Banking Bill

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

Banking Bill

Banking Bill
Part 3 — Bank Administration
73

Provision of
Subject
Modification or comment

Schedule B1

Para. 72
Hire-purchase property
In the case of administration following

transfer to a bridge bank, until the Bank of

England has given an Objective 1

5

Achievement Notice an application may be

made only with the Bank of England’s

consent.

Para. 73
Protection for secured and
(a)
Treat a reference to proposals as

preferential creditors
including a reference to the

10

principles specified in the

modification of para. 68 set out

above.

(b)
Para. 73(1)(a) does not apply until

the Bank of England has given an

15

Objective 1 Achievement Notice.

Para. 74
Challenge to administrator’s
(a)
The Bank of England may make an

conduct
application to the court, on any

grounds, including grounds of

insufficient pursuit of Objective 1 in

20

section 131 (in addition to

applications that may anyway be

made under para. 74).

(b)
Until the Bank of England has given

an Objective 1 Achievement Notice,

25

an order may be made on the

application of a creditor only if the

court is satisfied that it would not

prejudice pursuit of Objective 1 in

section 131.

30

Para. 75
Misfeasance
In addition to applications that may anyway

be made under para. 75, an application may

be made by the bank administrator or the

Bank of England.

Para. 80
Termination: successful rescue
See section 147.

35

Para. 84
Termination: no more assets for
See section 148.

distribution

Para. 85
Discharge of administration

order

Para. 86
Notice to Companies Registrar
See section 147.

40

of end of administration

Para. 87
Resignation
A bank administrator may resign only by

notice in writing—

(a)
to the court, copied to the Bank of

England, or

45

(b)
in the case of a bank administrator

appointed by the creditors’

committee under para. 90, to the

creditors’ committee.

Para. 88
Removal
Until the Bank of England has given an

50

Objective 1 Achievement Notice, an

application for an order may be made only

with the Bank of England’s consent.

Para. 89
Disqualification
The notice under sub-para. (2) must be given

to the Bank of England.

55

Banking Bill
Part 3 — Bank Administration
74

Provision of
Subject
Modification or comment

Schedule B1

Paras. 90 &
Replacement
(a)
Until an Objective 1 Notice has been

91

given, the Bank of England, and

nobody else, may make an

5

application under para. 91(1).

(b)
After that, either the Bank of

England or a creditors’ committee

may apply.

(c)
Ignore para. 91(1)(b) to (e) and (2).

10

Para. 96
Substitution of floating charge-
Para. 96 applies to a bank administrator,

holder
but—

(a)
only after an Objective 1

Achievement Notice has been given,

and

15

(b)
ignoring references to priority of

charges.

Para. 98
Discharge
Discharge takes effect—

(a)
where the person ceases to be bank

administrator before an Objective 1

20

Achievement Notice has been given,

at a time determined by the Bank of

England, and

(b)
otherwise, at a time determined by

resolution of the creditors’

25

committee (for which purpose

ignore sub-para. (3)).

Para. 99
Vacation of office: charges and
In the application of sub-para. (3), payments

liabilities
may be made only—

(a)
in accordance with directions of the

30

Bank of England, and

(b)
if the Bank is satisfied that they will

not prejudice Objective 1 in section

131.

Paras. 100-
Joint administrators
Until an Objective 1 Achievement Notice has

35

103

been given, an application under para. 103

may be made only by the Bank of England.

Para. 104
Validity

Para. 106
Fines

(and section

40

430 and

Schedule 10)

Paras. 107 -
Extension of time limits
(a)
Until an Objective 1 Achievement

109

Notice has been given, an

application under para. 107 may be

45

made only with the Bank of

England’s consent.

(b)
In considering an application under

para. 107 the court must have regard

to Objective 1 in section 131.

50

(c)
In para. 108(1) “consent” means

consent of the Bank of England.

Para. 110
Amendment of provisions about
An order under para. 110 may amend a provision

time
of the Schedule as it applies by virtue of this

section (whether or not in the same way as it

55

amends the provision as it applies otherwise).

Para. 111
Interpretation

Banking Bill
Part 3 — Bank Administration
75

Provision of
Subject
Modification or comment

Schedule B1

Paras. 112 -
Scotland

116

TABLE 2 OF APPLIED PROVISIONS
5
OTHER PROVISIONS OF THE INSOLVENCY ACT 1986

Section
Subject
Modification or comment

Section 135
Provisional appointment
(a)
Treat the reference to the

presentation of a winding-up

petition as a reference to the making

10

of an application for a bank

administration order.

(b)
Subsection (2) applies in relation to

England and Wales and Scotland

(and subsection (3) does not apply).

15

(c)
Ignore the reference to the official

receiver.

(d)
Only a person who is qualified to act

as an insolvency practitioner and

who consents to act may be

20

appointed.

(e)
The court may only confer on a

provisional bank administrator

functions in connection with the

pursuance of Objective 1; and

25

section 132(2)(a) does not apply

before a bank administration order

is made.

(f)
A provisional bank administrator

may not pursue Objective 2.

30

(g)
The appointment of a provisional

bank administrator lapses on the

appointment of a bank

administrator.

Section
Discretion in managing and
In the case of bank administration following

35

168(4) (and
distributing assets
transfer to a bridge bank, until the Bank of

para. 13 of

England has given an Objective 1

Schedule 4)

Achievement Notice distribution may be

made only—

(a)
with the Bank of England’s consent,

40

or

(b)
out of assets which have been

designated as realisable by

agreement between the bank

administrator and the Bank of

45

England.

Section
Unsecured creditors
In the case of bank administration following

176A

transfer to a bridge bank, until the Bank of

England has given an Objective 1

Achievement Notice distribution may be

50

made in reliance on s. 176A only—

(a)
with the Bank of England’s consent,

or

(b)
out of assets which have been

designated as realisable by

55

agreement between the bank

administrator and the Bank of

England.

Banking Bill
Part 3 — Bank Administration
76

Section
Subject
Modification or comment

Section 178
Disclaimer of onerous property
In the case of bank administration following

transfer to a bridge bank, until the Bank of

England has given an Objective 1

Achievement Notice notice of disclaimer may

5

be given only with the Bank of England’s

consent.

Section 188
Publicity

Section 213
Fraudulent trading

Section 214
Wrongful trading
Ignore subsection (6).

10

Section 233
Utilities

Section 234
Getting in company’s property

Section 235
Co-operation with liquidator

Section 236
Inquiry into company’s dealings

Section 237
Section 236: enforcement by

15

court

Section 238
Transactions at undervalue

(England and Wales)

Section 239
Preferences (England and

Wales)

20

Section 240
Ss. 238 & 239: relevant time

Section 241
Orders under ss. 238 & 239
(a)
In considering making an order in

reliance on section 241 the court

must have regard to Objective 1 of

section 131.

25

(b)
Ignore subsections (2A)(a) and (3) to

(3C)).

Section 242
Gratuitous alienations

(Scotland)

Section 243
Unfair preferences (Scotland)
In considering the grant of a decree under

30

subsection (5) the court must have regard to

Objective 1 of section 131.

Section 244
Extortionate credit transactions

Section 245
Avoidance of floating charges

Section 246
Unenforceability of liens

35

Sections 386
Preferential debts

& 387, and

Schedule 6

(and

Schedule 4

40

to the

Pension

Schemes Act

1993)

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

45

qualified
practitioner as references to acting as a bank

administrator.

Banking Bill
Part 3 — Bank Administration
77

Section
Subject
Modification or comment

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

practitioner as references to acting as a bank

administrator.

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

5

relation to any provision applied for the

purposes of bank administration.

Sections 423
Transactions defrauding
(a)
In considering granting leave under

- 425
creditors
section 424(1) the court must have

regard to Objective 1 of section 131.

10

(b)
In considering making an order in

reliance on section 425 the court

must have regard to Objective 1 of

section 131.

Sections 430
Offences

15

- 432 &

Schedule 10

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

reference to a statement prepared for the

purposes of a provision of this Part.

20

140
Status of bank administrator
A bank administrator is an officer of the court.
141
Administrator’s proposals
(1)
This section applies before the giving of an Objective 1 Achievement Notice (at
which point paragraph 49 of Schedule B1 to the Insolvency Act 1986 applies in
25
accordance with section 139).
(2)
The bank administrator must as soon as is reasonably practicable after
appointment make a statement setting out proposals for achieving the
Objectives in section 131.
(3)
The statement must say whether the bank administrator proposes to pursue
30
Objective 2(a) or 2(b) in section 134.
(4)
The statement must have been agreed with the Bank of England.
(5)
But a bank administrator who is unable to agree a statement with the Bank of
England may apply to the court for directions under paragraph 63 of Schedule
B1 to the Insolvency Act 1986 (as applied by section 139); and the court may
35
make any order, including dispensing with the need for the Bank of England’s
agreement.
(6)
The bank administrator must send the statement to the FSA.
(7)
The bank administrator may revise the statement (and subsections (4) to (6)
apply to a revised statement as to the original).
40
(8)
The statement shall be treated in the same way (subject to this section) as a
statement under paragraph 49 of Schedule B1 to the Insolvency Act 1986.