Banking Bill

House of Commons

Session 2007 - 08
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Other Bills before Parliament

Banking Bill

Banking Bill
Part 2 — Bank Insolvency
51

Provision of
Subject
Modification or comment

Insolvency

Act 1986

Section 156
Payment of expenses of winding

up

5

Section 157
Attendance at company

meetings (Scotland)

Section 158
Power to arrest absconding

contributory

Section 159
Powers to be cumulative
Section 159 is not applied - but subsection (5)

10

above makes similar provision.

Section 160
Delegation of powers to

liquidator (England and Wales)

Section 161
Orders for calls on

contributories (Scotland)

15

Section 162
Appeals from orders (Scotland)
An appeal may be brought only if the

liquidation committee has passed a full

payment resolution.

Section 167
General powers of liquidator
(a)
An application to the court may not

and

be made under section 167(3) unless

20

Schedule 4

the liquidation committee has

passed a full payment resolution

(although a creditor or contributory

may apply to the court with respect

to any action (or inaction) of the

25

liquidation committee, under

section 95(3) above).

(b)
In exercising or considering whether

to exercise a power under Schedule

4 the bank liquidator shall have

30

regard to Objective 1 in section 93.

(c)
A reference to the liquidation

committee is to the liquidation

committee established by section 94.

(d)
The power in paragraph 4 of

35

Schedule 4 includes the power to

submit matters to arbitration.

Some additional general powers are conferred by

section 98 below.

Section 168
Supplementary powers of
(a)
A direction or request under section

40

liquidator
168(2) has no effect unless the

liquidation committee has passed a

full payment resolution.

(b)
Section 168(5) also applies in the

case of the imposition of bank

45

insolvency by order of the Court of

Session.

(c)
An application to the court may not

be made under section 168(5) unless

the liquidation committee has

50

passed a full payment resolution

(except as provided in section 94 or

96 above).

Section 169
Supplementary powers
(a)
Ignore section 169(1).

(Scotland)
(b)
Powers of the bank liquidator by

55

virtue of section 169(2) are subject to

Objective 1 in section 93 above.

Banking Bill
Part 2 — Bank Insolvency
52

Provision of
Subject
Modification or comment

Insolvency

Act 1986

Section 170
Liquidator’s duty to make
The liquidation committee is added to the list

returns
of persons able to apply under section 170(2).

5

Section 172
Removal of liquidator
Section 172 is not applied - but section 102 makes

similar provision.

Section 174
Release of liquidator
Section 174 is not applied - but section 109 makes

similar provision.

Section 175
Preferential debts

10

Section 176
Preferential charge on goods

restrained

Section
Expenses of winding up

176ZA

Section
Share of assets for unsecured

15

176A
creditors

Section 177
Appointment of special

manager

Section 178
Power to disclaim onerous

property

20

Section 179
Disclaimer of leaseholds

Section 180
Land subject to rentcharge

Section 181
Disclaimer: powers of court

Section 182
Leaseholds

Section 183
Effect of execution or

25

attachment (England and

Wales)

Section 184
Execution of writs (England and

Wales)

Section 185
Effect of diligence (Scotland)
In the application of section 37(1) of the

30

Bankruptcy (Scotland) Act 1985 the reference

to an order of the court awarding winding up

is a reference to the making of the bank

insolvency order.

Section 186
Rescission of contracts by court

35

Section 187
Transfer of assets to employees

Section 188
Publicity

Section 189
Interest on debts

Section 190
Exemption from stamp duty

Section 191
Company’s books as evidence

40

Section 192
Information about pending

liquidations

Section 193
Unclaimed dividends (Scotland)

Banking Bill
Part 2 — Bank Insolvency
53

Provision of
Subject
Modification or comment

Insolvency

Act 1986

Section 194
Resolutions passed at adjourned

meetings

5

Section 195
Meetings to ascertain wishes of
The power to have regard to the wishes of

creditors or contributories
creditors and contributories is subject to

Objective 1 in section 93.

Section 196
Judicial notice of court

documents

10

Section 197
Commission for receiving

evidence

Section 198
Court order for examination of

persons (Scotland)

Section 199
Costs of application for leave to

15

proceed (Scotland)

Section 200
Affidavits

Section 206
Fraud in anticipation of winding

up

Section 207
Transactions in fraud of

20

creditors

Section 208
Misconduct in course of

winding up

Section 209
Falsification of company’s

books

25

Section 210
Material omissions

Section 211
False representations to

creditors

Section 212
Summary remedy against

directors, &c.

30

Section 213
Fraudulent trading

Section 214
Wrongful trading

Section 215
Sections 213 & 214: procedure

Section 216
Restriction on re-use of

company names

35

Section 217
Personal liability for debts

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.

40

(c)
In subsection (5) treat the reference

to subsection (4) as a reference to

subsection (3).

Section 219
Obligations under section 218

Section 231
Appointment of 2 or more

45

persons

Banking Bill
Part 2 — Bank Insolvency
54

Provision of
Subject
Modification or comment

Insolvency

Act 1986

Section 232
Validity of acts

Section 233
Utilities

5

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

Section 237
Section 236: enforcement by

court

10

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

an undervalue for the purposes of section

238.

15

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

preference for the purpose of section 239.

Section 240
Sections 238 & 239: relevant

20

time

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

25

State for a bank insolvency order, or

(b)
notice under section 114 below.

Section 242
Gratuitous alienations

(Scotland)

Section 243
Unfair preferences (Scotland)

30

Section 244
Extortionate credit transactions

Section 245
Avoidance of floating charges

Section 246
Unenforceability of liens

Sections 386
Preferential debts

& 387, and

35

Schedule 6

(and

Schedule 4

to the

Pension

40

Schemes Act

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.

45

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

practitioner as references to acting as a bank

liquidator.

Banking Bill
Part 2 — Bank Insolvency
55

Provision of
Subject
Modification or comment

Insolvency

Act 1986

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

relation to any provision applied for the

5

purposes of bank insolvency.

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

10

423.

Sections 430
Offences

to 432 and

Schedule 10

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

15

reference to a statement prepared for the

purposes of a provision of this Part.

98
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
20
of the bank.
(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.
25
99
Status of bank liquidator
A bank liquidator is an officer of the court.
Tenure of bank liquidator
100
Term of appointment
A bank liquidator appointed by bank insolvency order remains in office until
30
vacating office—
(a)
by resigning under section 101,
(b)
on removal under section 102 or 103,
(c)
on disqualification under section 104,
(d)
on the appointment of a replacement in accordance with section 106,
35
(e)
in accordance with sections 107 to 109, or
(f)
on death.
101
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 119
40
below) may restrict a bank liquidator’s power to resign.

Banking Bill
Part 2 — Bank Insolvency
56

(3)
Resignation shall take effect in accordance with those rules (which shall
include provision about release).
102
Removal by court
(1)
A bank liquidator may be removed by order of the court on the application
of—
5
(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.
10
(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.
103
Removal by creditors
15
(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 97
above) provided that the following conditions are met.
(2)
Condition 1 is that the liquidation committee has passed a full payment
resolution.
20
(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
(b)
are given an opportunity to make representations to it.
25
(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—
(i)
the Secretary of State, or
30
(ii)
in the case of a bank liquidator in Scotland, the Accountant of
Court.
104
Disqualification
(1)
If a bank liquidator ceases to be qualified to act as an insolvency practitioner,
the appointment lapses.
35
(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.