Source: http://uklaws.org/statutory/instruments_28/doc28769.htm
Timestamp: 2018-10-22 13:20:42
Document Index: 326487725

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The Insolvency (Scotland) Amendment Rules 2002
Statutory Instrument 2002 No. 2709 (S. 10)
2002 No. 2709 (S. 10)
The Secretary of State, in the exercise of the powers conferred on her by section 411 of the Insolvency Act 1986[1], and of all other powers enabling her in that behalf, hereby makes the following Rules -
1. - (1) These Rules may be cited as the Insolvency (Scotland) Amendment Rules 2002 and shall come into force on 1st January 2003.
2. - (1) In these Rules references to the "principal Rules" are to the Insolvency (Scotland) Rules 1986[2] and a Rule referred to by number alone means the Rule so numbered in the principal Rules.
3.In Rule 0.2 (interpretation), after the definition of "accounting period" in paragraph (1), insert -
" "authorised person" is a reference to a person who is authorised pursuant to section 389A[3] of the Act to act as nominee or supervisor of a voluntary arrangement proposed or approved under Part I or Part VIII of the Act.".
Amendments to Parts 1 and 7 of the principal Rules
4. - (1) Subject to paragraph (2), Parts 1 and 7 of the principal Rules have effect subject to the amendments set out respectively in Parts 1 and 2 of the Schedule to these Rules.
(2) The amendments to Parts 1 and 7 of the principal Rules set out respectively in Parts 1 and 2 of the Schedule to these Rules do not apply in relation to a voluntary arrangement under Part I of the Act where -
and Parts 1 and 7 of the principal Rules without the amendments made in Parts 1 and 2 of the Schedule to these Rules shall continue to apply in such cases.
Amendment to Schedule 4 to the principal Rules
5.In Schedule 4 to the principal Rules the entry relating to Rule 1.24 is deleted.
6. - (1) Subject to paragraph (2), in Schedule 5 to the principal Rules, for Forms 1.1 (Scot) to 1.4 (Scot) there are substituted Forms 1.1 (Scot) to 1.19 (Scot) as set out in Part 3 of the Schedule to these Rules.
(2) Forms 1.1 (Scot) to 1.19 (Scot) are for use in relation to any voluntary arrangement under Part I of the Act other than any of the cases mentioned in paragraph (2) of Rule 4 to these Rules and in those cases Forms 1.1 (Scot) to 1.4 (Scot) in Schedule 5 to the principal Rules, instead of those substituted by Part 3 of the Schedule to these Rules, shall continue to be used.
SCHEDULERules 4(1), 6(1) and 6(2)
(d) Chapters 5 and 6 apply in all the three cases mentioned in sub-paragraphs (a) to (c) above; and
(e) Chapter 7 applies where the proposal is made by the directors of an eligible company with a view to obtaining a moratorium."; and
(b) for sub-paragraph (o) of paragraph (2) there is substituted -
" (o) the name, address and qualification of the person proposed as supervisor of the voluntary arrangement, and confirmation that he is either qualified to act as an insolvency practitioner in relation to the company or is an authorised person in relation to the company; and.".
1.8. - (1) Where a person other than the nominee intends to apply to the court under section 2(4) [6] for the nominee to be replaced (except in any case where the nominee has died), he shall give to the nominee at least 7 days' notice of his application.
(2) Where the nominee intends to apply to the court under section 2(4) to be replaced, he shall give at least 7 days' notice of his application to the person intending to make the proposal.
[FORM 1.8 (Scot)]
(3) No appointment of a replacement nominee shall be made by the court unless there is lodged in court a statement by the replacement nominee -
(a) indicating his consent to act; and
Amendment to Rule 1.14
5.For paragraph (2) of Rule 1.14 there is substituted -
" (2) The meetings may be held on the same day or on different days. If held on the same day, the meetings shall be held in the same place, but in either case the creditors' meeting shall be fixed for a time in advance of the company meeting.
(3) Where the meetings are not held on the same day, they shall be held within 7 days of each other.".
New Rule 1.14A
6.After Rule 1.14 insert -
" The Chairman at meetings
1.14A. - (1) Subject as follows, at both the creditors' meeting and the company meeting, and at any combined meeting, the convenor shall be chairman.
(2) If for any reason he is unable to attend, he may nominate another person to act as chairman in his place; but a person so nominated must be -
(a) a person qualified to act as an insolvency practitioner in relation to the company;
New Rules 1.15A and 1.15B
7.After Rule 1.15 there is inserted -
1.15A. - (1) Subject as follows, every creditor who has notice of the creditors' meeting is entitled to vote at the meeting or any adjournment of it.
1.15B. - (1) Subject as follows, at any creditors' meeting the chairman shall ascertain the entitlement of persons wishing to vote and shall admit or reject their claims accordingly.
(3) The chairman's decision on any matter under this Rule or under paragraph (3) of Rule 1.15A is subject to appeal to the court by any creditor or member of the company.
(7) The chairman is not personally liable for any expenses incurred by any person in respect of an appeal under this Rule.".
Substitution of Rule 1.16
8.For Rule 1.16 there is substituted -
" 1.16. - (1) If the chairman thinks fit, the creditors' meeting and the company meeting may be held together.
(5) If following the final adjournment of the creditors' meeting the proposal (with or without modifications) has not been approved by the creditors it is deemed rejected.".
Amendment to Rule 1.17
9.In Rule 1.17 -
Amendments to Rule 1.18
10.In Rule 1.18 -
"or is an authorised person in relation to the company".
New Rule 1.18A
11.After Rule 1.18 there is inserted -
1.18A. - (1) This Rule applies where the court makes an order under section 4A(6)[7].
(2) The member of the company who applied for the order shall serve certified copies of it on -
(5) The person on whose application the order of the court was made shall, within 7 days of the order, deliver a certified copy interlocutor to the registrar of companies.".
12.In paragraph (1) of Rule 1.19 for the words "After the approval of the voluntary arrangement - " there is substituted "Where the decision approving the voluntary arrangement has effect under section 4A - ".
Amendment to Rule 1.22
13.In sub-paragraph (a) of Rule 1.22 for the words "approval of the arrangement" there is substituted "decision approving the arrangement taking effect under section 4A".
Substitution of Rule 1.23
14.For Rule 1.23 there is substituted -
1.23. - (1) Not more than 28 days after the final completion or termination of the voluntary arrangement, the supervisor shall send to creditors and members of the company who are bound by it a notice that the voluntary arrangement has been fully implemented or (as the case may be) has terminated.
[FORM 1.4 (Scot)]
Omission of rule 1.24
15.Rule 1.24 is omitted.
16.After Rule 1.24 the following provisions[8] are inserted -
" CHAPTER 7
1.25. - (1) The document containing the proposal referred to in paragraph 6(1)(a) of Schedule A1 to the Act shall -
(c) state the address to which notice of the consent of the nominee to act and the documents referred to in Rule 1.28 shall be sent.
1.26. - (1) The documents required to be delivered to the nominee pursuant to paragraph 6(1) of Schedule A1 to the Act shall be delivered to the nominee himself or to a person authorised to take delivery of documents on his behalf.
1.27. -
[FORM 1.6 (Scot)]
(1) The statement of the company's affairs required to be delivered to the nominee pursuant to paragraph 6(1)(b) of Schedule A1 to the Act shall be delivered to the nominee no later than 7 days after the delivery to him of the document setting out the terms of the proposed voluntary arrangement or such longer time as he may allow.
(3) The statement of affairs shall be made up to a date not earlier than 2 weeks before the date of the delivery of the document containing the proposal for the voluntary arrangement to the nominee under Rule 1.26(1).
However, the nominee may allow an extension of that period to the nearest practicable date (not earlier than 2 months before the date of delivery of the documents referred to in Rule 1.26(1)) and if he does so, he shall give a statement of his reasons in writing to the directors.
1.28. -
[FORM 1.5 (Scot)]
(1) The nominee shall submit to the directors the statement required by paragraph 6(2) of Schedule A1 to the Act within 28 days of the submission to him of the document setting out the terms of the proposed voluntary arrangement.
[FORM 1.8(Scot)]
1.29. -
[FORMS 1.5(Scot), 1.6(Scot), 1.7(Scot), 1.8(Scot) and 1.9(Scot)]
(1) Where pursuant to paragraph 7 of Schedule A1 to the Act the directors lodge the document and statements referred to in that paragraph in court those documents shall be delivered together with 4 copies of a schedule listing them within 3 working days of the date of the submission to them of the nominee's statement under paragraph 6(2) of Schedule A1 to the Act.
(2) When the directors lodge the document and statements referred to in paragraph (1), they shall also lodge -
(a) a copy of any statement of reasons made by the nominee pursuant to Rule 1.27(3); and
(b) a copy of the nominee's comments on the proposal submitted to them pursuant to Rule 1.28(2).
(3) The copies of the schedule shall be endorsed by the court with the date on which the documents were lodged in court and 3 copies of the schedule certified by the court shall be returned by the court to the person who lodged the documents in court.
[FORM 1.6(Scot)]
(4) The statement of affairs required to be lodged under paragraph 7(1)(b) of Schedule A1 to the Act shall comprise the same particulars as required by Rule 1.5(2).
1.30. - (1) After receiving the copies of the schedule endorsed by the court under Rule 1.29(3), the directors shall forthwith serve two of them on the nominee and one on the company.
[FORM 1.10(Scot)]
(2) Forthwith after receiving the copies of the schedule pursuant to paragraph (1) the nominee shall advertise the coming into force of the moratorium once in the Edinburgh Gazette, and once in such newspaper as he thinks most appropriate for ensuring that its coming into force comes to the notice of the company's creditors.
(3) The nominee shall forthwith notify the registrar of companies, the keeper of the register of inhibitions and adjudications, the company and any petitioning creditor of the company of whose claim he is aware of the coming into force of the moratorium and such notification shall specify the date on which the moratorium came into force.
(4) The nominee shall give notice of the coming into force of the moratorium specifying the date on which it came into force to any messenger-at-arms or sheriff officer who, to his knowledge, is instructed to execute diligence or other legal process against the company or its property.
[FORM 1.12(Scot)]
[FORM 1.13(Scot)]
(1) The nominee shall forthwith notify the registrar of companies, the keeper of the register of inhibitions and adjudications and the court of a decision taking effect pursuant to paragraph 36 of Schedule A1 to the Act to extend or further extend the moratorium and such notice shall specify the new expiry date of the moratorium.
(2) Where an order is made by the court extending or further extending or renewing or continuing a moratorium, the nominee shall forthwith after receiving a copy of the same give notice to the registrar of companies and the keeper of the register of inhibitions and adjudications and together with the notice shall send a certified copy interlocutor to the registrar of companies.
1.32. -
(1) After the moratorium comes to an end, the nominee shall forthwith advertise its coming to an end once in the Edinburgh Gazette, and once in such newspaper as he thinks most appropriate for ensuring that its coming to an end comes to the notice of the company's creditors, and such notice shall specify the date on which the moratorium came to an end.
[FORM 1.14(Scot)]
[FORM 1.15(Scot)]
(2) The nominee shall forthwith give notice of the ending of the moratorium to the registrar of companies, the court, the keeper of the register of inhibitions and adjudications, the company and any creditor of the company of whose claim he is aware and such notice shall specify the date on which the moratorium came to an end.
Inspection of court file
1.33.Any director, member or creditor of the company is entitled, at all reasonable times on any business day, to inspect the court file.
1.34. - (1) This Rule applies in any case where the company makes an application to the court under paragraph 20 of Schedule A1 to the Act for leave to dispose of property of the company which is subject to a security, or goods in possession of the company under an agreement to which that paragraph relates.
(4) The court shall send two certified copies of the order to the company, who shall send one of them to that person or owner.
[FORM 1.16(Scot)]
[FORM 1.17(Scot)]
1.35.Where the nominee withdraws his consent to act, he shall, pursuant to paragraph 25(5) of Schedule A1 to the Act, forthwith give notice of his withdrawal and the reason for withdrawing his consent to act to -
1.36. - (1) Where the directors intend to make an application to the court under paragraph 28 of Schedule A1 to the Act for the nominee to be replaced, they shall give to the nominee at least 7 days' notice of their application.
(3) No appointment of a replacement nominee shall be made by the court unless there is lodged in court a statement by the replacement nominee indicating his consent to act.
[FORM 1.19(Scot)]
1.37.Where a person is appointed as a replacement nominee he shall forthwith give notice of his appointment to -
Applications to court under paragraph 26 or 27 of Schedule A1 to the Act
1.38.Where any person intends to make an application to the court pursuant to paragraph 26 or 27 of Schedule A1 to the Act, he shall give to the nominee at least 7 days' notice of his application.
1.39. - (1) The provisions of Chapter 1 of Part 7 (Meetings) shall apply with regard to the meetings of the company and of the creditors which are summoned pursuant to paragraph 29(1) of Schedule A1 to the Act, subject to the provisions in this section of this Chapter.
(2) The provisions of Rules 1.14, 1.14A and 1.15 shall apply with regard to meetings as mentioned in paragraph (1) above as they apply to meetings of the company and of creditors which are summoned under section 3.
1.40. - (1) Where the nominee summons meetings of creditors and the company pursuant to paragraph 29(1) of Schedule A1 to the Act, each of those meetings shall be summoned for a date that is not more than 28 days from the date on which the moratorium came into force.
(4) Each notice sent under this Rule shall specify the court in which the documents relating to the obtaining of the moratorium were lodged and state the effect of paragraphs (1), (2) and (3) of Rule 1.43 (requisite majorities (creditors)); and with each notice there shall be sent -
1.41. - (1) Subject as follows, every creditor who has notice of the creditors' meeting is entitled to vote at the meeting or any adjournment of it.
Procedure for admission of creditors claims for voting purposes
1.42. - (1) Subject as follows, at any creditors' meeting the chairman shall ascertain the entitlement of persons wishing to vote and shall admit or reject their claims accordingly.
(3) The chairman's decision on any matter under this Rule or under paragraph (3) of Rule 1.41 is subject to appeal to the court by any creditor or member of the company.
(7) The chairman is not personally liable for any expenses incurred by any person in respect of an appeal under this Rule.
1.43. - (1) Subject as follows, at the creditors' meeting for any resolution to pass approving any proposal or modification there must be a majority in excess of three-quarters in value of the creditors present in person or by proxy and voting on the resolution.
(3) At a meeting of the creditors for any resolution to pass extending (or further extending) a moratorium, or to bring a moratorium to an end before the end of the period of any extension, there must be a majority in excess of three-quarters in value of the creditors present in person or by proxy and voting on the resolution. For this purpose a secured creditor is entitled to vote in respect of the amount of his claim without deducting the value of his security.
1.44. - (1) If the chairman thinks fit, the creditors' meeting and the company meeting may be held together.
(2) The chairman may, and shall if it is so resolved at the meeting in question, adjourn that meeting, but any adjournment shall not be to a day which is more than 14 days after the date on which the moratorium (including any extension) ends.
(3) If the meetings are adjourned under paragraph (2), notice of the fact shall be given by the nominee forthwith to the court.
(4) If following the final adjournment of the creditors' meeting the proposal (with or without modifications) has not been approved by the creditors, it is deemed rejected.
1.45. -
[FORMS 1.1(Scot), 1.2(Scot), 1.3(Scot) and 1.4(Scot)]
(1) Where a decision approving the arrangement has effect under paragraph 36 of Schedule A1 to the Act, the directors shall forthwith do all that is required for putting the supervisor into possession of the assets included in the arrangement.
(2) Subject to paragraph (3), Rules 1.17, 1.18, 1.18A and 1.20 to 1.23 apply.
(a) in paragraph (4) of Rule 1.17 the reference to section 4(6) is to be read as a reference to paragraph 30(3) of Schedule A1 to the Act;
(b) in paragraph (5) of Rule 1.17 the reference to section 4A is to be read as a reference to paragraph 36 of Schedule A1 to the Act;
(c) in paragraph (1) of Rule 1.18A the reference to section 4A(6) is to be read as a reference to paragraph 36(5) of Schedule A1 to the Act;
(d) in paragraph (1) of Rule 1.20 the reference to section 6 is to be read as a reference to paragraph 38 of Schedule A1 to the Act and the references in paragraphs (2) and (4) to the administrator or liquidator shall be ignored;
(e) in paragraph (3) of Rule 1.20 the reference to section 6(4)(b) is to be read as a reference to paragraph 38 (4)(b) of Schedule A1 to the Act; and
(f) in sub-paragraph (a) of paragraph (1) of Rule 1.22 the reference to section 4A is to be read as a reference to paragraph 36 of Schedule A1 to the Act.".
AMENDMENTS TO PART 7 OF THE PRINCIPAL RULES
Amendment to Rule 7.10
17.Paragraph (2) of Rule 7.10 is omitted.
FORMS FOR INSERTION INTO SCHEDULE 5 TO THE PRINCIPAL RULES
These Rules make a number of changes to the Insolvency (Scotland) Rules 1986 ("the principal Rules"). These are set out in the Schedule to these Rules.
Part 1 of the Schedule to these Rules makes a number of amendments to the provisions of Part 1 of the principal Rules which relate to company voluntary arrangements. Many of these are consequential on amendments made to the Insolvency Act 1986 by the Insolvency Act 2000. In particular -
(a) a number of amendments are made in consequence of the bringing into force of section 389A of the Insolvency Act 1986 which creates the possibility of qualified persons other than insolvency practitioners acting as nominees or supervisors in relation to company voluntary arrangements;
(b) provision is made to permit the holding of the meetings of members and creditors on different days (previously they had to be held on the same day) (see paragraph 5 of the Schedule which amends Rule 1.14(2) of the principal Rules);
(d) a number of amendments are made in consequence of the changes to the Insolvency Act 1986 by the insertion of a section 4A which provides that a voluntary arrangement is to have effect notwithstanding that the members of the company do not vote in favour of it (see for example paragraphs 10 and 11 of the Schedule to the Rules);
Part 2 of the Schedule makes a consequential amendment to Part 7 of the principal Rules.
Part 3 of the Schedule makes a number of amendments to Schedule 5 to the principal Rules which sets out the forms for use in connection with insolvency proceedings. Amendments are made to the forms for use in connection with company voluntary arrangements.
The costs to business of the commencement of the provisions of the Insolvency Act 2000 are determined in the Regulatory Impact Assessment prepared for that Act. Copies of the assessment are available from Policy Unit, the Insolvency Service, 21 Bloomsbury Street, London WC1B 3QW.
[1] 1986 c. 45. The Insolvency Act was amended by the Insolvency Act 2000 (c. 39), the Insolvency Act 1986 (Amendment) Regulations 2002 (S.I. 2002/1037), the Insolvency Act 1986 (Amendment No. 2) Regulations 1986 (S.I. 2002/1240) and the Insolvency Act 1986 (Amendment) (No. 3) Regulations 2002 (S.I. 2002/1990).back
[2] S.I. 1986/1915: amended by S.I. 1987/1921.back
[4] Schedule A1 is inserted into the Insolvency Act 1986 (c. 45) by section 1 of, and Schedule 1 to, the Insolvency Act 2000 (c. 39).back
[7] Section 4A was inserted into the Insolvency Act 1986 by section 2 of, and paragraph 5 of Schedule 2 to, the Insolvency Act 2000.back
[8] The provisions inserted into the Rules by paragraph 16 are to give effect to the provisions of Schedule A1 to the Insolvency Act 1986 which was inserted into the Insolvency Act 1986 by section 1 of, and paragraph 4 of Schedule 1 to, the Insolvency Act 2000. Schedule A1 is amended by S.I. 2002/1990.back
ISBN 0 11 042934 6