Banking Bill

House of Commons

Session 2008 - 09
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Other Bills before Parliament

Banking Bill

Banking Bill
Part 2 — Bank Insolvency
55

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 96.

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
56

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 117 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
57

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.

101
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
102
Status of bank liquidator
A bank liquidator is an officer of the court.
Tenure of bank liquidator
103
Term of appointment
A bank liquidator appointed by bank insolvency order remains in office until
30
vacating office—
(a)
by resigning under section 104,
(b)
on removal under section 105 or 106,
(c)
on disqualification under section 107,
(d)
on the appointment of a replacement in accordance with section 109,
35
(e)
in accordance with sections 110 to 112, or
(f)
on death.
104
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 122
40
below) may restrict a bank liquidator’s power to resign.

Banking Bill
Part 2 — Bank Insolvency
58

(3)
Resignation shall take effect in accordance with those rules (which shall
include provision about release).
105
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.
106
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 100
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.
107
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.