Section 246
Unenforceability of liens

Sections 386
Preferential debts

& 387, and

Schedule 6

20

(and

Schedule 4

to the

Pension

Schemes Act

25

1993)

Section 389
Offence of acting without being
Treat references to acting as an insolvency

qualified
practitioner as references to acting as a bank

liquidator.

Section 390
Persons not qualified to act
Treat references to acting as an insolvency

30

practitioner as references to acting as a bank

liquidator.

Section 391
Recognised professional bodies
An order under section 391 has effect in

relation to any provision applied for the

purposes of bank insolvency.

35

Sections 423
Transactions defrauding
Anything done by the bank in connection

- 425
creditors
with the exercise of a stabilisation power

under Part 1 of this Act is not a transaction at

an undervalue for the purposes of section

423.

40

Sections 430
Offences

to 432 and

Schedule 10

Section 433
Statements: admissibility
For section 433(1)(a) and (b) substitute a

reference to a statement prepared for the

45

purposes of a provision of this Part.

91
Additional general powers
(1)
A bank liquidator has the following powers.
(2)
Power to effect and maintain insurances in respect of the business and property
of the bank.
50

Banking Bill
Part 2 — Bank Insolvency
51

(3)
Power to do all such things (including the carrying out of works) as may be
necessary for the realisation of the property of the bank.
(4)
Power to make any payment which is necessary or incidental to the
performance of the bank liquidator’s functions.
92
Status of bank liquidator
5
A bank liquidator is an officer of the court.
Tenure of bank liquidator
93
Term of appointment
A bank liquidator appointed by bank insolvency order remains in office until
vacating office—
10
(a)
by resigning under section 94,
(b)
on removal under section 95 or 96,
(c)
on disqualification under section 97,
(d)
on the appointment of a replacement in accordance with section 99,
(e)
in accordance with sections 100 to 102, or
15
(f)
on death.
94
Resignation
(1)
A bank liquidator may resign by notice to the court.
(2)
Rules under section 411 of the Insolvency Act 1986 (as applied by section 112
below) may restrict a bank liquidator’s power to resign.
20
(3)
Resignation shall take effect in accordance with those rules (which shall
include provision about release).
95
Removal by court
(1)
A bank liquidator may be removed by order of the court on the application
of—
25
(a)
the liquidation committee,
(b)
the FSA, or
(c)
the Bank of England.
(2)
Before making an application the FSA must consult the Bank of England.
(3)
Before making an application the Bank of England must consult the FSA.
30
(4)
A bank liquidator removed by order has release with effect from a time
determined by—
(a)
the Secretary of State, or
(b)
in the case of a bank liquidator in Scotland, the Accountant of Court.

Banking Bill
Part 2 — Bank Insolvency
52

96
Removal by creditors
(1)
A bank liquidator may be removed by resolution of a meeting of creditors held
pursuant to section 195 of the Insolvency Act 1986 (as applied by section 90
above) provided that the following conditions are met.
(2)
Condition 1 is that the liquidation committee has passed a full payment
5
resolution.
(3)
Condition 2 is that the notice given to creditors of the meeting includes notice
of intention to move a resolution removing the bank liquidator.
(4)
Condition 3 is that the Bank of England and the FSA—
(a)
receive notice of the meeting, and
10
(b)
are given an opportunity to make representations to it.
(5)
A bank liquidator who is removed under this section has release with effect—
(a)
from the time when the court is informed of the removal, or
(b)
if the meeting removing the bank liquidator resolves to disapply
paragraph (a), from a time determined by—
15
(i)
the Secretary of State, or
(ii)
in the case of a bank liquidator in Scotland, the Accountant of
Court.
97
Disqualification
(1)
If a bank liquidator ceases to be qualified to act as an insolvency practitioner,
20
the appointment lapses.
(2)
A bank liquidator whose appointment lapses under subsection (1) has release
with effect from a time determined by—
(a)
the Secretary of State, or
(b)
in the case of a bank liquidator in Scotland, the Accountant of Court.
25
98
Release
A bank liquidator who is released is discharged from all liability in respect of
acts or omissions in the bank insolvency and otherwise in relation to conduct
as bank liquidator (but without prejudice to the effect of section 212 of the
Insolvency Act 1986 as applied by section 90 above).
30
99
Replacement
(1)
Where a bank liquidator vacates office the Bank of England must as soon as is
reasonably practicable appoint a replacement bank liquidator.
(2)
But where a bank liquidator is removed by resolution of a meeting of creditors
under section 96—
35
(a)
a replacement may be appointed by resolution of the meeting, and
(b)
failing that, subsection (1) above applies.