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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.

 
 

 
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Revised 19 November 2008