---

Lord McIntosh of Haringey moved Amendment No. 238:

Page 282, line 32, at end insert "and"

The noble Lord said: My Lords, in moving Amendment No. 238, I shall speak also to Amendment No. 244. The potential for a company to move directly into a creditors' voluntary liquidation from administration is new and is introduced by paragraph 83 of new Schedule B1—that is, Schedule 16 of the Bill. This will facilitate, for example, distributions to unsecured creditors.

These amendments are simply consequential on that new procedure. We have provided that certain requirements necessary where a company goes directly into voluntary liquidation will not be necessary or appropriate where a company moves from administration into creditors' voluntary liquidation. These matters include the requirement to publish a notice of the resolution to wind up, to hold a meeting of creditors, to lay a statement of affairs before the creditors and to appoint a liquidator. This latter requirement is addressed specifically by paragraph 83. The others will have already been undertaken as part of the administration process. There is no value in repeating them simply for the purposes of the creditors' voluntary liquidation.

In addition, the possibility of a declaration of solvency has no place in this procedure. Where a creditors' committee has already been formed in administration it will continue to exist as if it were a liquidation committee. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendment No. 239:

Page 282, line 41, leave out "file with" and insert "send to"

The noble Lord said: My Lords, in moving Amendment No. 239 I shall speak also to Amendments Nos. 240 to 243 and Amendments Nos. 245 to 250. These are technical amendments. They make reference to documents being filed with the Registrar of Companies; references to documents being sent to him and thereafter registered by the Registrar.

The Bill includes various references to the administrator filing documents with the Registrar of Companies, but in technical terms this merely means the document arriving in whatever state it may be in at Companies House. In other words, Companies House

21 Oct 2002 : Column 1125

considers that it has been filed when it arrives in the post room. In most instances in the Bill this is acceptable since nothing substantive flows from the filing. However, there are two occasions on which an action or change in circumstance is instigated on a document being accepted by the Registrar of Companies. It then becomes particularly important that the terminology used in the Bill is precise, to mean that the substantive effect is from when the document is put on the register, not merely when it has arrived at Companies House.

The two occasions are those dealt with in the two paragraphs affected by these amendments, which deal with the end of the administration, when the company is either to move into creditors' voluntary liquidation, in order that the administrator can make distributions to creditors, or, in those cases where there is nothing left to distribute, is to be dissolved.

The Bill as drafted allows for the move into liquidation or dissolution to take effect on, or at a point some time after, the filing of the appropriate document with the Registrar of Companies. However, for the reason that I have given regarding the registrar's definition of "filing", the filing of an incorrectly filled-in form is not the "filing" that we would want to trigger the change in the company's circumstances. We want the change to be effected when the document is accepted and placed on the company's public file—that is, from the date that it is registered with the Registrar of Companies. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendments Nos. 240 to 250:

Page 282, line 42, at end insert—

"( ) On receipt of a notice under sub-paragraph (3) the registrar shall register it." Page 282, line 43, leave out "files" and insert "sends"

Page 283, line 3, leave out "filing" and insert "registration"

Page 283, line 8, leave out "filed" and insert "registered"

Page 283, line 12, at end insert—

"( ) In the application of Part IV to a winding up by virtue of this paragraph—
(a) section 85 shall not apply,
(b) section 86 shall apply as if the reference to the time of the passing of the resolution for voluntary winding up were a reference to the beginning of the date of registration of the notice under sub-paragraph (3),
(c) section 89 does not apply,
(d) sections 98, 99 and 100 shall not apply,
(e) section 129 shall apply as if the reference to the time of the passing of the resolution for voluntary winding up were a reference to the beginning of the date of registration of the notice under sub-paragraph (3), and
(f) any creditors' committee which is in existence immediately before the company ceases to be in administration shall continue in existence after that time as if appointed as a liquidation committee under section 101." Page 283, line 15, leave out "file" and insert "send"

Page 283, line 16, leave out "with" and insert "to"

21 Oct 2002 : Column 1126

Page 283, line 18, at end insert—

"( ) On receipt of a notice under sub-paragraph (1) the registrar shall register it." Page 283, line 19, leave out "filing" and insert "registration"

Page 283, line 21, leave out "files" and insert "sends"

Page 283, line 26, leave out "filing" and insert "registration"

On Question, amendments agreed to.

[Amendments Nos. 251 to 253 not moved.]

Schedule 17 [Administration: minor and consequential amendments]:

Lord McIntosh of Haringey moved Amendment No. 254:

Page 298, line 35, leave out "of the approval of the voluntary arrangement" and insert "on which the voluntary arrangement takes effect"

The noble Lord said: The amendment and those grouped with it—Amendments Nos. 255 to 259—are consequential and technical amendments necessary to align the Bill with the Insolvency Act 2000 and facilitate the drafting of the insolvency rules. Amendments Nos. 254 and 255 reflect the fact that Section 387 of the Insolvency Act 1986 has already been amended by the Insolvency Act 2000 and add further necessary consequential amendment to subsection (3). Amendments Nos. 256, 257 and 258 will ensure that we have sufficient vires to provide appropriate rules for the Bill's provisions. Amendment No. 259 corrects a cross-reference in Schedule 17(9). I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendments Nos. 255 to 259:

Page 298, line 38, after "paragraphs" insert "(a),"

Page 300, line 7, at end insert—

"( ) At the end of paragraph 2 (which becomes sub-paragraph (1)) add—
"(2) Rules made by virtue of this paragraph about the consequence of failure to comply with practice or procedure may, in particular, include provision about the termination of administration."" Page 300, line 10, at end insert—

"(2A) After paragraph 14 insert—
"14A. Provision about the application of section 176A of this Act which may include, in particular—
(a) provision enabling a receiver to institute winding up proceedings;
(b) provision requiring a receiver to institute winding up proceedings."" Page 300, line 10, at end insert—

"(2B) After paragraph 14A (inserted by sub-paragraph (2A) above) insert—
"Administration
14A. Provision which—
(a) applies in relation to administration, with or without modifications, a provision of Parts IV to VII of this Act, or
(b) serves a purpose in relation to administration similar to a purpose that may be served by the rules in relation to winding up by virtue of a provision of this Schedule.""

21 Oct 2002 : Column 1127

Page 300, line 23, leave out "28(4)" and insert "28(7)"

On Question, amendments agreed to.

Schedule 18 [Schedule 2A to Insolvency Act 1986]:

Lord Hunt of Wirral: moved Amendment No. 260:

Page 308, line 1, leave out from "involves" to end of line 3 and insert "the grant of a security interest by a party to the arrangement to—

(i) a person holding it as trustee for one or more persons who hold a capital market investment issued by a party to the arrangement;
(ii) a person party to such arrangements who issues a capital market investment;
(iii) a person holding it as trustee for a person party to such arrangement who issues a capital market investment; or
(iv) a person holding it as trustee for one or more persons who are party to the arrangement and who provide finance to a person party to such arrangement; or"

The noble Lord said: My Lords, we have already debated the amendment in Committee. I am aware that the Government believe it to be unnecessary, but I have consulted widely outside the House, in particular, with those in the legal profession who specialise in the area and who are not as satisfied as the Government appear to be.

The purely technical nature of the amendment is evident; I ask the Government only to reconsider. Perhaps I may explain. The existing capital markets exemption provided for in Schedule 18 demonstrates that the Government have decided that such transactions should be exempt from the restriction on appointing an administrative receiver to support the structured finance market.

I am not aware of any policy issues connected with the exception as it applies to special purpose vehicles used in structured finance transactions. Several structures should fall within the exemption but, as drafted, the Bill covers only one of them. It would be unfortunate if the Bill provided for some types of finance techniques dealing with special purpose vehicles but not others for what appears to be no sound policy or political reason. I therefore make no apology for again moving this purely technical amendment designed to cover all the types of structure that the Government have agreed should be exempt.

Finally, I am happy to share with the Minister and his colleagues the legal advice that I have received, which makes it imperative that the amendment is accepted. Meanwhile, I beg to move.

---