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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.

 
 

 
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