STANDARD CONDITIONS FOR
INDIVIDUAL VOLUNTARY ARRANGEMENTS

Produced by the
Association of Business Recovery Professionals

Version 4
January 2018

TABLE OF CONTENTS
STANDARD CONDITIONS FOR INDIVIDUAL VOLUNTARY ARRANGEMENTS

PART I: INTERPRETATION
1
2

Miscellaneous definitions
The Conditions

PART II: COMMENCEMENT, EFFECT AND DURATION OF ARRANGEMENT
3
4
5
6
7
8
9
10
11

1
1
2
2

Commencement of Arrangement
Nature and effect of the Arrangement
Existing proceedings against Debtor
Existing execution against Debtor’s assets
Mutual credit and set-off
Duration and expiry of Arrangement
Full Implementation of Arrangement
Substantial Compliance
Termination of Arrangement

2
2
3
3
4
4
5
5
5

PART III: SUPERVISOR’S FUNCTIONS, POWERS ETC

6

12
13
14
15
16
17
18
19
20
21
22

Supervisor’s functions
Supervisor’s powers
Supervisor’s powers after expiry, full implementation or termination
Exercise of Supervisor’s functions and powers
Restriction upon Supervisor’s duty and liability
Supervisor’s fees, costs and expenses
Supervisor’s resignation
Removal of Supervisor from office
Vacation of Office by Supervisor
Vacancy in the office of Supervisor
Release of Supervisor

PART IV: DEBTOR’S WARRANTY, DUTIES & OBLIGATIONS
23
24
25
26

Debtor’s warranty
Debtor’s duties in relation to the Supervisor
Further Documents
Debtor’s acknowledgement

PART V: ARRANGEMENT ASSETS
27
28
29
30

Arrangement assets
After-acquired assets
Trust of Arrangement assets
Restriction on dispositions

6
6
6
7
7
7
8
8
9
9
9
10
10
10
10
11
11
11
11
11
12

PART VI: PROOFS OF DEBT
31
32
33
34
35
36
37
38
39
40
41
42
43

Notice to submit Proofs
Submission of Proofs
Withdrawal and variation of Proofs
Production of documents
Witness statement substantiating Proof
Supervisor to allow inspection of Proofs
Admission and rejection of Proofs for Dividend
Appeal against decision on Proof
Debts of uncertain and small value
Secured Creditors
Foreign currency Debts
Interest on Debts
Cost of submitting proofs

PART VII CREDITORS WHO DO NOT HAVE NOTICE
44
45
46
47
48

Proof arising where funds available
Proof arising where no funds available
Effect of Proof on Debtor
Notification of Proof to Creditors
Proof arising after Arrangement ceases to have effectPART VIII: PAYMENT OF DIVIDENDS
49
50
51
52
53
54
55
56

12
12
12
12
13
13
13
13
13
13
14
14
14
15
15
15
15
15
15
16
16

Distribution by Dividend
Notice of intended Dividend
Notice of declaration
Proof altered after payment of Dividend
Secured Creditors
Assignment of Debts or rights to Dividend
Debts payable at future time
Debts of unpaid Creditors

16
16
16
17
17
18
18
18

PART IX: PRIORITY OF PAYMENTS AND DISTRIBUTIONS

18

57
58

Costs and Expenses of the Arrangement
Priority of Debts and application of surplus

PART X: THE CREDITORS’ COMMITTEE, WEBSITES & CREDITOR DECISIONS
59
60
61
62
63
64
65
66
67
68
69

The Creditors’ Committee
Use of websites
Power to seek a decision of Creditors
Procedure for seeking Creditor decisions
Cost of requisitioned decisions
Participation in Creditor decisions
Admission and rejection of Proofs
Majorities required for Creditor decisions
Chair of meeting as proxy-holder
Suspension/adjournment of meetings
Record of Creditor decisions

18
19
19
19
20
20
20
21
21
22
22
23
23
23

PART XI: PROVISIONS FOLLOWING BREACH OF THE ARRANGEMENT
70
71
72

Breach by the Debtor of the terms of the Arrangement
Procedure following breach
Retention of funds by Supervisor

PART XII: CONDITIONS WHERE TAX AUTHORITIES ARE CREDITORS
73
74
75
76
77
78
79

Claims by HM Revenue and Customs
Income commencing after approval
Post approval statutory returns and payments
Overdue accounts and returns
Funds to be paid to Supervisor
Restriction on payment of dividend
Set-off of repayments

PART XIII: MISCELLANEOUS PROVISIONS
80
81
82
83

Third Party obligations
Variation of the Arrangement
Tax liabilities arising on realisations
Invalidity and/or illegality

23
23
24
25
25
25
25
25
25
25
25
26
26
26
26
27
27

PART I: INTERPRETATION
1
Miscellaneous definitions
1(1) In the Arrangement, except where the context otherwise demands:(a) “the Act” means the Insolvency Act 1986 as amended;(b) “the Arrangement” means the Proposal and the Conditions read together;(c) “Associate” shall have the meaning given to it in section 435 of the Act;(d) “the Conditions” are these Conditions;(e) “the Court” means any court having jurisdiction in respect of the Arrangement;(f) “Creditor” is a person bound by the Arrangement to whom a Debt is owed;(g) “Debt” has the meaning given to it in section 382 of the Act with themodifications necessary to refer to a voluntary arrangement;(h) “the Debtor” means the person who makes the Proposal;(i) “Decision Date” has the meaning given by Rule 15.2(1) of the Rules with themodifications necessary to refer to a voluntary arrangement.
(j) “a Decision Procedure” has the meaning given by Section 379ZA of the Act
and paragraph 15.3 of the Rules with the modifications necessary to refer to a
voluntary arrangement.
(k) “Distress” includes but is not limited to the use of the procedure according tosection 72 of the Tribunals, Courts and Enforcement Act 2007 as set out in
Schedule 12 of the said Act and references to levying distress, seizing goods andrelated expressions shall be construed accordingly.
(l) “Dividend” means a distribution to Creditors;(m) “Excluded Assets” are those assets identified in the Proposal as being excluded
from the Arrangement;(n) “Paragraphs” are Paragraphs of these Conditions; and “Sub-paragraph” shallbe construed accordingly;(o) “Preferential Creditor” is a Creditor with a Debt falling within section 386 of
the Act and “Preferential Debt” shall be construed accordingly;(p) “Proof” means a proof of claim in accordance with Rules 14.2 to 14.4 of theRules with the modifications necessary to refer to a voluntary arrangement.
(q) “Property” has the meaning given to it in section 436 of the Act;(r) “the Proposal” is the document annexed hereto together with modifications anddocuments incorporated thereto, being a proposal under Part VIII of the Act;(s) “the Rules” means the Insolvency (England and Wales) Rules 2016 as
amended;(t)“Security” has the meaning given to it in section 383 of the Act; and “Secured
Creditor” shall be construed accordingly;(u) “the Secretary of State” means the Secretary of State for Business, Energy andIndustrial Strategy or any successor office;(v) “the Supervisor” is the person or persons for the time being appointed tosupervise the implementation of the Arrangement;(w) “the Trust Realisation Period” is the period of time from commencement of
the Arrangement and continues, notwithstanding expiry, termination or full

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implementation of the Arrangement until the realisation and distribution of sums
due to Creditors under the Arrangement terms.
1(2) References in the Arrangement to any statutory provision shall include areference to any modification or re-enactment thereof for the time being in force.
2
The Conditions
2 The Conditions are an integral part of the Arrangement. In the event of any
ambiguity or conflict between the Conditions and the Proposal and any modifications
to it, the Proposal as modified shall prevail.

PART II: COMMENCEMENT, EFFECT AND DURATION OF
ARRANGEMENT
3
Commencement of Arrangement
3
The Arrangement shall come into effect upon the approval thereof by theCreditors pursuant to the provisions of the Act and Rules.
4
Nature and effect of the Arrangement4(1) [Nature of Arrangement] The Arrangement is a proposal under Part VIII of the
Act for a scheme of arrangement of the Debtor’s affairs or a composition in full andfinal satisfaction of the Debtor’s Debts.
4(2) [Claims against third parties] Unless the Proposal indicates to the contrary,nothing in the Arrangement shall be construed as effecting a composition orsatisfaction of any Debt owed by a person other than the Debtor, whether that Debt is
owed jointly by the Debtor or otherwise.
4(3) [Restriction on Creditors’ rights] After the commencement of the
Arrangement, no Creditor shall, in respect of any Debt which is subject to the
Arrangement:(a) have any remedy against the property or person of the Debtor;(b) commence or continue any action or other legal proceeding against the Debtor.
4(4) [Suspension of limitation period] The Debtor agrees that any limitation period
accruing in respect of a Debt which is subject to the Arrangement shall be suspended
until expiry, termination or full implementation of the Arrangement, whichever issooner.
4(5) [Saving for certain rights] Nothing in this Paragraph or elsewhere in theConditions shall be construed as affecting the following rights:(a) the right of any Secured Creditor to enforce his Security, except with the
Secured Creditor’s consent;(b) the right of the Supervisor or any Creditor to present a bankruptcy petition under
section 264(1)(c) of the Act for default in connection with the Arrangement(c) the right of any Creditor to bring or continue legal proceedings against the
Debtor and to obtain a judgment against the Debtor in the full amount of its

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Debt for the sole purpose of making a claim against an insurer of the Debtor by
virtue of the Third Party (Rights Against Insurers) Act 2010.
5
Existing proceedings against Debtor
5(1) [Discontinuance of existing proceedings] Legal proceedings against the Debtor
in existence at the commencement of the Arrangement in respect of Debts which are
subject to the Arrangement shall, unless they are of a type contemplated by Paragraph4(5) or the Supervisor otherwise directs, be discontinued by the Creditor with no orderas to costs as soon after the commencement of the Arrangement as is practicable.
5(2) [Waiver of Debtor’s costs entitlement on discontinuance] The Debtor
confirms that no costs entitlement arising as a result of the discontinuance of any legal
action in accordance with Sub-paragraph (1) will be enforced and the Debtor waives
any such rights.
5(3) [Costs of existing proceedings] Legal costs of a Creditor in proceedings otherthan bankruptcy referred to in Sub-paragraph (1) shall be a Debt falling within the
Arrangement.
5(4) [Costs of bankruptcy proceedings] Petition costs of a Creditor who presented
a bankruptcy petition against the Debtor prior to the commencement of the
Arrangement shall be treated as an expense of the Arrangement to rank after the costsof the Nominee but before those of the Supervisor.
5(5) [Prior distress – Interim order case] Where any person has distrained on the
goods or effects of the Debtor in the period of three months prior to the making of theinterim order, those goods or effects, or the proceeds of their sale, shall be charged
with the Preferential Debts of the Debtor to the extent that the assets of the
Arrangement are insufficient for meeting those debts.
5(6) [Prior distress - No Interim Order case] Where any person has distrained on
the goods or effects of the Debtor in the period of three months prior to thecommencement of the Arrangement, those goods or effects, or the proceeds of theirsale, shall be charged with the Preferential Debts of the Debtor to the extent that theassets of the Arrangement are insufficient for meeting those debts.
6
Existing execution against Debtor’s assets
6(1) [Partly-completed execution] A Creditor who, before the commencement of
the Arrangement, has issued execution against the goods or land of the Debtor in
respect of a Debt which is subject to the Arrangement, or has attached a Debt due tothe Debtor from another person in respect of such a Debt shall, unless the execution or
attachment was completed before the commencement of the Arrangement,
discontinue the execution or attachment as soon after the commencement of the
Arrangement as is practicable.
6(2) [Completion of execution or attachment] For the purposes of Sub-paragraph(1):(a) an execution against goods is completed by seizure and sale or by the making ofa charging order absolute under section 1 of the Charging Orders Act 1979;(b) an execution against land is completed by seizure, by the appointment of areceiver or by the making of a charging order absolute under section 1 of theCharging Orders Act 1979;
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(c)an attachment of a Debt is completed by the receipt of the Debt.

7
Mutual credit and set-off
7(1) [Application] This Paragraph applies where before the commencement of the
Arrangement there have been mutual credits, mutual Debts or other mutual dealings
between the Debtor and any Creditor other than in the circumstances to which
Paragraph 79 of these Conditions apply.
7(2) [Account to be taken] An account shall be taken of what is due from each party
to the other in respect of the mutual dealings and the sums due from one party shall be
set-off against the sums due from the other.
7(3) [No account where Creditor has notice] Sums due from the Debtor to anotherparty shall not be included in the account taken under Sub-paragraph (2) if that otherparty had notice at the time they became due that a bankruptcy petition relating to the
Debtor was pending or that an interim order was made in relation to the Debtor.
7(4) [Restriction on post-commencement set-off] Other than as provided for in thisParagraph, set-off shall not be available in respect of any Debt or item of Property.
7(5) [Balance provable or to be paid] Only the balance (if any) of the account taken
under Sub-paragraph (2) is provable in the Arrangement or, as the case may be, to be
paid to the Debtor or, if the Proposal so provides, to the Supervisor.
8
Duration and expiry of Arrangement8(1) [General rule] Unless extended under the provisions of these Conditions, theArrangement shall continue until the end of the period stated in the Proposal at whichtime it shall expire by effluxion of time.
8(2) [Extension of duration by Supervisor] The Supervisor may extend theduration of the Arrangement by sending a notice to this effect (“an Extension Notice”)
to the Debtor and all Creditors. This may be done on up to 2 occasions: for a period of
up to 6 months in the first instance and for a period of up to 3 months in the second
instance.
8(3) [Extension Notice] An Extension Notice shall be sent not less than 7 days prior
to the date upon which the Arrangement is otherwise due to be fully implemented andmust state the reason or reasons for the extension.
8(4) [Effect of extension] In the event of an Extension Notice being sent, theArrangement shall continue for the period specified therein, or for the maximum
allowable period for that extension (being 6 months for a first extension and 3 months
for a second extension) commencing on the date immediately after that on which the
Arrangement would otherwise have been fully implemented, whichever is sooner.
8(5) [Supervening notice of a decision procedure] If a Decision Procedure has been
initiated by the Supervisor with a Decision Date after the Arrangement would
otherwise have expired, the duration of the Arrangement shall be extended to theDecision Date.
8(6) [Further extension] Any extension for a period longer than that provided forunder Sub-paragraph (2) shall require approval as a variation of the Arrangement.

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9Full Implementation of Arrangement9(1) [Certificate of full implementation] Upon the full implementation of the
Arrangement, the Supervisor shall, if the Debtor has complied with his obligations
under the Arrangement, issue a notice (“the Certificate of full implementation”)
stating that the arrangement has been fully implemented.
9(2) [Effect of full implementation] Save to the extent provided in Paragraph 4(5),upon the issue by the Supervisor of a Certificate of full implementation, the Debtor
shall be released from all Debts which are subject to the Arrangement.
9(3) [Notification of full implementation] Copies of the Certificate of full
implementation issued under this Paragraph shall be sent by the Supervisor to the
Debtor, the Creditors and the Secretary of State together with the Supervisor’s reportunder Rule 8.31 (termination or full implementation of the IVA).
10 Substantial Compliance10(1) [Issue of notice where substantial compliance] The Supervisor may issue a
Certificate of full implementation notwithstanding that the Debtor has not compliedwith all of his obligations under the Arrangement provided the Debtor has:(a) made all the payments required under the terms of the Arrangement;(b) provided a full explanation of any breach of the terms of the Arrangement
required by the Supervisor;(c) paid to the Supervisor such sum (if any) as the Supervisor shall reasonably haverequired to compensate the Creditors for any reduction in Dividend caused by
the Debtor’s breach of the terms of the Arrangement.
10(2) [Notification to creditors] Where the Supervisor proposes to issue a Certificate
of full implementation under Sub-paragraph (1), he shall notify the Creditors andinvite them to submit any comments within 21 days from the date of notification.
10(3) [Treatment as full implementation] If the Supervisor issues a Certificate offull implementation under Sub-paragraph (1), the Arrangement shall be treated as
fully implemented for the purposes of Rule 8.31 (termination or full implementationof the IVA).
11 Termination of Arrangement11(1) [Termination in certain circumstances] The Arrangement shall terminate
upon the earlier of:(a) the Supervisor issuing a Notice of Termination under Paragraph 71;(b) the making of a bankruptcy order against the Debtor;(c) the Debtor’s death.
11(2) [Notice of termination] The Supervisor shall, on discovering the occurrence ofa terminating event, but in any event not more than 28 days after such discovery, givenotice of such termination and its reason to the Debtor (or, if the Debtor has died, his
representative), Creditors and the Secretary of State, together with the supervisor’s
report under Rule 8.31 (termination or full implementation of the IVA).

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PART III: SUPERVISOR’S FUNCTIONS, POWERS ETC
12 Supervisor’s functions
12(1) [Primary function] The Supervisor’s primary function is to supervise
performance of the Debtor’s obligations under the Arrangement and to administer the
Arrangement.
12(2) [Other functions] The Supervisor shall also undertake such functions as are
given to him in the Proposal, Act and Rules.
13 Supervisor’s powers
13(1) Subject to those powers more particularly given in the Arrangement, Act andRules, the Supervisor shall have the following powers:(1) [Getting in assets] power to take possession of, collect, get in and hold any or allof the assets which, under the terms of the Arrangement, the Supervisor is tohold as trustee;(2) [Realisation of assets] power to sell or otherwise dispose of any asset referred toin Sub-paragraph (1) in such manner as may seem to the Supervisor expedient;(3) [Putting funds on deposit] power to place money coming into the Supervisor’s
hands during the course of the Arrangement on deposit with any established
United Kingdom clearing bank or building society;(4) [Appointing agents] power to engage legal representatives, managers, agents andother persons to assist in the performance of the Supervisor’s functions underthe Arrangement;(5) [Delegation] power to delegate to the Supervisor’s firm and any appropriate
partner, employee or agent thereof any or all of the Supervisor’s duties andfunctions under the Arrangement save those which by law the Supervisor isrequired to perform personally;(6) [Insurance] power to effect and maintain insurances in respect of any asset
subject to the Arrangement;(7) [Power to claim] power to prove, rank, claim and draw a dividend in respect ofsuch debts owed to the Debtor as fall within the Arrangement;(8) [Power to direct Debtor] power, in the event that the Supervisor is unable or it isimpracticable to do any act or thing which the Supervisor is empowered to dohimself, to direct the Debtor to do that act or thing;(9) [Ancillary power] power to do any other act or thing which is necessary or
expedient for the purposes of exercising the above powers or for carrying out theSupervisor’s functions under the Arrangement.
13(2) Where more than one person is appointed as Supervisor, any act required or
authorised to be done under any enactment or otherwise may be done by all or any
one or more of the persons for the time being holding office.
14 Supervisor’s powers after expiry, full implementation or termination
14(1) [Exercise of powers] The expiry, full implementation or termination of the
Arrangement shall not affect the Supervisor’s power to carry out such functions and to
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exercise such powers as are necessary for the Supervisor to fully carry out the duties,
obligations and responsibilities of the Supervisor under the Arrangement, Act andRules and to resolve such matters as may have arisen during the course of the
Arrangement. This includes, but is not limited to, any duties, obligations andresponsibilities in respect of assets held by the Supervisor on trust.
14(2) [Retention of funds by Supervisor] Upon the expiry, full implementation or
termination of the Arrangement, the Supervisor shall be entitled to retain, for such
period as is reasonably necessary and from any funds under the Supervisor’s control,
such monies as the Supervisor reasonably thinks fit on account of fees, costs, charges,
liabilities and expenses, and the Supervisor shall advise Creditors and the Debtor inwriting of the quantum of the funds so retained and the reasons why.
15 Exercise of Supervisor’s functions and powers
15(1) [Application of bankruptcy provisions] In the event that the Arrangement
does not provide guidance to the Supervisor as to what action should be taken in any
given situation, the Supervisor shall apply the provisions of the Act and Rules in so
far as they relate to bankruptcy with necessary modifications to refer to a voluntaryarrangement.
15(2) [Consultation of Creditors] If the Supervisor is uncertain as to what action
should be taken in any situation, or wishes to ascertain the wishes of Creditors on amatter concerning the Arrangement, the Supervisor may seek the advice and/or
direction of the Creditors’ Committee and/or the majority or most material of theCreditors and he may act upon such advice and/or direction.
15(3) [Directions from the Court] This Paragraph is without prejudice to theSupervisor’s right to refer matters concerning the Arrangement to the Court for
guidance and/or directions.
16 Restriction upon Supervisor’s duty and liability
16(1) [Supervisor’s duty] The Supervisor shall be under no obligation to perform any
act or carry out any function save for those expressly provided for in the
Arrangement, the Act or Rules.
16(2) [Supervisor’s liability] Neither the Supervisor, the Supervisor’s firm or any of
the Supervisor’s agents or employees shall incur any personal liability in negligenceor otherwise for any act or omission in connection with the Arrangement, unless suchact or omission constitutes one of dishonesty or a breach of the Supervisor’s
obligations under the Act, Rules or the Arrangement.
17 Supervisor’s fees, costs and expenses
17(1) [Amount of fees] The Supervisor shall be entitled to charge fees for services inaccordance with the time actually and reasonably expended by the Supervisor and theSupervisor’s staff in carrying out the Supervisor’s functions under the Arrangement
by reference to the ordinary hourly rates of the Supervisor and the Supervisor’s staff
as shall apply from time to time.
17(2) [Payment of fees, costs and expenses] The fees, costs, charges and expenses of
the Supervisor shall be paid out of the assets of the Arrangement from time to time as
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the Supervisor thinks fit. The Supervisor shall provide such information to any
Creditors’ Committee appointed in relation to the Arrangement as is reasonably
necessary to explain how the fees, costs, charges and expenses were determined or
incurred, as the case may be.
17(3) [Supervisor’s right of recourse to Court] If the Supervisor is dissatisfied witha determination of the Creditors’ Committee or a decision of Creditors on a matter
involving fees, costs, charges and/or expenses, the Supervisor shall have the right torefer the matter to the Court, whose decision on the matter shall bind all parties.
18 Supervisor’s resignation
18(1) [Methods of resignation] A Supervisor may resign from office with theapproval of Creditors sought via a Decision Procedure, with the permission of the
Court or in the circumstances set out in 18(3) below.
18(2) [Grounds of Supervisor’s resignation] The sole Supervisor may only resignfrom office on one or more of the following grounds:(a) ill health;(b) cessation of practice as an insolvency practitioner;(c) change of circumstances rendering it impracticable for him to continue in office.
18(3) [More than one supervisor] Where there is more than one supervisor in office,a supervisor may resign without seeking the approval of the creditors or permission of
the court where it is considered to be impracticable or no longer necessary to have thepresent number of persons acting as Supervisor to the Arrangement and at least one
supervisor shall remain in office notwithstanding the resignation. In thesecircumstances notice of the resignation of a supervisor shall be given in the nextreport to creditors when otherwise due.
18(4) [Report of Supervisor’s administration] The notice to Creditors in a Decision
Procedure for the purpose of receiving the resignation of a sole supervisor shallspecify the grounds upon which the Supervisor wishes to resign and shall beaccompanied by a report of the Supervisor’s administration of the Arrangement which
includes an up to date summary of his receipts and payments.
19 Removal of Supervisor from office19(1) [Methods of removal] The Supervisor may be removed from office by only anorder of the Court, or by a decision of the Creditors requested specifically for that
purpose.
19(2) [Notice of requisitioned decision procedure] Any notice served by a Creditor
upon the Supervisor under Paragraph 61(5) (content of notice requisitioning adecision) for the purpose of initiating a decision of Creditors to remove the Supervisor
from office must set out the grounds upon which removal is sought.
19(3) [Report of Supervisor’s administration] The notice sent out by the Supervisor
to Creditors convening such a decision procedure shall specify the grounds uponwhich removal is sought and shall be accompanied by a report of the Supervisor’s
administration of the Arrangement including an up to date summary of receipts andpayments.

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20 Vacation of Office by Supervisor
20(1) [Resignation/removal of Supervisor where more than one acting] If theCreditors resolve to remove a Supervisor from office, or a joint supervisor resigns,
and there will be another person in the office of Supervisor for the time being, theSupervisor who is resigning or being removed shall vacate office immediately.
20(2) [Resignation/removal of Supervisor where no other acting] If the Creditors
resolve to accept a Supervisor’s resignation or to remove a Supervisor from office,and there is no other person in the office of Supervisor for the time being, that
resignation and/or removal shall not take effect and the Supervisor shall not vacate
office unless and until the Creditors, by a Decision Procedure or the Court, appoints a
replacement Supervisor.
20(3) [Loss of qualification] The Supervisor shall vacate office immediately if theSupervisor ceases to be a person who is for the time being qualified to act.
20(4) [Notice of vacation of office] A Supervisor who, for any reason other than as
set out in paragraph 18(3), vacates office shall forthwith give notice of that fact to the
Debtor, the Creditors and the Secretary of State.
20(5) [Duties of Supervisor upon vacation of office] A Supervisor who, for any
reason, vacates office shall, as soon as practicable, deliver up to any successor all
books, records and papers relating to the Arrangement and the Supervisor’s
administration thereof together with all assets of which the Supervisor is a trustee
under the terms of the Arrangement.
20(6) [Continuing duty of former Supervisor] Former Supervisors shall be obliged
to give such assistance to the Supervisor of the Arrangement from time to time as may
be reasonably required for ascertaining what transpired during the tenure of office by
the former Supervisor.
21 Vacancy in the office of Supervisor
21(1) [Decision of Creditors to fill vacancy] If, for any reason, there is a vacancy inthe office of Supervisor, that vacancy may be filled by the Creditors by way of a
Decision Procedure, or by the Court.
21(2) [Seeking appointment where no Supervisor acting] If no Supervisor is in
office, the Debtor, any Creditor, any person who was in partnership with theSupervisor immediately before the vacancy occurred, the former Supervisor’s
authorising body, or any other interested party may convene a Decision Procedure to
fill the vacancy.
21(3) [Chair where no Supervisor acting] In the event that a meeting of Creditors iscalled when no Supervisor is in office, the convenor shall act as chair of the meeting.
22 Release of Supervisor
22(1) Upon the termination or full implementation of the Arrangement and theSupervisor having dealt with the assets in his possession in accordance with the termsof the Arrangement, the Supervisor shall be released from any further obligations or
liability in respect of the Arrangement or any trusts created thereby.

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PART IV: DEBTOR’S WARRANTY, DUTIES & OBLIGATIONS
23 Debtor’s warranty
23(1) [Disclosure in Proposal] The Debtor warrants that the Proposal discloses fulland complete particulars of all matters required under the Act and Rules including(without prejudice to the generality of the foregoing) particulars of all of the Debtor’s
assets, debts and liabilities, whether actual, contingent or prospective.
23(2) [Accuracy of Proposal] The Debtor warrants that the contents of the Proposal
are true and accurate in all material respects as at the date of the commencement of
the Arrangement, subject only to those qualifications that may be disclosed by the
Debtor to the Creditors considering the approval of the Arrangement and recorded by
the Supervisor in his report under Rule 8.24 (report of the creditors’ consideration of a
proposal).
23(3) [Disclosure of third party information] The Debtor authorises any Creditor todisclose to the Supervisor such information relating to the Debtor and the Debtor’s
dealings or property as may reasonably be required to assist in the implementation of
the Arrangement.
24 Debtor’s duties in relation to the Supervisor
24(1) [Duty to co-operate with Supervisor] The Debtor undertakes and agrees to:(a) give to the Supervisor such information as to the Debtor’s assets, liabilities andother affairs;(b) attend on the Supervisor and the Supervisor’s agents, representatives ornominees at such times; and(c) do all such other things;
as the Supervisor shall reasonably require for the purpose of carrying out theSupervisor’s functions and duties under the Arrangement, including as trustee and/or
following the expiry, full implementation or termination of the Arrangement.
24(2) [Duty to submit accounts] The Debtor undertakes and agrees to furnish theSupervisor with accounts relating to the Debtor’s affairs of such nature, as at suchdate and for such period as the Supervisor may reasonably require.
24(3) [Notice of after-acquired assets and increased income] Where at any time
during the subsistence of the Arrangement any After-Acquired Assets of a description
falling within Paragraph 28 are acquired by or devolve upon the Debtor, or there is anincrease in the Debtor’s income if the Debtor is under an obligation to makecontributions out of income, the Debtor shall forthwith give the Supervisor notice ofthe property or, as the case may be, of the increase.
25 Further Documents
25 Without prejudice to the generality of the Debtor’s other duties under the
Arrangement, the Debtor shall, at the request of the Supervisor, execute such
Mortgages, Charges, Deeds, Transfers, Trusts, Powers of Attorney or other documents
as may reasonably be required by the Supervisor for the protection and/or realisation
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of assets, to secure the Debtor’s compliance with the Debtor’s obligations under the
Arrangement, or otherwise to facilitate the implementation of the Arrangement.
26 Debtor’s acknowledgement26(1) [Agreement to be bound] The Debtor undertakes to carry out the obligations
imposed upon the Debtor under the Arrangement in full and at the times provided for.
26(2)[Consequences of breach] The Debtor acknowledges that the likely
consequence of failure to comply with the Debtor’s obligations hereunder in full andat the times provided for is that the Arrangement will fail and the Debtor will be
adjudged bankrupt on a petition presented by the Supervisor.
26(3) [Section 262A] The Debtor acknowledges that the Debtor commits an offence if
any false representation is made or any other fraud is committed for the purpose ofobtaining the approval of Creditors to the Arrangement.
PART V: ARRANGEMENT ASSETS
27 Arrangement assets
27 Property other than Excluded Assets belonging to or vested in the Debtor at thedate of commencement of the Arrangement which would form part of the Debtor’s
estate in a bankruptcy shall be subject to the Arrangement and be an asset thereof.
28 After-acquired assets
28(1) [After-acquired property subject to Arrangement] The Supervisor may
claim as an asset of the Arrangement any Property acquired by the Debtor between
the commencement date of the Arrangement and the date of its full implementation
and/or termination which would have been an asset of the Arrangement if it had
belonged to or was vested in the Debtor at the date of commencement of the
Arrangement (“After-Acquired Assets”). Any such asset shall be subject to the
Arrangement and be an asset thereof.
28(2) [Proviso for excess assets] After-Acquired Assets shall only be sold or
realised to the extent necessary to repay the Creditors in full together with interest, if
any, to which Creditors are entitled pursuant to the Arrangement.
29 Trust of Arrangement assets
29(1) [Assets in the possession of the Debtor] Property constituting an asset of the
Arrangement in the possession, custody or control of the Debtor shall be held by the
Debtor upon trust for the purposes of the Arrangement during the Trust Realisation
Period in accordance with the Arrangement.
29(2) [Assets in the possession of the Supervisor] Property constituting an asset of
the Arrangement in the possession, custody or control of the Supervisor shall be heldby the Supervisor upon trust for the purposes of the Arrangement.
29(3) [Actions during the Trust Realisation Period] The Supervisor will get in andrealise assets which are subject to the trust and which are capable of being realised
during the Trust Realisation Period.

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29(4) [Effect of expiry or termination] The trusts referred to in Sub-paragraphs (1)and (2) shall not come to an end upon expiry or termination of the Arrangement but
such assets as are contained within the trust shall be dealt with in accordance with
Paragraph 29(3) above. At the expiry of the Trust Realisation Period, the trust shallcome to an end.
29(5) [Effect of full implementation] Upon the issuing of a Certificate of full
implementation under Paragraph 9, the trusts referred to in Sub-paragraphs (1) and (2)shall not come to an end but such assets as are contained within the trust shall be
dealt with in accordance with Paragraph 29(3). At expiry of the Trust Realisation
Period, the trust shall come to an end.
29(6) [Effect of bankruptcy] In the event that a Bankruptcy Order is made against
the Debtor, any assets got in and realised by the Supervisor prior to the making of that
Order shall be applied and distributed in accordance with the terms of the
Arrangement and the trust shall terminate solely in respect of assets of the Debtor not
yet realised.
30 Restriction on dispositions
30(1) The Debtor shall not sell, charge or otherwise dispose of any interest in any
asset subject to the Arrangement without the Supervisor’s written consent, suchconsent ought not to be unreasonably refused.
30(2) The Debtor hereby consents, agrees to procure that any co-owner also consents,and hereby requests the Chief Land Registrar to register a restriction on the
Proprietorship Register of any registered land which is subject to the Arrangement in
the following form: “No disposition of the registered estate by the proprietor of theregistered estate or by the proprietor of any registered charge is to be registeredwithout a written consent signed by [name of Supervisor] of [address] (or his
conveyancer).”
PART VI: PROOFS OF DEBT
31 Notice to submit Proofs
31 As soon as practicable after the commencement of the Arrangement, andprovided no application under Section 262 of the Act (challenge of creditors’decision) or an appeal under Rule 15.35 (appeals against decisions) is pending, theSupervisor shall send a notice (“a Notice to Submit Proofs”) to every Creditor andother person to whom the Debtor may be indebted of whom the Supervisor has noticerequiring them to provide such details of their Debts as the Supervisor thinks fit.
32 Submission of Proofs
32 Creditors shall submit their Proofs in writing to the Supervisor in the form, ifany, required by the Supervisor, or one which is substantially similar.
33 Withdrawal and variation of Proofs
33(1) [Withdrawal by written notice] A Creditor may withdraw a Proof at any timeby delivering a written notice to the Supervisor.
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33(2) [Variation of amount by agreement] The amount claimed by a Creditor’s
Proof may be varied at any time by agreement between the Creditor and theSupervisor.
34 Production of documents
34 The Supervisor may call for any document or other evidence to be produced forthe purpose of substantiating the whole or any part of the Proof.
35 Witness statement substantiating Proof
35 The Supervisor may require a Proof to be verified by witness statement with astatement of truth.
36 Supervisor to allow inspection of Proofs
36 The Supervisor shall, so long as Proofs are in the Supervisor’s possession, allow
them to be inspected, at all reasonable times on any business day, by:(a) any Creditor who has delivered a Proof (unless the Proof has been wholly
rejected for the purposes of Dividend, or otherwise); and(b) a person acting on behalf of any such Creditor.
37 Admission and rejection of Proofs for Dividend37(1) [Admission] The Supervisor may admit or reject a Proof for Dividend in whole
or in part.
37(2) [Rejection] If the Supervisor rejects a Proof in whole or in part, the Supervisor
must deliver to the Creditor a written statement of reasons for so doing, as soon asreasonably practicable.
38 Appeal against decision on Proof
38(1) [Application by Creditor] If a Creditor is dissatisfied with the Supervisor’s
decision with respect to the Creditor’s own Proof (including a decision whether the
Debt is preferential), the Creditor may apply to the Court, within 21 days (or such
longer period as the Court shall, in the special circumstances, allow) of receiving thestatement sent under Paragraph 37(2), for the decision to be reversed or varied.
38(2) [Application by other parties] The Debtor or any other Creditor may, if
dissatisfied with the Supervisor’s decision admitting or rejecting the whole or any partof a Proof or agreeing to revalue a Creditor’s security, make such an application
within 21 days (or such longer period as the Court shall, in the special circumstances,
allow) of becoming aware of the Supervisor’s decision.
38(3) [Costs of appeal] The Supervisor is not personally liable for the costs incurredby any person in respect of an appeal under this Paragraph unless the Court so orders.
39 Debts of uncertain and small value39(1) [Estimation of Debt or liability] The Supervisor shall estimate the value of any
Debt which, by reason of its being subject to a contingency or for any other reason,
does not bear a certain value.

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39(2) [Notification to Creditor] The Supervisor shall notify the Creditor in writing of
any such estimate. If the Creditor is dissatisfied with the Supervisor’s decision theCreditor may exercise the right of appeal under paragraph 38.
39(3) [Claim of Debts of uncertain value] Where the value of any Debt is estimatedby the Supervisor under Sub-paragraph (1), the amount provable in the Arrangement
shall be the amount of the estimate.
39(4) [Small Debts] Any Creditor whose Debt does not exceed £1,000 need not(unless so required by the Supervisor) submit a Proof to the Supervisor and theSupervisor may admit such Debt and pay a Dividend accordingly.
40 Secured Creditors
40(1) [Proving for balance of Debt] A Secured Creditor may submit a Proof for thebalance of Debt (if any) after deducting the value of that Creditor’s Security.
40(2) [Voluntary surrender of Security] If a Secured Creditor voluntarily surrenders
his Security for the general benefit of the Creditors, that Creditor may submit a Prooffor the whole Debt as if it were unsecured.
40(3) [Altering value of Security] A Secured Creditor may, with the agreement of theSupervisor or the permission of the Court, at any time alter the value put upon that
Creditor’s Security in a Proof.
40(4) [Test of Security’s value] If the Supervisor is dissatisfied with the value whicha Secured Creditor puts on a Security in the Creditor’s Proof, the Supervisor may
require any property comprised in the Security to be professionally valued by a person
agreed as between the Creditor and the Supervisor, or in default of such agreement by
the Court.
40(5) [Professional valuation treated as amended valuation] Where a professional
valuation has been carried out under the previous Sub-paragraph, that valuation shallbe treated as an amended valuation of the Creditor.
40(6) [Realisation of Security] If a Creditor who has valued Security subsequently
realises it:(a) the Creditor shall forthwith notify the Supervisor and shall give the Supervisor
such information relating thereto as the Supervisor may reasonably require;(b) the net amount realised shall be substituted for the value previously put by theCreditor on the Security, and(c) that amount shall be treated in all respects as the Creditor’s amended valuation.
41 Foreign currency Debts
41 [Conversion into sterling] For the purpose of proving for a Debt incurred or
payable in a currency other than sterling, the amount of the Debt shall be converted
into sterling at a single rate for each currency determined by the Supervisor byreference to the exchange rate prevailing at the date of commencement of the
Arrangement.
42 Interest on Debts
42 Where a Debt bears interest, that interest is provable as part of the Debt except
in so far as it is payable in respect of any period after the commencement of the
Arrangement.
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43 Cost of submitting proofs
43(1) [Creditor bears cost of submitting Proof] Every Creditor bears the cost ofsubmitting that Creditor’s own Proof, including costs incurred in providing any
document or evidence to the Supervisor.
43(2) [Supervisor’s costs] Costs incurred by the Supervisor in estimating the value ofa Debt of uncertain value shall be an expense of the Arrangement.
PART VII CREDITORS WHO DO NOT HAVE NOTICE
44 Proof arising where funds available
44 If, at the time the Proof is notified to the Supervisor, the Arrangement is
continuing and the Supervisor is holding sufficient funds to pay a Dividend to such
Creditor or Creditors, then the Supervisor will (subject to agreement of the Proof)
forthwith pay to the Creditor a Dividend of an amount which is on the same basis as
the Dividends already paid. Such payments will be made before any further payments
to any other Creditors and will be paid so as to bring about an equalisation in
Dividends between Creditors who fall within section 260(2)(b)(i) on the one hand andsection 260(2)(b)(ii) on the other hand.
45 Proof arising where no funds available
45 If a Proof is notified to the Supervisor at a time when the Supervisor is holding
no funds available for payment of a Dividend, then as and when any funds arereceived the Supervisor will (subject to agreement of the Proof) out of such funds firstmake such payment to such Creditors so as to bring about an equalisation as aforesaid.
46 Effect of Proof on Debtor
46(1)[Proof not to constitute default] The notification to the Supervisor of any such
Proof shall not constitute an act of default unless the failure to give notice to such
Creditor was a deliberate act on the part of the Debtor.
46(2)[Obligation to provide further funds] Unless the Proposal otherwise provides,
there shall be no obligation upon the Debtor to pay to the Supervisor any further sumsof money or make any further assets available (other than already provided for in the
Proposal) so as to meet the Proof falling to be dealt with under Rule 8.3(v) unless the
Proposal as agreed provides for a minimum Dividend to be paid to Creditors.
47 Notification of Proof to Creditors
47 On receipt of any such Proof, the Supervisor will notify all Creditors bound ofsuch receipt, the name of the Creditor, the amount of the Proof and will provide suchother information as may be relevant, including particulars as to the Debtor’s
explanation why the Creditor was not given notice and the impact which such Proof islikely to have on the outcome of the Arrangement. Such notification may, if theSupervisor considers it appropriate, be included in the progress report to Creditors,
provided that such report is due to be circulated within a period of three months fromthe date on which the Proof is notified. Where, in the opinion of the Supervisor, thePage 15 of 27

Proof, whether taken alone or in conjunction with other such Proofs, will notmaterially reduce the amount of the estimated Dividend, the Supervisor may defer
notification and include it in the next progress report.
48 Proof arising after Arrangement ceases to have effect
48 If the Proof is notified to the Supervisor after the date on which the Arrangementceases to have effect, then the Creditor shall be entitled to rely upon section 260(2A)of the Act and shall be entitled to recover from the Debtor such sum as the Creditor
would have received had the Proof been notified to the Supervisor prior to the date on
which the Arrangement ceased to have effect and the Supervisor had been able toinclude the Proof in the Arrangement for the purpose of payment of Dividends or
distributions. The Supervisor shall be under no obligation to agree any such Proof, or
take any action in respect thereof, other than to furnish the Creditor who relies on
section 260(2A) with a certificate as to the Dividend or distribution the Creditor
would have received had the Proof been included in the Arrangement for Dividend or
distribution purposes and on the assumption that the Proof would have been agreed in
the sum claimed.
PART VIII: PAYMENT OF DIVIDENDS
49 Distribution by Dividend49(1) [Duty to declare and distribute Dividends] At the time or times specified in
the Proposal or, if none, whenever the Supervisor has sufficient funds in hand for the
purpose, the Supervisor shall, subject to the retention of such sums as may benecessary for payment of the expenses of the Arrangement, declare and distribute
Dividends among the Creditors in respect of the Debts which they have proved.
49(2) [Calculation and distribution of Dividend] In the calculation anddistribution of a Dividend the Supervisor shall make provision:(a) for any Debts which are the subject of Proofs which have not yet been
determined; and(b) for any disputed Debts.
50 Notice of intended Dividend50(1) [Notice to Creditors who have not proved] No more than three months
before declaring a Dividend to non-preferential Creditors, the Supervisor shall givenotice of his intention to do so to all such Creditors whose addresses are known to
him and who have not proved.
50(2) [Last date for submitting proofs] Any notice sent out to Creditors underSub-paragraph (1) shall specify a date (“the Last Date for Submitting Proofs”) up towhich a Proof may be delivered. The Last Date for Submitting Proofs shall be thesame for all Creditors and not less than 21 days from the date of the notice.
51 Notice of declaration
51(1)[Notice to Creditors who have proved] The Supervisor shall give notice of the
Dividend to all Creditors who have proved for their Debts.
51(2)[Particulars in notice] The notice shall include the following particulars:
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(a)amounts realised from the sale of assets subject to the Arrangement, indicating(so far as practicable) amounts realised by the sale of particular assets and/or
amounts paid by the Debtor to the Supervisor under the Arrangement;(b) payments made by the Supervisor during the course of the Arrangement;(c) provision (if any) made for unsettled claims and funds (if any) retained forparticular purposes;(d) the total amount to be distributed and the rate of Dividend;(e) whether, and if so when, any further Dividend is expected to be declared.
51(3)[Simultaneous distribution] The Dividend may be distributed simultaneouslywith the notice declaring it.
51(4)[Method of payment] Payment of Dividend may be made by post, or
arrangements may be made with any Creditor for it to be paid in another way, or held
for collection.
51(5)[Endorsement in negotiable instrument] Where a Dividend is paid on a bill of
exchange or other negotiable instrument, the amount of the Dividend shall beendorsed on the instrument, or on a certified copy of it, if required to be produced by
the holder for that purpose.
52 Proof altered after payment of Dividend52(1)[Amount claimed increased] If, after payment of the Dividend, the amountproved for by a Creditor is increased, the Creditor is not entitled to disturb the
distribution of the Dividend; but is entitled to be paid, out of any money for the time
being available for the payment of any further Dividend, any Dividend or Dividends
which the Creditor has failed to receive before that money is applied to the paymentof any such further Dividend.
52(2)[Proof withdrawn, disallowed, reduced] If, after a Creditor’s Proof has been
admitted, the Proof is withdrawn or disallowed, or the amount of it is reduced, theCreditor shall repay to the Supervisor any amount overpaid by way of Dividend.
53 Secured Creditors
53(1)[Application of Paragraph] The following applies where a Creditor re-values
Security at a time when a Dividend has been declared.
53(2)[Reduction in unsecured claim] If the re-valuation results in a reduction of theCreditor’s unsecured claim ranking for Dividend, the Creditor shall, as soon aspracticable, repay to the Supervisor any amount received as Dividend in excess of thatto which the Creditor would be entitled having regard to the re-valuation of the
Security.
53(3)[Increase of unsecured claim] If the re-valuation results in an increase of theCreditor’s unsecured claim, the Creditor is entitled to receive from the Supervisor, outof any money for the time being available for the payment of a further Dividend,
before any such Dividend is paid, any Dividend or Dividends which the Creditor has
failed to receive, having regard to the re-valuation of the Security. However, theCreditor is not entitled to disturb any Dividend declared (whether or not distributed)
before the date of the revaluation.

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54 Assignment of Debts or rights to Dividend54(1)[Notice of assignment] If a Creditor entitled to a Dividend gives notice to theSupervisor that the Creditor wishes the Dividend to be paid to another person, or that
the Creditor has assigned his entitlement or Debt to another person, the Supervisor
shall pay the Dividend to that other person accordingly.
54(2)[Contents of notice] A notice given under this Paragraph must specify the nameand address of the person to whom payment is to be made.
55 Debts payable at future time55(1) [Debts payable at a future time] A creditor may prove for a Debt of which
payment was not yet due at the date of commencement of the Arrangement.
55(2) [Entitlement to Dividend] Where a Creditor has claimed for a Debt of which
payment is not due at the date of the declaration of Dividend, the Creditor is entitledto the Dividend equally with other Creditors, but subject as follows.
55(2)[Calculation of amount of reduction] For the purpose of Dividend (and noother purpose), the amount of the Creditor’s admitted Proof (or, if a distribution has
previously been made to the Creditor, the amount remaining outstanding in respect of
the Creditor’s admitted claim) must be discounted by applying the following formula:X
1.05n
where X is the value of the admitted Proof; and ‘n’ is the period beginning with therelevant date and ending with the date on which the payment of the Creditor’s Debt
would otherwise be due, expressed in years.
56 Debts of unpaid Creditors
56(1)[Creditors not entitled to Dividend] Creditors who do not prove in the
Arrangement (with the exception of any Debts admitted by the Supervisor underParagraph 39(4)) shall not be entitled to receive any Dividend.
56(2)[Unclaimed Dividends paid to the Debtor] Dividends due to Creditors who
have proved in the Arrangement but to whom the Supervisor has been unable to pay
shall, at the end of the Arrangement, be paid to the Debtor or, if there is one, theDebtor’s trustee in bankruptcy.
56(3)[Debtor liable for unclaimed Dividends] Once a Dividend has been paid to the
Debtor or the Debtor’s trustee in bankruptcy under the previous Sub-paragraph, theCreditor must claim it from the Debtor or, as the case may be, the Debtor’s trustee inbankruptcy and no other person.
PART IX: PRIORITY OF PAYMENTS AND DISTRIBUTIONS
57 Costs and Expenses of the Arrangement57(1)[Expenses to be paid first] Subject to Paragraphs 5(4) and 72 the fees, costs,
charges, expenses and liabilities properly charged or incurred by or on behalf of theNominee or the Supervisor are expenses of the Arrangement and shall be paid inpriority to all other charges, expenses, liabilities and Debts.

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57(2)[Charge in relation to expenses] The Supervisor shall have a charge on theassets subject to the Arrangement in respect of the expenses of the Arrangement.
58 Priority of Debts and application of surplus
58(1)[Priority of Preferential Debts] In the distribution of sums due to be paid to
Creditors under the terms of the Arrangement, Preferential Debts shall be paid inpriority to other Debts.
58(2)[Ranking of Preferential Debts] Preferential Debts rank equally between
themselves after the expenses of the Arrangement.
58(3)[Ranking of Ordinary Debts] Debts other than Preferential Debts rank equally
between themselves and, after the Preferential Debts, shall be paid in full unless thesums due to be paid to Creditors are insufficient for meeting them, in which case theyabate in equal proportions between themselves.
58(4)[Surplus after payment] Any surplus remaining after the payment of thePreferential and other Debts shall first be applied in paying interest on those Debts in
respect of the periods during which they have been outstanding since thecommencement of the Arrangement (for this purpose interest on Preferential Debts
ranks equally with interest on Debts other than Preferential Debts) and thereafter
returned to the Debtor.
58(5)[Interest rate on surplus] The rate of interest payable under Sub-paragraph (4)in respect of any Debt is whichever is the greater of the following:(a) the rate specified in section 17 of the Judgments Act 1838 at the commencementof the Arrangement; and(b) the rate applicable to that Debt apart from the Arrangement.

PART X: THE CREDITORS’ COMMITTEE, WEBSITES & CREDITORDECISIONS
59 The Creditors’ Committee
59(1)[Establishment] In the event that the nominee has invited creditors to form acommittee, or the creditors have so decided the following provisions will apply;
Creditors may establish a committee (“the Creditors’ Committee”), consisting of notless than 3 and not more than 5 members to represent the interests of the Creditors andto provide such assistance and guidance to the Supervisor as may reasonably berequired. The Nominee may invite Creditors to form a committee at the same time
the Creditors’ approval for the proposal is sought.
59(2)[Eligibility] All the members of the Creditors’ Committee must be Creditors of
the Debtor; and any Creditor (other than one who is fully secured) may be a member,so long as:(a) the Creditor has delivered a Proof, and(b) the Creditor’s Proof has neither been wholly disallowed for voting purposes, norwholly rejected for the purposes of distribution or Dividend.

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59(3)[Application of the Rules] The provisions relating to the Creditors’ Committeein Rules 17.1 to 17.29 shall apply to the Arrangement with any necessary
modifications.
59(4)[Expenses of members] The reasonable travelling expenses directly incurred byany member of the Creditors’ Committee or their representatives in respect of theirattendance at the meetings of the Creditors’ Committee, or otherwise on the Creditors’Committee’s business, shall rank as an expense of the Arrangement.
60 Use of websites
60(1) [Use of websites] Where the Supervisor is required to give, deliver, furnish or
send a notice or other document or information to any person, that requirement may
be satisfied by making the notice, document or information available on a website.
60(2) [Application of the Rules] The provisions of Rules 1.49-1.51 relating to use of
websites shall apply to the Arrangement with any necessary modifications.
61 Power to seek a decision of Creditors
61(1) [Supervisor’s power to seek a decision] The Supervisor may seek a decisionof Creditors for any purpose connected with the Arrangement.
61(2) [Choice of Decision Procedure] A decision of Creditors may be made by any
Decision Procedure provided for in Rule 15.3 (the prescribed decision procedures)
except that it may not be made by physical meeting unless Sub-paragraph (3) applies.
61(3) [Power to require physical meeting] If 10% in value, or 10% in number or 10of the Creditors request in writing that a decision of Creditors be taken at a physicalmeeting, the Supervisor shall, unless relieved by the Court from so doing, convenesuch a meeting within 21 days from the receipt of such request.
61(4) [Power to requisition a decision] If 25% in value of the Creditors request in
writing that a decision of Creditors be sought, the Supervisor shall, unless relieved by
the Court from so doing, initiate a Decision Procedure within 21 days from the receipt
of such request. This is subject to any deposit for costs required under Paragraph 63
having been paid.
61(5) [Content of notice requisitioning a decision] A notice served upon the
Supervisor under Sub-paragraph (4) shall state the decision of Creditors for which theDecision Procedure is requested.
61(6) [Debtor request] If the Debtor requests in writing that the Supervisor seek adecision of Creditors the Supervisor shall not unreasonably refuse such a request. If
the Supervisor considers the request to be reasonable the Supervisor shall convenesuch Decision Procedure as he considers appropriate to consider the decision.
62 Procedure for seeking Creditor decisions
62(1) [Notice of a decision procedure] Notice of a Decision Procedure shall be givenby the convenor to every Creditor whose address is known to him or identified in the
Proposal at least 14 days before the Decision Date, or such shorter period as the Court
may allow.
62(2)[Contents of notice and procedure] The notice and procedure shall follow, so
far as applicable, the requirements of Rules 15.4 (electronic voting), 15.5 (virtual
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meetings), 15.6 (physical meetings) and 15.8 (notices to creditors of decision
procedure).
62(3)[Convenience of participants] The convenor must have regard to theconvenience of those invited to participate when making arrangements for a Decision
Procedure.
62(4)[Time of meeting] Meetings of Creditors shall be convened for commencement
between the hours of 10.00 and 16.00 on a business day.
62(5)[Chair of meeting] Unless Paragraph 21(3) (chair where no Supervisor acting)applies, the Supervisor, or a person experienced in insolvency matters and nominatedby him, shall be chair of the meeting.
62(6) [Non-receipt of notice] Where a decision is sought by a notice in accordancewith Sub-paragraph (1), the Decision Procedure is presumed to have been duly
initiated and conducted, even if not everyone to whom the notice is to be delivered
has received it.
62(7) [Exclusions from meetings] The provisions of Rules 15.36-15.38 relating topersons excluded from meetings shall apply to the Arrangement with any necessary
modifications.
63 Cost of requisitioned decisions
63(1)[Security for payment of expenses] Subject to Sub-paragraph (3) below, thecost of requisitioning a decision of Creditors at the instance of the Debtor or Creditors
shall be paid by that person or persons, who shall deposit security for their payment
with the Supervisor.
63(2)[Appropriate security] The sum to be deposited shall be such as the Supervisor
determines to be appropriate; and the Supervisor shall be under no obligation to act
without the deposit having been paid.
63(3)[Vote for cost to be an expense of arrangement] Where a Decision Procedure
is requisitioned, the Creditors may vote that the expenses of convening and taking it
shall rank as an expense of the Arrangement.
63(4)[Repayment of deposit] To the extent that any deposit made under thisParagraph is not required for the payment of expenses of convening and taking theDecision Procedure, it shall be repaid to the person who made it.
64 Participation in Creditor decisions
64(1)[Conditions for voting] Subject as follows, in order to be counted in a Decision
Procedure other than where votes are cast at a meeting, votes must :(a) be received by the convenor on or before the Decision Date; and(b) accompanied by a Proof in respect of the Creditor’s claim, unless it has alreadybeen provided to the convenor.
64(2)[Unliquidated and unascertained claims] A Debt for an unliquidated or
unascertained amount is to be valued at £1 for the purpose of voting unless theconvenor, or in the case of a meeting the chair, decides to put a higher value on it.
64(3)[Secured Creditors] A Secured Creditor is entitled to vote only in respect of thebalance (if any) of Debt after deducting the value of Security as estimated by the
Secured Creditor.

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64(4) [Vote cast not changeable] A vote cast in a Decision Procedure which is not ameeting may not be changed.
64(5) [Decision to be made] For the decision to be made, the convenor must receiveat least one valid vote on or before the Decision Date.
65 Admission and rejection of Proofs
65(1)[Power to admit] The convenor, or chair in the case of a meeting, has the power
to admit or reject a Creditor’s Proof for the purpose of entitlement to vote. The poweris exercisable with respect to the whole or any part of the Proof, and whether theclaim is secured or unsecured.
65(2)[Appeal from decision] The convenor or chair’s decision on entitlement toparticipate is subject to appeal to the Court by any Creditor, or by the Debtor, within
28 days of the record of the decision being given, or such longer period as the Court
shall, in the special circumstances, allow.
65(3)[Voting subject to objection] If the convenor or chair is in doubt whether a
Proof should be admitted or rejected, it shall be marked as objected to and theCreditor shall be allowed to vote, subject to the vote being subsequently declaredinvalid if the objection to the claim is sustained.
65(4)[Where decision reversed] If, on an appeal, the convenor or chair’s decision isreversed or varied, or a Creditor’s vote is declared invalid, the Court may orderanother Decision Procedure to be convened, or make such other order as it thinks fit,provided that the Court considers the matter is such as to give rise to unfair prejudiceor a material irregularity.
65(5)[Costs of appeal] The convenor or chair is not personally liable for the costs
incurred by any person in respect of an appeal under this Paragraph unless the Court
so orders.
66 Majorities required for Creditor decisions
66(1)[Decisions by majority in value] Subject as follows, a decision in a Decision
Procedure is made when a majority of more than half in value of Creditors voting
have voted in favour of it.
66(2)[Decisions varying terms of Arrangement] In the case of a decision varying
the terms of the Arrangement, a majority of three-quarters or more in value ofCreditors voting in favour of it is required.
66(3)[Votes rendering decision invalid] A decision is not made if those voting
against it include more than half of the total value of Creditors who are not Associatesof the Debtor.
66(4)[Resolution for the appointment of Supervisor] In the case of a decision for
the appointment of a Supervisor:(a) if on any vote there are 2 nominees for appointment, the person who obtains themost support is appointed, provided that such support represents a majority invalue of all those voting; and(b) if there are 3 or more nominees, and one of them has a clear majority over bothor all of the others together, that one is appointed; and(c) in any other case, the convenor or chair shall continue to take votes(disregarding at each vote any nominee who has withdrawn and, if no nominee
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has withdrawn, the nominee who obtained the least support last time), until aclear majority is obtained for any one nominee.
66(5)[Resolution for joint appointment] The chair may put to a meeting a resolution
for the joint appointment of any 2 or more nominees.
67 Chair of meeting as proxy-holder
67 Where the chair at a meeting holds a proxy for a Creditor which requires him tovote for a particular resolution, and no other person proposes that resolution, he shallhimself propose it
68 Suspension/adjournment of meetings
68(1)[Suspension] The chair may, without an adjournment, declare the meetingsuspended for one or more periods not exceeding one hour in total (or, in exceptional
circumstances, such longer total period during the same day at the chair’s discretion).
68(2)[Adjournment] The chair may (and must if the meeting so resolves) adjourn themeeting, provided that if the chair is the Supervisor and a resolution has been
proposed for the Supervisor’s removal, the chair shall not adjourn the meeting without
the consent of at least one half in value of the Creditors attending and entitled to vote.
68(3)[Period of adjournment] An adjournment under this Paragraph shall not be fora period of more than 14 days after the date on which the meeting was originally held,or such longer period as the Court may allow.
68(4)[Use of Proofs and proxies at adjourned meeting] Where a meeting is
adjourned under this Paragraph, Proofs and proxies may be used if lodged at any time
up to or at the adjourned meeting.
69 Record of Creditor decisions
69(1)[Record of a decision] The convenor, or chair in the case of a meeting, mustcause a record of the Decision Procedure to be kept. In the case of a meeting, therecord must be in the form of a minute of the meeting. The record must be signed by
the convenor or chair and retained as part of the records of the Arrangement.
69(2)[List of Creditors participating] The convenor or chair shall also cause to bemade and kept a list of all the Creditors who participated and the amount of theirclaims.
69(3)[Record of decision made] The record of the decision shall include a record of
the decisions made and how creditors voted.
69(4)[Record of decision to be circulated] The record of the decision referred to in
Sub-paragraph (3) shall be sent to the Creditors and the Debtor.
PART XI: PROVISIONS FOLLOWING BREACH OF THE ARRANGEMENT
70
70
(a)
(b)

Breach by the Debtor of the terms of the Arrangement
The Debtor shall be regarded as in breach of the Arrangement if:
the Debtor fails to comply with any obligation under the Arrangement;
information which was false or misleading in any material particular or contains
any material omissions:Page 23 of 27

(i)

(c)

was contained in any statement of affairs or other document supplied by
the Debtor under Part VIII under the Act to any person, or(ii)
was otherwise made available by the Debtor to the Creditors at or inconnection with any meeting of Creditors held, or any decision taken, in
connection with the Arrangement, or
the Debtor fails to do all such things as may for the purposes of the Arrangement
have been reasonably required by the Supervisor.

71 Procedure following breach71(1)[Notice of Breach] If, at any time, it appears to the Supervisor that the Debtor isin breach of the Arrangement, then, unless such breach is remedied forthwith or theSupervisor has already presented a petition for the Debtor’s bankruptcy, theSupervisor shall as soon as practicable issue to the Debtor a notice (“Notice ofBreach”) identifying the breach and requiring the Debtor within one month of sending
the notice:(a) to remedy the breach if it is capable of being remedied, and,(b) if the Supervisor thinks fit, to give a full explanation of the breach.
71(2)[Remedy of breach] If, within the one month period referred to in Subparagraph (1), or such longer period not exceeding a further one month as theSupervisor shall reasonably allow, the Debtor:(a) remedies the breach of the Arrangement;(b) if so required in the Notice of Breach, provides a full explanation of the breach,and(c) pays to the Supervisor such sum (if any) as the Supervisor may reasonably
require to compensate the Creditors for any reduction in Dividend caused by the
Debtor’s breach,no further action shall be taken against the Debtor save that the Supervisor shall report
the breach to the Creditors in the next progress and prospects report under Rule 8.28
(Supervisor’s accounts and reports), or on the next convenient occasion, if earlier.
71(3)[Notice of Termination/bankruptcy petition] If the Debtor has not done those
things specified in Sub-paragraph (2) by the time specified or allowed, the Supervisor
shall as soon as practicable seek a decision of the creditors to resolve whether or not
to do the following things:(i) issue a notice (“Notice of Termination”) terminating the Arrangement by reasonof the Debtor’s breach;(ii) present a petition for the Debtor’s bankruptcy;(iii) vary the terms of the Arrangement under Paragraph 81;(iv) take no action.
71(4)[Supervisor’s duty] If the Creditors decide to issue a Notice of Termination
and/or to present a bankruptcy petition against the Debtor, the Supervisor shall do so
as soon as practicable.
71(5)[Copies of Notice of Termination] A copy of any Notice of Termination issued
by the Supervisor shall be sent to the Debtor and Creditors as set out in Paragraph 11.

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72 Retention of funds by Supervisor
72 The Supervisor shall, at all times during the course of the Arrangement, retain
sufficient of the funds coming into the Arrangement as represents the Supervisor’s
best estimate of the costs of petitioning for the Debtor’s bankruptcy should theCreditors so decide under the previous Paragraph hereof. Such costs shall be provided
for in priority to any other costs of the Arrangement.
PART XII: CONDITIONS WHERE TAX AUTHORITIES ARE CREDITORS
73 Claims by HM Revenue and Customs
73(1) HM Revenue and Customs’ provisional claim in the Arrangement will include(i) any tax credit overpayment and (ii) Self-Assessment payments on account due forthe tax year which the Arrangement is approved, PAYE/SC/NIC deductions due to thedate of approval, plus any other earlier unpaid liabilities
73(2) HM Revenue and Customs’ final claim in the Arrangement will additionally
include the Self-Assessment balancing adjustment for the tax year in which the
Arrangement is approved due with the Self-Assessment Return on the 31 January of
the following year.
74 Income commencing after approval
74 The Debtor shall be responsible for payment of Self-Assessment/NIC on any
source of income that commences after the date of approval of the Arrangement.
75 Post approval statutory returns and payments
75 All statutory returns and payments due to HM Revenue and Customs post
approval shall be provided on or before the date they fall due.
76 Overdue accounts and returns
76 All statutory accounts and returns overdue at the date of the approval of the
Arrangement must be provided to HM Revenue and Customs within 3 months of theapproval date together with any other information or explanations required.
77 Funds to be paid to Supervisor
77 The Debtor’s monthly provision for income tax/NIC as it appears in the income
and expenditure statement shall, from the date of approval of the Arrangement to the 5April ending the tax year in which the Arrangement is approved, be paid to theSupervisor for the benefit of the Arrangement.
78 Restriction on payment of dividend
78 No non preferential Dividend will be made until (i) the HM Revenue andCustoms Self-Assessment return for the tax year in which the Arrangement isapproved (ii) a VAT or other levy or duty return due to HM Revenue and Customs to
the approval date, has been filed or (iii) an HM Revenue and Customs Determination

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and/or a Customs assessment has been made and the Supervisor has admitted their
final claims.
79 Set-off of repayments
79 During the currency of the Arrangement, any tax/excise/VAT or otherrepayments that become due to the Debtor by HM Revenue and Customs for periods
for which claims may arise under the Arrangement, shall be offset against either
department’s claims in the Arrangement. Any remaining surplus shall be similarly
applied to the claims of other government departments before being offered to theSupervisor for the benefit of the Arrangement. Any repayments for any later periods
shall be offset against any post approval debts due to HM Revenue and Customs. Anyremaining surplus will then be treated as a windfall and offered to the Supervisor forthe benefit of the Arrangement.
PART XIII: MISCELLANEOUS PROVISIONS
80 Third Party obligations
80(1)[Application of Paragraph] This Paragraph applies where the Proposal
includes any obligation on the part of a person other than the Supervisor or Debtor to
pay moneys, transfer assets or do any other thing.
80(2)[Evidence of agreement] The third party shall sign the Proposal or such otherdocument evidencing the agreement to be bound by the obligation as the Supervisor
shall reasonably require.
80(3)[Enforcement of obligation] The obligations of the third party shall be
enforceable by the Supervisor, or by the Debtor at the direction of the Supervisor.
80(4)[Failure a default of arrangement] The failure by the third party to carry out
the obligation when due shall constitute a breach of the Arrangement.
81 Variation of the Arrangement81(1)[Variation with Creditors’ approval] The provisions of this Arrangement may
be amended by a Decision Procedure of the Creditors.
81(2)[Consent of Debtor/third party to variation required] No variation of theterms of the Arrangement shall be of any effect unless made with the consent of the
Debtor and any third party affected thereby.
81(3)[Saving for certain rights] No variation which restricts the following rights
shall be of effect:(a) the right of any Secured Creditor to enforce Security, except with the Secured
Creditor’s consent;(b) the right of any Creditor to present a bankruptcy petition under section 264(1)(c)of the Act for default in connection with Arrangement;(c) the right of a Preferential Creditor to be paid in priority to other Creditors,
except with that Creditor’s consent;(d) the right of a Preferential Creditor to be paid pro rata with other Preferential
Creditors, except with that Creditor’s consent.

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81(4)[Unfair prejudice and material irregularity] No variation shall be of effect if
it unfairly prejudices the rights of any Creditor or if there has been any material
irregularity in the operation of the provisions of this Paragraph.
81(5)[Restriction on variation] No variation shall be of effect if it causes the
Arrangement to cease to be a voluntary arrangement within Part VIII of the Act.
82 Tax liabilities arising on realisations
82[Tax to be paid out of proceeds] Taxation liabilities of the Debtor arising on thesale or other realisation of any asset subject to the Arrangement shall, in so far as
those proceeds are sufficient, be discharged out of the sale proceeds of the asset inquestion.
83 Invalidity and/or illegality
83 If any provision or part of the Arrangement is found to be contrary to the Act orRules, illegal, invalid or contrary to public policy, that will not affect the validity of
the remainder of the Arrangement and the provision or part of the Arrangement inquestion shall be construed accordingly.
VERSION 4
January 2018

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