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The Insolvency Rules (Northern Ireland) 1991

Type Ni-Statutory-Rule

Publication 1991-08-05

State In force

Jurisdiction Northern Ireland

Department Government Printer for Northern Ireland

Source legislation.gov.uk

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Reform history JSON API

(b) if a winding-up order is made, out of the assets, in the prescribed order of priority,

or, in either case (the relevant funds being insufficient), out of the deposit under Rule 4.030.

(4) Unless the court otherwise directs, in a case falling within paragraph (3)(a) the provisional liquidator may retain out of the company's property such sums or property as are or may be required for meeting his remuneration and expenses.

(5) Where a person other than the official receiver has been appointed provisional liquidator, and the official receiver has taken any steps for the purpose of obtaining a statement of affairs or has performed any other duty under the Rules, he shall pay the official receiver such sum (if any) as the court may direct.

Termination of appointment

4.034

(1) The appointment of the provisional liquidator may be terminated by the court on his application, or on that of any of the persons specified in Rule 4.027(1).

(2) If the provisional liquidator's appointment terminates, in consequence of the dismissal of the winding-up petition or otherwise, the court may give such directions as it thinks fit with respect to the accounts of his administration or any other matters which it thinks appropriate.

CHAPTER 6 — STATEMENT OF AFFAIRS AND OTHER INFORMATION

Notice requiring statement of affairs

4.035

(NO CVL APPLICATION)

(1) This Rule and Rules 4.036 and 4.039 to 4.041 apply where the official receiver determines to require a statement of the company's affairs to be made out and submitted to him in accordance with Article 111.

(2) He shall send notice to each of the persons whom he considers should be made responsible under that Article, requiring them to prepare and submit the statement.

(3) The persons to whom that notice is sent are referred to in this Chapter as “the deponents”.

(4) The notice shall inform each of the deponents—

(a) of the names and addresses of all others (if any) to whom the same notice has been sent;

(b) of the time within which the statement must be delivered;

(d) of the application to him, and to each of the other deponents, of Article 199 (duty to provide information, and to attend on the official receiver if required).

(5) The official receiver shall, on request, furnish a deponent with instructions for the preparation of the statement and with the forms required for that purpose.

Verification and filing

4.036

(NO CVL APPLICATION)

(1) The statement of affairs shall be in Form 4.18, shall contain all the particulars required by that form and shall be verified by affidavit by the deponents (using the same form).

(2) The official receiver may require any of the persons mentioned in Article 111(3) to submit an affidavit of concurrence, stating that he concurs in the statement of affairs.

(3) An affidavit of concurrence made under paragraph (2) may be qualified in respect of matters dealt with in the statement of affairs, where the maker of the affidavit is not in agreement with the deponents, or he considers the statement to be erroneous or misleading, or he is without the direct knowledge necessary for concurring in the statement.

(4) The statement of affairs shall be delivered to the official receiver by the deponent making the affidavit of verification (or by one of them, if more than one), together with a copy of the verified statement.

(5) Every affidavit of concurrence shall be delivered to the official receiver by the person who makes it, together with a copy.

(6) The official receiver shall file the verified copy of the statement and the affidavits of concurrence (if any) in court.

(7) The affidavit may be sworn before an official receiver or a deputy official receiver, or before an officer of the Department or the court duly authorised in that behalf.

Statement of affairs

4.037-CVL

(1) This Rule applies with respect to the statement of affairs made out by the liquidator under Article 81(3) or (as the case may be) by the directors under Article 85(1).

(2) Where it is made out by the liquidator, the statement of affairs shall be delivered by him to the registrar within 7 days after the creditors' meeting summoned under Article 81(2).

(3) Where it is made out by the directors under Article 85(1) the statement of affairs shall be delivered by them to the liquidator in office following the creditors' meeting summoned under Article 84 forthwith after that meeting has been held; and he shall, within 7 days, deliver it to the registrar.

(4) A statement of affairs under Article 85(1) may be made up to a date not more than 14 days before that on which the resolution for voluntary winding up is passed by the company.

Copy statement of affairs

4.038-CVL

Where a liquidator is nominated by the company at a general meeting held on a day prior to that on which the creditors' meeting summoned under Article 84 is held, the directors shall forthwith after his nomination or the making of the statement of affairs, whichever is the later, deliver to him a copy of the statement of affairs.

Limited disclosure

4.039

(NO CVL APPLICATION)

(1) Where the official receiver thinks that it would prejudice the conduct of the liquidation for the whole or part of the statement of affairs to be disclosed, he may apply to the court for an order of limited disclosure in respect of the statement, or any specified part of it.

(2) The court may on the application order that the statement or, as the case may be, the specified part of it be not filed, or that it is to be filed separately and not be open to inspection otherwise than with leave of the court.

Release from duty to submit statement of affairs; extension of time

4.040

(NO CVL APPLICATION)

(1) The power of the official receiver under Article 111(5) to give a release from the obligation imposed by that Article, or to grant an extension of time, may be exercised at the official receiver's own discretion, or at the request of any deponent.

(2) A deponent may, if he requests a release or extension of time and it is refused by the official receiver, apply to the court for it.

(3) The court may, if it thinks that no sufficient cause is shown for the application, dismiss it; but it shall not do so unless the applicant has had an opportunity to attend the court for an ex parte hearing, of which he has been given at least 7 days' notice.

(4) If the application is not dismissed under paragraph (3), the court shall fix a venue for it to be heard, and give notice to the deponent accordingly.

(5) The deponent shall, at least 14 days before the hearing date, send to the official receiver a notice stating the venue and accompanied by a copy of the application, and of any evidence which he (the deponent) intends to adduce in support of it.

(6) The official receiver may appear and be heard on the application; and, whether or not he appears, he may file a written report of any matters which he considers ought to be drawn to the court's attention.

(7) If a report is filed under paragraph (6), a copy of it shall be sent by the official receiver to the deponent, not later than 5 days before the hearing date.

(8) Sealed copies of any order made on the application shall be sent by the court to the deponent and the official receiver.

(9) On any application under this Rule the applicant's costs shall be paid in any event by him and, unless the court otherwise orders, no allowance towards them shall be made out of the assets.

Expenses of statement of affairs

4.041

(NO CVL APPLICATION)

(1) If any deponent cannot himself prepare a proper statement of affairs, the official receiver may, at the expense of the assets, employ some person or persons to assist in the preparation of the statement.

(2) At the request of any deponent, made on the grounds that he cannot himself prepare a proper statement, the official receiver may authorise an allowance, payable out of the assets, towards expenses to be incurred by the deponent in employing some person or persons to assist him in preparing it.

(3) Any such request by the deponent shall be accompanied by an estimate of the expenses involved; and the official receiver shall only authorise the employment of a named person or a named firm, being in either case approved by him.

(4) An authorisation given by the official receiver under this Rule shall be subject to such conditions (if any) as he thinks fit to impose with respect to the manner in which any person may obtain access to relevant books and papers.

(5) Nothing in this Rule relieves a deponent from any obligation with respect to the preparation, verification and submission of the statement of affairs, or to the provision of information to the official receiver or the liquidator.

(6) Any payment out of the assets under this Rule shall be made in the prescribed order of priority.

(7) Paragraphs (2) to (6) may be applied, on application to the official receiver by any deponent, in relation to the making of an affidavit of concurrence.

Expenses of statement of affairs

4.042-CVL

(1) Payment may be made out of the company's assets, either before or after the commencement of the winding up, of any reasonable and necessary expenses of preparing the statement of affairs under Article 85.

(2) Any payment under paragraph (1) is an expense of the liquidation.

(3) Where a payment under paragraph (1) is made before the commencement of the winding up, the director presiding at the creditors' meeting held under Article 84 shall inform the meeting of the amount of the payment and the identity of the person to whom it was made.

(4) The liquidator appointed under Article 86 may make a payment under paragraph (1) (subject to paragraph (5)); but if there is a liquidation committee, he must give the committee at least 7 days' notice of his intention to make it.

(5) A payment under paragraph (1) shall not be made by the liquidator to himself, or to any associate of his, otherwise than with the approval of the liquidation committee, the creditors, or the court.

(6) This Rule is without prejudice to the powers of the court under Rule 4.229 (voluntary winding up superseded by winding up by the court).

Submission of accounts

4.043

(NO CVL APPLICATION)

(1) Any of the persons specified in Article 199(3) shall, at the request of the official receiver, furnish him with accounts of the company of such nature, as at such date, and for such period, as he may specify.

(2) The period specified may begin from a date up to 3 years preceding the date of the presentation of the winding-up petition, or from an earlier date to which audited accounts of the company were last prepared.

(3) The court may, on the official receiver's application, require accounts for any earlier period.

(4) Rule 4.041 applies (with the necessary modifications) in relation to accounts to be furnished under this Rule as it applies in relation to the statement of affairs.

(5) The accounts shall, if the official receiver so requires, be verified by affidavit and (whether or not so verified) delivered to him within 21 days of the request under paragraph (1), or such longer period as he may allow.

(6) Two copies of the accounts and (where required) the affidavit shall be delivered to the official receiver by whoever is required to furnish them; and the official receiver shall file one copy in court (with the affidavit, if any).

Submission of accounts

4.044-CVL

(1) Any of the persons specified in Article 199(3) shall, at the request of the liquidator, furnish him with accounts of the company of such nature, as at such date, and for such period, as he may specify.

(2) The specified period for the accounts may begin from a date up to 3 years preceding the date of the resolution for winding up, or from an earlier date to which audited accounts of the company were last prepared.

(3) The accounts shall, if the liquidator so requires, be verified by affidavit and (whether or not so verified) delivered to him, with the affidavit if required, within 21 days from the request under paragraph (1), or such longer period as he may allow.

Expenses of preparing accounts

4.045-CVL

(1) Where a person is required under Rule 4.044-CVL to furnish accounts, the liquidator may, with the sanction of the liquidation committee (if there is one) and at the expense of the assets, employ some person or persons to assist in the preparation of the accounts.

(2) At the request of the person subject to the requirement, the liquidator may, with that sanction, authorise an allowance, payable out of the assets, towards expenses to be incurred by that person in employing others to assist him in preparing the accounts.

(3) Any such request shall be accompanied by an estimate of the expenses involved; and the liquidator shall only authorise the employment of a named person or a named firm, being in either case approved by him.

Further disclosure

4.046

(NO CVL APPLICATION)

(1) The official receiver may at any time require the deponents, or any one or more of them to submit (in writing) further information amplifying, modifying or explaining any matter contained in the statement of affairs, or in accounts submitted in pursuance of the Order or the Rules.

(2) The information shall, if the official receiver so directs, be verified by affidavit, and (whether or not so verified) delivered to him within 21 days of the requirement under paragraph (1), or such longer period as he may allow.

(3) Two copies of the documents containing the information and (where verification is directed) the affidavit shall be delivered by the deponent to the official receiver, who shall file one copy in court (with the affidavit, if any).

CHAPTER 7 — INFORMATION TO CREDITORS AND CONTRIBUTORIES

Reports by official receiver

4.047

(NO CVL APPLICATION)

(1) The official receiver shall, at least once after the making of the winding-up order, send a report to creditors and contributories with respect to the proceedings in the winding up, and the state of the company's affairs.

(2) The official receiver shall file in court a copy of any report sent under this Chapter.

Meaning of “creditors”

4.048

Any reference in this Chapter to creditors is to creditors of the company who are known to the official receiver or (as the case may be) the liquidator or, where a statement of the company's affairs has been submitted, are identified in the statement.

Report where statement of affairs lodged

4.049

(NO CVL APPLICATION)

(1) Where a statement of affairs has been submitted and filed in court, the official receiver shall send out to creditors and contributories a report containing a summary of the statement (if he thinks fit, as amplified, modified or explained by virtue of Rule 4.046) and such observations (if any) as he thinks fit to make with respect to it, or to the affairs of the company in general.

(2) The official receiver need not comply with paragraph (1) if he has previously reported to creditors and contributories with respect to the company's affairs (so far as known to him) and he is of opinion that there are no additional matters which ought to be brought to their attention.

Statement of affairs dispensed with

4.050

(NO CVL APPLICATION)

(1) This Rule applies where, in the company's case, release from the obligation to submit a statement of affairs has been granted by the official receiver or the court.

(2) As soon as may be after the release has been granted, the official receiver shall send to creditors and contributories a report containing a summary of the company's affairs (so far as within his knowledge), and his observations (if any) with respect to it, or to the affairs of the company in general.

(3) The official receiver need not comply with paragraph (2) if he has previously reported to creditors and contributories with respect to the company's affairs (so far as known to him) and he is of opinion that there are no additional matters which ought to be brought to their attention.

General rule as to reporting

4.051

(NO CVL APPLICATION)

(1) The court may, on the official receiver's application, relieve him of any duty imposed on him by this Chapter, or authorise him to carry out the duty in a way other than there required.

(2) In considering whether to act under this Rule, the court shall have regard to the cost of carrying out the duty, to the amount of the assets available, and to the extent of the interest of creditors or contributories, or any particular class of them.

Winding up stayed

4.052

(NO CVL APPLICATION)

(1) If proceedings in the winding up are stayed by order of the court, any duty of the official receiver to send reports under Rules 4.047 to 4.051 ceases.

(2) Where the court grants a stay, it may include in its order such requirements on the company as it thinks fit with a view to bringing the stay to the notice of creditors and contributories.

Information to creditors and contributories

4.053-CVL

The liquidator shall, within 28 days of a meeting held under Article 81 or 84, send to creditors and contributories of the company—

(a) a copy or summary of the statement of affairs, and

(b) a report of the proceedings at the meeting.

Further information where liquidation follows administration

4.054

Where under Article 118 the court appoints as the company's liquidator a person who was formerly its administrator and that person becomes aware of creditors not formerly known to him in his capacity as administrator, he shall send to those creditors a copy of any statement or report sent by him to creditors under Rule 2.19, so noted as to indicate that it is being sent under this Rule.

CHAPTER 8 — MEETINGS OF CREDITORS AND CONTRIBUTORIES

SECTION A: RULES OF GENERAL APPLICATION

First meetings

4.055

(NO CVL APPLICATION)

(1) If under Article 116(5) the official receiver decides to summon meetings of the company's creditors and contributories for the purpose of nominating a person to be liquidator in place of himself, he shall fix a venue for each meeting, in neither case more than 4 months from the date of the winding-up order.

(2) When for each meeting a venue has been fixed, notice of the meetings shall be given to the court and—

(a) in the case of the creditors' meeting, to every creditor who is known to the official receiver or is identified in the company's statement of affairs; and

(b) in the case of the contributories' meeting, to every person appearing (by the company's books or otherwise) to be a contributory of the company.

(3) Notice to the court shall be given forthwith, and the other notices shall be given at least 21 days before the date fixed for each meeting respectively.

(4) The notice to creditors shall specify a time and date, not more than 4 days before the date fixed for the meeting, by which they must lodge proofs and (if applicable) proxies, in order to be entitled to vote at the meeting; and the same applies in respect of contributories and their proxies.

(5) Notice of the meetings shall also be given by public advertisement.

(6) Where the official receiver receives a request by creditors under Article 116(5)(c) for meetings of creditors and contributories to be summoned, and it appears to him that the request is properly made in accordance with the Order, he shall—

(a) withdraw any notices previously given by him under Article l 16(5)(b) (that he has decided not to summon such meetings),

(b) fix the venue of each meeting for not more than 3 months from his receipt of the creditors' request, and

(7) Meetings summoned by the official receiver under this Rule are known respectively as “the first meeting of creditors” and “the first meeting of contributories”, and jointly as “the first meetings in the liquidation”.

(8) Where the company is an authorised institution or former authorised institution within the meaning of the Banking Act 1987[^f00010], additional notices are required by Rule 4.078.

First meeting of creditors

4.056-CVL

(1) This Rule applies in the case of a meeting of creditors summoned by the liquidator under Article 81 (where, in what starts as a members' voluntary winding up, he forms the opinion that the company will be unable to pay its debts) or a meeting under Article 84 (first meeting of creditors in a creditors' voluntary winding up).

(2) The notice summoning the meeting shall specify a venue for the meeting and the time (not earlier than 12.00 hours on the business day before the day fixed for the meeting) by which, and the place at which, creditors must lodge any proxies necessary to entitle them to vote at the meeting.

(3) Where the company is an authorised institution or former authorised institution within the meaning of the Banking Act 1987, additional notices are required by Rule 4.078.

Business at first meetings in the liquidation

4.057

(NO CVL APPLICATION)

(1) At the first meeting of creditors, no resolutions shall be taken other than the following—

(a) a resolution to appoint a named insolvency practitioner to be liquidator, or two or more insolvency practitioners as joint liquidators;

(b) a resolution to establish a liquidation committee;

(c) (unless it has been resolved to establish a liquidation committee) a resolution specifying the terms on which the liquidator is to be remunerated, or to defer consideration of that matter;

(d) (if, and only if, two or more persons are appointed to act jointly as liquidator) a resolution specifying whether acts are to be done by both or all of them, or by only one ;

(e) (where the meeting has been requisitioned under Article 116), a resolution authorising payment out of the assets, as an expense of the liquidation, of the cost of summoning and holding the meeting and any meeting of contributories so requisitioned and held;

(f) a resolution to adjourn the meeting for not more than 3 weeks;

(g) any other resolution which the chairman thinks it right to allow for special reasons.

(2) The same applies as regards the first meeting of contributories, but that meeting shall not pass any resolution to the effect of paragraph (1)(c) or (e).

(3) At neither meeting shall any resolution be proposed which has for its object the appointment of the official receiver as liquidator.

Business at meeting under Article 81 or 84

4.058-CVL

Rule 4.057(1), except sub-paragraph (e), applies to a creditors' meeting under Article 81 or 84.

Effect of adjournment of company meeting

4.059-CVL

Where a company meeting at which a resolution for voluntary winding up is to be proposed is adjourned, any resolution passed at a meeting under Article 84 held before the holding of the adjourned company meeting only has effect on and from the passing by the company of a resolution for winding up.

Report by director, etc.

4.060-CVL

(1) At any meeting held under Article 84 where the statement of affairs laid before the meeting does not state the company's affairs as at the date of the meeting, the directors of the company shall cause to be made to the meeting, either by the director presiding at the meeting or by another person with knowledge of the relevant matters, a report (written or oral) on any material transactions relating to the company occurring between the date of the making of the statement of affairs and that of the meeting.

(2) Any such report shall be recorded in the minutes of the meeting kept under Rule 4.077.

General power to call meetings

4.061

(1) The official receiver or the liquidator may at any time summon and conduct meetings of creditors or of contributories for the purpose of ascertaining their wishes in all matters relating to the liquidation; and in relation to any meeting summoned under the Order or the Rules, the person summoning it is referred to as “the convener”.

(2) When (in either case) a venue for the meeting has been fixed, notice of it shall be given by the convener—

(a) in the case of a creditors' meeting, to every creditor who is known to him or is identified in the company's statement of affairs; and

(b) in the case of a meeting of contributories, to every person appearing (by the company's books or otherwise) to be a contributory of the company.

(3) Notice of the meeting shall be given at least 21 days before the date fixed for it, and shall specify the purpose of the meeting.

(4) The notice shall specify a time and date, not more than 4 days before the date fixed for the meeting, by which, and the place at which, creditors must lodge proofs and proxies, in order to be entitled to vote at the meeting; and the same applies in respect of contributories and their proxies. (NO CVL APPLICATION)

(5-CVL) The notice shall specify a time and date, not more than 4 days before that fixed for the meeting, by which, and the place at which, creditors (if not individuals attending in person) must lodge proxies, in order to be entitled to vote at the meeting.

(6) Additional notice of the meeting may be given by public advertisement if the convener thinks fit, and shall be so given if the court orders.

The chairman at meetings

4.062

(NO CVL APPLICATION)

(1) This Rule applies both to a meeting of creditors and to a meeting of contributories.

(2) Where the convener of the meeting is the official receiver, he, or a person nominated by him, shall be chairman.

(3) A nomination under paragraph (2) shall be in writing, unless the nominee is another official receiver or a deputy official receiver.

(4) Where the convener is other than the official receiver, the chairman shall be he, or a person nominated in writing by him.

(5) A person nominated under paragraph (4) must be either—

(a) one who is qualified to act as an insolvency practitioner in relation to the company, or

(b) an employee of the liquidator or his firm who is experienced in insolvency matters.

The chairman at meetings

4.063-CVL

(1) This Rule applies both to a meeting of creditors (except a meeting under Article 81 or 84) and to a meeting of contributories.

(2) The liquidator, or a person nominated by him in writing to act, shall be chairman of the meeting.

(3) A person nominated under paragraph (2) must be either—

(a) one who is qualified to act as an insolvency practitioner in relation to the company, or

(b) an employee of the liquidator or his firm who is experienced in insolvency matters.

Requisitioned meetings

4.064

(1) Subject to paragraph (2), any request by creditors to the liquidator (whether or not the official receiver) for a meeting of creditors or contributories, or meetings of both, to be summoned shall be accompanied by—

(a) a list of the creditors concurring with the request and the amount of their respective claims in the winding up;

(b) from each creditor concurring, written confirmation of his concurrence; and

(2) Paragraph (1)(a) and (b) does not apply if the requisitioning creditor's debt is alone sufficient, without the concurrence of other creditors.

(3) The liquidator shall, if he considers the request to be properly made in accordance with the Order, fix a venue for the meeting, not more than 35 days from his receipt of the request.

(4) The liquidator shall give 21 days' notice of the meeting, and the venue for it, to creditors.

(5) Paragraphs (1) to (4) apply to the requisitioning by contributories of contributories' meetings, with the following modifications—

(a) for the reference in paragraph (1)(a) to the creditors' respective claims substitute the contributories' respective values (being the amounts for which they may vote at any meeting); and

(b) the persons to be given notice under paragraph (4) are those appearing (by the company's books or otherwise) to be contributories of the company.

Attendance at meetings of company's personnel

4.065

(1) This Rule applies to meetings of creditors and to meetings of contributories.

(2) Whenever a meeting is summoned, the convener shall give at least 21 days' notice to such of the company's personnel as he thinks should be told of, or be present at, the meeting.

(3) In paragraph (2), "the company's personnel" means the persons referred to in sub-paragraphs (a) to (d) of Article 199(3) (present and past officers, employees, etc.).

(4) If the meeting is adjourned, the chairman of the meeting shall, unless for any reason he thinks it unnecessary or impracticable, give notice of the adjournment to such (if any) of the company's personnel as he considers appropriate, being persons who were not themselves present at the meeting.

(5) The convener may, if he thinks fit, give notice to any one or more of the company's personnel that he is, or they are, required to be present at the meeting, or to be in attendance.

(6) In the case of any meeting, any one or more of the company's personnel, and any other persons, may be admitted, but—

(a) they must have given reasonable notice of their wish to be present, and

(b) it is a matter for the chairman's discretion whether they are to be admitted or not, and his decision is final as to what (if any) intervention may be made by any of them.

(7) If it is desired to put questions to any one of the company's personnel who is not present, the chairman may adjourn the meeting with a view to obtaining his attendance.

(8) Where one of the company's personnel is present at a meeting, only such questions may be put to him as the chairman may in his discretion allow.

Notice of meetings by advertisement only

4.066

(1) In the case of any meeting of creditors or contributories to be held under the Order or the Rules, the court may order that notice of the meeting be given by public advertisement, and not by individual notice to the persons concerned.

(2) In considering whether to act under this Rule, the court shall have regard to the cost of public advertisement, to the amount of the assets available, and to the extent of the interest of creditors or of contributories, or any particular class of either of them.

Venue

4.067

(1) In fixing the venue for a meeting of creditors or contributories, the convener shall have regard to the convenience of the persons (other than whoever is to be chairman) who are invited to attend.

(2) Meetings shall in all cases be summoned for commencement between 10.00 and 16.00 hours on a business day, unless the court otherwise directs.

(3) With every notice summoning a meeting of creditors or contributories there shall be sent out forms of proxy.

Expenses of summoning meetings

4.068

(1) Subject to paragraphs (3) and (4), the expenses of summoning and holding a meeting of creditors or contributories at the instance of any person other than the official receiver or the liquidator shall be paid by that person, who shall deposit with the liquidator security for their payment.

(2) The sum to be deposited shall be such as the official receiver or liquidator (as the case may be) determines to be appropriate; and neither shall act without the deposit having been made.

(3) Where a meeting of creditors is so summoned, it may vote that the expenses of summoning and holding it, and of summoning and holding any meeting of contributories requisitioned at the same time, shall be payable out of the assets, as an expense of the liquidation.

(4) Where a meeting of contributories is summoned on the requisition of contributories, it may vote that the expenses of summoning and holding it shall be payable out of the assets, but subject to the right of creditors to be paid in full, with interest.

(5) To the extent that any deposit made under this Rule is not required for the payment of expenses of summoning and holding a meeting, it shall be repaid to the person who made it.

Expenses of meeting under Article 84

4.069-CVL

(1) Payment may be made out of the company's assets, either before or after the commencement of the winding up, of any reasonable and necessary expenses incurred in connection with the summoning, advertisement and holding of a creditors' meeting under Article 84.

(2) Any payment under paragraph (1) is an expense of the liquidation.

(3) Where payments under paragraph (1) are made before the commencement of the winding up, the director presiding at the creditors' meeting shall inform the meeting of their amount and the identity of the persons to whom they were made.

(4) The liquidator appointed under Article 86 may make a payment under paragraph (1) (subject to paragraph (5)); but if there is a liquidation committee, he must give the committee at least 7 days' notice of his intention to make the payment.

(5) A payment under paragraph (1) shall not be made by the liquidator to himself, or to any associate of his, otherwise than with the approval of the liquidation committee, the creditors, or the court.

(6) This Rule is without prejudice to the powers of the court under Rule 4.229 (voluntary winding up superseded by winding up by the court).

Resolutions

4.070

(1) Subject to paragraphs (2), (3), (4), (6) and (7), at a meeting of creditors or contributories, a resolution is passed when a majority (in value) of those present and voting, in person or by proxy, have voted in favour of the resolution.

(2) The value of contributories is determined by reference to the number of votes conferred on each contributory by the company's articles.

(3) In the case of a resolution for the appointment of a liquidator—

(a) subject to paragraph (4), if on any vote there are two nominees for appointment, the person who obtains the more support is appointed;

(b) if there are three or more nominees, and one of them has a clear majority over both or all the others together, that one is appointed; and

(c) in any other case, the chairman of the meeting shall continue to take votes (disregarding at each vote any nominee who has withdrawn and, if no nominee has withdrawn, the nominee who obtained the least support last time), until a clear majority is obtained for any one nominee.

(4) In a winding up by the court the support referred to in paragraph (3)(a) must represent a majority in value of all those present (in person or by proxy) at the meeting and entitled to vote. (NO CVL APPLICATION)

(5) The chairman may at any time put to the meeting a resolution for the joint appointment of any two or more nominees.

(6) Where a resolution is proposed which affects a person in respect of his remuneration or conduct as liquidator, or as proposed or former liquidator, the vote of that person, and of any partner or employee of his, shall not be reckoned in the majority required for passing the resolution.

(7) Paragraph (6) applies with respect to a vote given by a person (whether personally or on his behalf by a proxy-holder) either as creditor or contributory or as proxy-holder for a creditor or a contributory (but subject to Rule 8.6).

Chairman of meeting as proxy-holder

4.071

Where the chairman at a meeting of creditors or contributories holds a proxy which requires him to vote for a particular resolution, and no other person proposes that resolution—

(a) he shall himself propose it, unless he considers that there is good reason for not doing so, and

(b) if he does not propose it, he shall forthwith after the meeting notify his principal of the reason why not.

Suspension and adjournment

4.072

(1) This Rule applies to meetings of creditors and to meetings of contributories.

(2) Once only in the course of any meeting, the chairman may, in his discretion and without an adjournment, declare the meeting suspended for any period up to one hour.

(3) The chairman at any meeting may in his discretion, and shall if the meeting so resolves, adjourn it to such time and place as seems to him to be appropriate in the circumstances.

(4) An adjournment under paragraph (3) is subject to Rule 4.120(3) or, as the case may be, 4.121-CVL(3), in a case where the liquidator or his nominee is chairman, and a resolution has been proposed for the liquidator's removal.

(5) If within a period of 30 minutes from the time appointed for the commencement of a meeting a quorum is not present, then the chairman may, at his discretion, adjourn the meeting to such time and place as he may appoint.

(6) An adjournment under this Rule shall not be for a period of more than 21 days; and Rule 4.067(1) and (2) applies.

(7) If there is no person present to act as chairman, some other person present (being entitled to vote) may make the appointment under paragraph (4), with the agreement of others present (being persons so entitled).

(8) Failing an agreement under paragraph (7), the adjournment shall be to the same time and place in the next following week or, if that is not a business day, to the business day immediately following.

(9) Where a meeting is adjourned under this Rule, proofs and proxies may be used if lodged at any time up to midday on the business day immediately before the adjourned meeting.

Entitlement to vote (creditors)

4.073

(1) Subject to paragraphs (2) to (5) and Rule 4.074-CVL, at a meeting of creditors a person is entitled to vote as a creditor only if—

(a) there has been duly lodged (in a winding up by the court by the time and date stated in the notice of the meeting) a proof of the debt claimed to be due to him from the company, and the claim has been admitted under Rule 4.076 for the purpose of entitlement to vote, and

(b) there has been lodged, by the time and date stated in the notice of the meeting, any proxy requisite for that entitlement.

(2) The court may, in exceptional circumstances, by order declare the creditors, or any class of them, entitled to vote at creditors' meetings, without being required to prove their debts.

(3) Where a creditor is entitled to vote under paragraph (2), the court may, on the application of the liquidator, make such consequential orders as it thinks fit (as for example an order treating a creditor as having proved his debt for the purpose of permitting payment of dividend).

(4) A creditor shall not vote in respect of a debt for an unliquidated amount, or any debt whose value is not ascertained, except where the chairman agrees to put upon the debt an estimated minimum value for the purpose of entitlement to vote and admits his proof for that purpose.

(5) A secured creditor is entitled to vote only in respect of the balance (if any) of his debt after deducting the value of his security as estimated by him.

(6) A creditor shall not vote in respect of a debt on, or secured by, a current bill of exchange or promissory note, unless he is willing—

(a) to treat the liability to him on the bill or note of every person who is liable on it antecedently to the company, and against whom a bankruptcy order has not been made (or, in the case of a company, which has not gone into liquidation), as a security in his hands, and

(b) to estimate the value of the security and (for the purpose of entitlement to vote, but not for dividend) to deduct it from his proof.

Chairman's discretion to allow vote

4.074-CVL

At a creditors' meeting, the chairman may allow a creditor to vote, notwithstanding that he has failed to comply with Rule 4.073(1)(a), if satisfied that the failure was due to circumstances beyond the creditor's control.

Entitlement to vote (contributories)

4.075

At a meeting of contributories, voting rights are as at a general meeting of the company, subject to any provision in the articles affecting entitlement to vote, either generally or at a time when the company is in liquidation.

Admission and rejection of proof (creditors' meeting)

4.076

(1) At any creditors' meeting the chairman has power to admit or reject a creditor's proof for the purpose of his entitlement to vote; and the power is exercisable with respect to the whole or any part of the proof.

(2) The chairman's decision under this Rule, or in respect of any matter arising under Rule 4.073, is subject to appeal to the court by any creditor or contributory.

(3) If the chairman is in doubt whether a proof should be admitted or rejected, he shall mark it as objected to and allow the creditor to vote, subject to his vote being subsequently declared invalid if the objection to the proof is sustained.

(4) If on an appeal the chairman's decision is reversed or varied, or a creditor's vote is declared invalid, the court may order that another meeting be summoned, or make such other order as it thinks just.

(5) Neither the official receiver, nor any person nominated by him to be chairman, is personally liable for costs incurred by any person in respect of an application under this Rule; and the chairman (if other than the official receiver or a person so nominated) is not so liable unless the court makes an order to that effect. (NO CVL APPLICATION)

(6-CVL) The liquidator or his nominee as chairman is not personally liable for costs incurred by any person in respect of an application under this Rule, unless the court makes an order to that effect.

Record of proceedings

4.077

(1) At any meeting, the chairman shall cause minutes of the proceedings to be kept. The minutes shall be signed by him, and retained as part of the records of the liquidation.

(2) The chairman shall also cause to be made up and kept a list of all the creditors or, as the case may be, contributories who attended the meeting.

(3) The minutes of the meeting shall include a record of every resolution passed.

(4) It is the chairman's duty to see to it that particulars of all such resolutions, certified by him, are filed in court not more than 21 days after the date of the meeting. (NO CVL APPLICATION)

SECTION B: WINDING UP OF RECOGNISED BANKS, ETC.

Additional provisions as regards certain meetings

4.078

(1) This Rule applies where a company goes, or proposes to go, into liquidation and it is an authorised institution or former authorised institution within the meaning of the Banking Act 1987[^f00011].

(2) Notice of any meeting of the company at which it is intended to propose a resolution for its winding up shall be given by the directors to the Bank of England and to the Deposit Protection Board.

(3) Notice to the Bank and the Board shall be the same as given to members of the company.

(4) Where a creditors' meeting is summoned by the liquidator under Article 81 or, in a creditors' voluntary winding up, is summoned under Article 84, the same notice of the meeting must be given to the Bank and the Board as is given to creditors under Rule 4.056-CVL.

(5) Where the company is being wound up by the court, notice of the first meetings of creditors and contributories shall be given to the Bank and the Board by the official receiver.

(6) Where in the winding up (whether voluntary or by the court) a meeting of creditors or contributories or of the company is summoned for the purpose of—

(a) receiving the liquidator's resignation, or

(b) removing the liquidator, or

the person summoning the meeting and giving notice of it shall also give notice to the Bank and the Board.

(7) The Board is entitled to be represented at any meeting of which it is required by this Rule to be given notice; and Schedule 1 has effect with respect to the voting rights of the Board at such a meeting.

CHAPTER 9 — PROOF OF DEBTS IN A LIQUIDATION

SECTION A: PROCEDURE FOR PROVING

Meaning of “prove”

4.079

(1) Where a company is being wound up by the court, a person claiming to be a creditor of the company and wishing to recover his debt in whole or in part must (subject to any order of the court under Rule 4.073(2)) submit his claim in writing to the liquidator. (NO CVL APPLICATION)

(2-CVL) In a voluntary winding up (whether members' or creditors') the liquidator may require a person claiming to be a creditor of the company and wishing to recover his debt in whole or in part, to submit the claim in writing to him.

(3) A creditor who claims (whether or not in writing) is referred to as “proving” for his debt; and a document by which he seeks to establish his claim is his “proof”.

(4) Subject to paragraph (5), a proof must be in the form known as “proof of debt” (whether the form prescribed by the Rules, or a substantially similar form), which shall be made out by or under the directions of the creditor, and signed by him or a person authorised in that behalf. (NO CVL APPLICATION)

(5) Where a debt is due to a Minister of the Crown or a Government Department, the proof need not be in that form, but it must show all such particulars of the debt as are required in the form used by other creditors and as are relevant in the circumstances. (NO CVL APPLICATION)

(6-CVL) The creditor's proof may be in any form.

(7) In certain circumstances, specified in Rule 4.083, the proof must be in the form of an affidavit.

Supply of forms

4.080

(NO CVL APPLICATION)

(1) Forms of proof shall be sent out by the liquidator to every creditor of the company who is known to him, or is identified in the company's statement of affairs.

(2) The forms shall accompany (whichever is first)—

(a) the notice to creditors under Article 116(5)(b) (official receiver's decision not to call meetings of creditors and contributories), or

(b) the first notice calling a meeting of creditors, or

(3) Where, with the leave of the court under Rule 4.109(5), the liquidator advertises his appointment, he shall send proofs to the creditors within 4 months after the date of the winding-up order.

(4) Paragraphs (1) to (3) are subject to any order of the court dispensing with the requirement to send out forms of proof, or altering the time at which the forms are to be sent.

Contents of proof

4.081

(NO CVL APPLICATION)

(1) Subject to Rule 4.079(5), the following matters shall be stated in a creditor's proof of debt—

(a) the creditor's name and address;

(b) the total amount of his claim as at the date on which the company went into liquidation;

(d) whether or not the claim includes value added tax;

(e) whether the whole or any part of the debt falls within any (and if so which) of the categories of preferential debts under Article 346 of, and Schedule 4 to, the Order (as read with Schedule 4 to the Social Security Pensions (Northern Ireland) Order 1975[^f00012]);

(f) particulars of how and when the debt was incurred by the company;

(g) particulars of any security held, the date when it was given and the value which the creditor puts upon it; and

(h) the name, address and authority of the person signing the proof (if other than the creditor himself).

(2) There shall be specified in the proof any documents by reference to which the debt can be substantiated; but (subject to paragraph (3)) it is not essential that such documents be attached to the proof or submitted with it.

(3) The liquidator, or the chairman or convener of any meeting, may call for any document or other evidence to be produced to him, where he thinks it necessary for the purpose of substantiating the whole or any part of the claim made in the proof.

Particulars of creditor's claim

4.082-CVL

The liquidator, or the convener or chairman of any meeting, may, if he thinks it necessary for the purpose of clarifying or substantiating the whole or any part of a creditor's claim made in his proof, call for details of any matter specified in sub-paragraphs (a) to (h) of Rule 4.081(1), or for the production to him of such documentary or other evidence as he may require.

Claim established by affidavit

4.083

(1) The liquidator may, if he thinks it necessary, require a claim of debt to be verified by means of an affidavit, for which purpose there shall be used the form known as “affidavit of debt”, or a substantially similar form.

(2) An affidavit may be required notwithstanding that a proof of debt has already been lodged.

(3) The affidavit may be sworn before an official receiver or before an officer of the Department or of the court duly authorised in that behalf. (NO CVL APPLICATION)

Cost of proving

4.084

(1) Subject to paragraph (3), every creditor bears the cost of proving his own debt, including such as may be incurred in providing documents or evidence under Rule 4.081 (3) or 4.082-CVL.

(2) Subject to paragraph (3), costs incurred by the liquidator in estimating the quantum of a debt under Rule 4.092 (debts not bearing a certain value) are payable out of the assets, as an expense of the liquidation.

(3) Paragraphs (1) and (2) apply unless the court otherwise orders.

Liquidator to allow inspection of proofs

4.085

The liquidator shall, so long as proofs lodged with him are in his hands, allow them to be inspected, at all reasonable times on any business day, by any of the following persons—

(a) any creditor who has submitted his proof of debt (unless his proof has been wholly rejected for purposes of dividend or otherwise);

(b) any contributory of the company;

Transmission of proofs to liquidator

4.086

(NO CVL APPLICATION)

(1) Where a liquidator is appointed, the official receiver shall forthwith transmit to him all the proofs which he has so far received, together with an itemised list of them.

(2) The liquidator shall sign the list by way of receipt for the proofs, and return it to the official receiver.

(3) From then on, all proofs of debt shall be sent to the liquidator, and retained by him.

New liquidator appointed

4.087

(1) If a new liquidator is appointed in place of another, the former liquidator shall transmit to him all proofs which he has received, together with an itemised list of them.

(2) The new liquidator shall sign the list by way of receipt for the proofs, and return it to his predecessor.

Admission and rejection of proofs for dividend

4.088

(1) A proof may be admitted for dividend either for the whole amount claimed by the creditor, or for part of that amount.

(2) If the liquidator rejects a proof in whole or in part, he shall prepare a written statement of his reasons for doing so, and send it forthwith to the creditor.

Appeal against decision on proof

4.089

(1) If a creditor is dissatisfied with the liquidator's decision with respect to his proof (including any decision on the question of preference), he may apply to the court for the decision to be reversed or varied.

(2) The application under paragraph (1) must be made within 21 days of his receiving the statement sent under Rule 4.088(2).

(3) A contributory or any other creditor may, if dissatisfied with the liquidator's decision admitting or rejecting the whole or any part of a proof, make such an application within 21 days of becoming aware of the liquidator's decision.

(4) Where application is made to the court under this Rule, the court shall fix a venue for the application to be heard, notice of which shall be sent by the applicant to the creditor who lodged the proof in question (if it is not himself) and to the liquidator.

(5) The liquidator shall, on receipt of the notice, file in court the relevant proof, together (if appropriate) with a copy of the statement sent under Rule 4.088(2).

(6) After the application has been heard and determined, the proof shall, unless it has been wholly disallowed, be returned by the court to the liquidator.

(7) The official receiver is not personally liable for costs incurred by any person in respect of an application under this Rule; and the liquidator (if other than the official receiver) is not so liable unless the court makes an order to that effect.

Withdrawal or variation of proof

4.090

A creditor's proof may at any time, by agreement between himself and the liquidator, be withdrawn or varied as to the amount claimed.

Expunging of proof by the court

4.091

(1) The court may expunge a proof or reduce the amount claimed—

(a) on the liquidator's application, where he thinks that the proof has been improperly admitted, or ought to be reduced; or

(b) on the application of a creditor, if the liquidator declines to interfere in the matter.

(2) Where application is made to the court under this Rule, the court shall fix a venue for the application to be heard, notice of which shall be sent by the applicant—

(a) in the case of an application by the liquidator, to the creditor who made the proof, and

(b) in the case of an application by a creditor, to the liquidator and to the creditor who made the proof (if not himself).

SECTION B: QUANTIFICATION OF CLAIM

Estimate of quantum

4.092

(1) The liquidator shall estimate the value of any debt which, by reason of its being subject to any contingency or for any other reason, does not bear a certain value; and he may revise any estimate previously made, if he thinks fit, by reference to any change of circumstances or to information becoming available to him.

(2) The liquidator shall inform the creditor as to his estimate under paragraph (1) and any revision of it.

(3) Where the value of a debt is estimated under this Rule, or by the court under Article 143(3) or (5), the amount provable in the winding up in the case of that debt is that of the estimate for the time being.

Negotiable instruments, etc.

4.093

Unless the liquidator allows, a proof in respect of money owed on a bill of exchange, promissory note, cheque or other negotiable instrument or security cannot be admitted unless there is produced the instrument or security itself or a copy of it, certified by the creditor or his authorised representative to be a true copy.

Secured creditors

4.094

(1) If a secured creditor realises his security, he may prove for the balance of his debt, after deducting the amount realised.

(2) If a secured creditor voluntarily surrenders his security for the general benefit of creditors, he may prove for his whole debt, as if it were unsecured.

Discounts

4.095

There shall in every case be deducted from the claim all trade and other discounts which would have been available to the company but for its liquidation, except any discount for immediate, early or cash settlement.

Mutual credit and set-off

4.096

(1) This Rule applies where, before the company goes into liquidation there have been mutual credits, mutual debts or other mutual dealings between the company and any creditor of the company proving or claiming to prove for a debt in the liquidation.

(2) 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.

(3) Sums due from the company to another party shall not be included in the account taken under paragraph (2) if that other party had notice at the time they became due that a meeting of creditors had been summoned under Article 84 or (as the case may be) a petition for the winding up of the company was pending.

(4) Only the balance (if any) of the account is provable in the liquidation. Alternatively (as the case may be) the amount shall be paid to the liquidator as part of the assets.

Debt in foreign currency

4.097

(1) For the purpose of proving a debt incurred or payable in a currency other than sterling, the amount of the debt shall be converted into sterling at the official exchange rate prevailing on the date when the company went into liquidation.

(2) “The official exchange rate” is the middle market rate at the Bank of England, as published for the date in question. In the absence of any such published rate, it is such rate as the court determines.

Payments of a periodical nature

4.098

(1) In the case of rent and other payments of a periodical nature, the creditor may prove for any amounts due and unpaid up to the date when the company went into liquidation.

(2) Where at that date any payment was accruing due, the creditor may prove for so much as would have fallen due at that date, if accruing from day to day.

Interest

4.099

(1) In the circumstances described in paragraphs (2) and (3), and subject to paragraph (4), the creditor's claim may include interest on the debt for periods before the company went into liquidation, although not previously reserved or agreed.

(2) If the debt is due by virtue of a written instrument, and payable at a certain time, interest may be claimed for the period from that time to the date when the company went into liquidation.

(3) If the debt is due otherwise, interest may only be claimed if, before that date, a demand for payment of the debt was made in writing by or on behalf of the creditor, and notice given that interest would be payable from the date of the demand to the date of payment.

(4) Interest under paragraph (3) may only be claimed for the period from the date of the demand to that of the company's going into liquidation and for all the purposes of the Order and the Rules shall be chargeable at a rate not exceeding that mentioned in paragraph (5).

(5) The rate of interest to be claimed under paragraphs (2) and (3) is the rate applicable to a money judgment of the High Court on the date when the company went into liquidation.

Debt payable at future time

4.100

A creditor may prove for a debt of which payment was not yet due on the date when the company went into liquidation, but subject to Rule 11.13 (adjustment of dividend where payment made before time).

CHAPTER 10 — SECURED CREDITORS

Value of security

4.101

(1) A secured creditor may, with the agreement of the liquidator or the leave of the court, at any time alter the value which he has, in his proof of debt, put upon his security.

(2) However, if a secured creditor—

(a) being the petitioner, has in the petition put a value on his security, or

(b) has voted in respect of the unsecured balance of his debt,

he may re-value his security only with leave of the court. (NO CVL APPLICATION)

Surrender for non-disclosure

4.102

(1) If a secured creditor omits to disclose his security in his proof of debt, he shall surrender his security for the general benefit of creditors, unless the court, on application by him, relieves him from the effect of this Rule on the ground that the omission was inadvertent or the result of honest mistake.

(2) If the court grants that relief, it may require or allow the creditor's proof of debt to be amended, on such terms as may be just.

Redemption by liquidator

4.103

(1) The liquidator may at any time give notice to a creditor whose debt is secured that he proposes, at the expiration of 28 days from the date of the notice, to redeem the security at the value put upon it in the creditor's proof.

(2) The creditor then has 21 days (or such longer period as the liquidator may allow) in which, if he so wishes, to exercise his right to re-value his security (with the leave of the court, where Rule 4.101 (2) applies).

(3) If the creditor re-values his security, the liquidator may only redeem at the new value.

(4) If the liquidator redeems the security, the cost of transferring it is payable out of the assets.

(5) A secured creditor may at any time, by a notice in writing, call on the liquidator to elect whether he will or will not exercise his power to redeem the security at the value then placed on it; and the liquidator then has 6 months in which to exercise the power or determine not to exercise it.

Test of security's value

4.104

(1) Subject to paragraph (2), the liquidator, if he is dissatisfied with the value which a secured creditor puts on his security (whether in his proof or by way of re-valuation under Rule 4.103), may require any property comprised in the security to be offered for sale.

(2) The terms of sale shall be such as may be agreed, or as the court may direct; and if the sale is by auction, the liquidator on behalf of the company, and the creditor on his own behalf, may appear and bid.

Realisation of security by creditor

4.105

If a creditor who has valued his security subsequently realises it (whether or not at the instance of the liquidator)—

(a) the net amount realised shall be substituted for the value previously put by the creditor on the security, and

(b) that amount shall be treated in all respects as an amended valuation made by him.

CHAPTER 11 — THE LIQUIDATOR

SECTION A: APPOINTMENT AND ASSOCIATED FORMALITIES

Appointment by creditors or contributories

4.106

(NO CVL APPLICATION)

(1) This Rule applies where a person is appointed as liquidator either by a meeting of creditors or by a meeting of contributories.

(2) The chairman of the meeting shall certify the appointment, but not unless and until the person appointed has provided him with a written statement to the effect that he is an insolvency practitioner, duly qualified under the Order to be the liquidator, and that he consents so to act.

(3) The liquidator's appointment is effective from the date on which the appointment is certified, that date to be endorsed on the certificate.

(4) The chairman of the meeting (if not himself the official receiver) shall send the certificate to the official receiver.

(5) The official receiver shall in any case send the certificate to the liquidator and file a copy of it in court.

Appointment by creditors or by the company

4.107-CVL

(1) This Rule applies where a person is appointed as liquidator either by a meeting of creditors or by a meeting of the company.

(2) Subject to paragraph (4), the chairman of the meeting shall certify the appointment, but not unless and until the person appointed has provided him with a written statement to the effect that he is an insolvency practitioner, duly qualified under the Order to be the liquidator, and that he consents so to act; the liquidator's appointment takes effect upon the passing of the resolution for that appointment.

(3) Subject to paragraph (4), the chairman shall send the certificate forthwith to the liquidator, who shall keep it as part of the records of the liquidation.

(4) Paragraphs (2) and (3) need not be complied with in the case of a liquidator appointed by a company meeting and replaced by another liquidator appointed on the same day by a creditors' meeting.

Power to fill vacancy in office of liquidator

4.108-CVL

Where a vacancy in the office of liquidator occurs in the manner mentioned in Article 90, a meeting of creditors to fill the vacancy may be convened by any creditor or, if there were more liquidators than one, by the continuing liquidators.

Appointment by the court

4.109

(NO CVL APPLICATION)

(1) This Rule applies where the liquidator is appointed by the court under Article 118(4) (different persons nominated by creditors and contributories) or Article 119 (liquidation following administration or voluntary arrangement).

(2) The court's order shall not issue unless and until the person appointed has filed in court a statement to the effect that he is an insolvency practitioner, duly qualified under the Order to be the liquidator, and that he consents so to act.

(3) Thereafter, the court shall send 2 copies of the order to the official receiver. One of the copies shall be sealed, and this shall be sent to the person appointed as liquidator.

(4) The liquidator's appointment takes effect from the date of the order.

(5) The liquidator shall, within 28 days of his appointment, give notice of it to all creditors and contributories of the company of whom he is aware in that period. Alternatively, if the court allows, he may advertise his appointment in accordance with the court's directions.

(6) In his notice or advertisement under this Rule the liquidator shall—

(a) state whether he proposes to summon meetings of creditors and contributories for the purpose of establishing a liquidation committee, or proposes to summon only a meeting of creditors for that purpose, and

(b) if he does not propose to summon any such meeting, set out the powers of the creditors under the Order to require him to summon one.

Appointment by the court

4.110-CVL

(1) This Rule applies where the liquidator is appointed by the court under Article 86(3) or 94.

(2) The court's order shall not issue unless and until the person appointed has filed in court a statement to the effect that he is an insolvency practitioner, duly qualified under the Order to be the liquidator, and that he consents so to act.

(3) Thereafter, the court shall send a sealed copy of the order to the liquidator, whose appointment takes effect from the date of the order.

(4) Not later than 28 days from his appointment, the liquidator shall give notice of it to all creditors of the company of whom he is aware in that period. Alternatively, if the court allows, he may advertise his appointment in accordance with the court's directions.

Appointment by Department

4.111

(NO CVL APPLICATION)

(1) This Rule applies where the official receiver applies to the Department to appoint a liquidator in place of himself, or refers to the Department the need for an appointment.

(2) If the Department makes an appointment, it shall send 2 copies of the certificate of appointment to the official receiver, who shall transmit one such copy to the person appointed, and file the other in court.

(3) The certificate shall specify the date from which the liquidator's appointment is to be effective.

Authentication of liquidator's appointment

4.112

A copy of the certificate of the liquidator's appointment or (as the case may be) a sealed copy of the court's order, may in any proceedings be adduced as proof that the person appointed is duly authorised to exercise the powers and perform the duties of liquidator in the company's winding up.

Appointment to be advertised and registered

4.113

(1) Subject to paragraph (2-CVL), where the liquidator is appointed by a creditors' or contributories' meeting, or by a meeting of the company, he shall, on receiving his certificate of appointment, give notice of his appointment in such newspaper as he thinks most appropriate for ensuring that it comes to the notice of the company's creditors and contributories.

(2-CVL) Paragraph (1) need not be complied with in the case of a liquidator appointed by a company meeting and replaced by another liquidator appointed on the same day by a creditors' meeting.

(3) The expense of giving notice under this Rule shall be borne in the first instance by the liquidator; but he is entitled to be reimbursed out of the assets, as an expense of the liquidation.

(4) Paragraph (3) applies also in the case of the notice or advertisement required where the appointment is made by the court or the Department.

(5) In the case of a winding up by the court, the liquidator, however he is appointed, shall also forthwith notify his appointment to the registrar. (NO CVL APPLICATION)

Hand-over of assets to liquidator

4.114

(NO CVL APPLICATION)

(1) This Rule applies only where the liquidator is appointed in succession to the official receiver acting as liquidator.

(2) When the liquidator's appointment takes effect, the official receiver shall forthwith do all that is required for putting him into possession of the assets.

(3) On taking possession of the assets, the liquidator shall discharge any balance due to the official receiver on account of—

(a) expenses properly incurred by him and payable under the Order or the Rules, and

(b) any advances made by him in respect of the assets, together with interest on such advances at the rate applicable to a money judgment of the High Court at the date of the winding-up order.

(4) Alternatively, the liquidator may (before taking office) give to the official receiver a written undertaking to discharge any such balance out of the first realisation of assets.

(5) The official receiver has a charge on the assets in respect of any sums due to him under paragraph (3). But, where the liquidator has realised assets with a view to making those payments, the official receiver's charge does not extend in respect of sums deductible by the liquidator from the proceeds of realisation, as being expenses properly incurred therein.

(6) The liquidator shall from time to time out of the realisation of assets discharge all guarantees properly given by the official receiver for the benefit of the estate, and shall pay all the official receiver's expenses.

(7) The official receiver shall give to the liquidator all such information relating to the affairs of the company and the course of the winding up as he (the official receiver) considers to be reasonably required for the effective discharge by the liquidator of his duties as such.

(8) The liquidator shall also be furnished with a copy of any report made by the official receiver under Chapter 7.

SECTION B: RESIGNATION AND REMOVAL; VACATION OF OFFICE

Creditors' meeting to receive liquidator's resignation

4.115

(1) Before resigning his office, the liquidator must call a meeting of creditors for the purpose of receiving his resignation. The notice summoning the meeting shall indicate that this is the purpose, or one of the purposes, of it, and shall draw the attention of creditors to Rule 4.128 or, as the case may be, Rule 4.129-CVL with respect to the liquidator's release.

(2) A copy of the notice shall at the same time also be sent to the official receiver. (NO CVL APPLICATION)

(3) The notice to creditors under paragraph (1) must be accompanied by an account of the liquidator's administration of the winding up including a summary of his receipts and payments.

(4) In the case of a winding up by the court, the account of the liquidator's administration of the winding up under paragraph (3) must also include a statement by him that he has reconciled his account with that which is held by the Department in respect of the winding up. (NO CVL APPLICATION)

(5) Subject to paragraph (6), the liquidator may only proceed under this Rule on grounds of ill health or because—

(a) he intends ceasing to be in practice as an insolvency practitioner, or

(b) there is some conflict of interest or change of personal circumstances which precludes or makes impracticable the further discharge by him of the duties of liquidator.

(6) Where two or more persons are acting as liquidator jointly, any one of them may proceed under this Rule (without prejudice to the continuation in office of the other or others) on the ground that, in his opinion and that of the other or others, it is no longer expedient that there should continue to be the present number of joint liquidators.

(7) If there is no quorum present at the meeting summoned to receive the liquidator's resignation, the meeting is deemed to have been held, a resolution is deemed to have been passed that the liquidator's resignation be accepted and the creditors are deemed not to have resolved against the liquidator having his release.

(8) Where paragraph (7) applies any reference in the Rules to a resolution that the liquidator's resignation be accepted is replaced by a reference to the making of a written statement, signed by the person who, had there been a quorum present, would have been chairman of the meeting, that no quorum was present and that the liquidator may resign.

Action following acceptance of resignation

4.116

(NO CVL APPLICATION)

(1) This Rule applies where a meeting is summoned to receive the liquidator's resignation.

(2) If the chairman of the meeting is other than the official receiver, and there is passed at the meeting any of the following resolutions—

(a) that the liquidator's resignation be accepted,

(b) that a new liquidator be appointed,

the chairman shall, within 3 days, send to the official receiver a copy of the resolution.

(3) If it has been resolved to accept the liquidator's resignation, the chairman shall send to the official receiver a certificate to that effect.

(4) If the creditors have resolved to appoint a new liquidator, the certificate of his appointment shall also be sent to the official receiver within that time; and Rule 4.106 shall be complied with in respect of it.

(5) If the liquidator's resignation is accepted, the notice of it required by Article 146(6) shall be given by him forthwith after the meeting; and he shall send a copy of the notice to the official receiver.

(6) The notice under Article 146(6) shall be accompanied by a copy of the account sent to creditors under Rule 4.115(3).

(7) The official receiver shall file a copy of the notice in court.

(8) The liquidator's resignation is effective as from the date on which the official receiver files the copy notice in court, that date to be endorsed on the copy notice.

Action following acceptance of resignation

4.117-CVL

(1) This Rule applies where a meeting is summoned to receive the liquidator's resignation.

(2) If his resignation is accepted, the notice of it required by Article 145(5) shall be given by him forthwith after the meeting.

(3) Where a new liquidator is appointed in place of the one who has resigned, the certificate of his appointment shall be delivered forthwith by the chairman of the meeting to the new liquidator.

Leave to resign granted by the court

4.118

(1) If at a creditors' meeting summoned to accept the liquidator's resignation it is resolved that it be not accepted, the court may, on the liquidator's application, make an order giving him leave to resign.

(2) The court's order may include such provision as it thinks fit with respect to matters arising in connection with the resignation, and shall determine the date from which the liquidator's release is effective.

(3) The court shall send 3 sealed copies of the order to the liquidator, who shall forthwith send one of the copies to the official receiver and one to the registrar. (NO CVL APPLICATION)

(4-CVL) The court shall send 2 sealed copies of the order to the liquidator, who shall forthwith send one of them to the registrar.

(5) On sending notice of his resignation to the court, the liquidator shall send a copy of it to the official receiver. (NO CVL APPLICATION)

Advertisement of resignation

4.119

Where a new liquidator is appointed in place of one who has resigned, the former shall, in giving notice of his appointment, state that his predecessor has resigned and (if it be the case) that he has been given his release.

Meeting of creditors to remove liquidator

4.120

(NO CVL APPLICATION)

(1) Where a meeting of creditors is summoned for the purpose of removing the liquidator, the notice summoning it shall indicate that this is the purpose, or one of the purposes, of the meeting; and the notice shall draw the attention of creditors to Article 148(4) with respect to the liquidator's release.

(2) A copy of the notice shall at the same time also be sent to the official receiver.

(3) At the meeting, a person other than the liquidator or his nominee may be elected to act as chairman; but if the liquidator or his nominee is chairman and a resolution has been proposed for the liquidator's removal, the chairman shall not adjourn the meeting without the consent of at least one-half (in value) of the creditors present (in person or by proxy) and entitled to vote.

(4) Where the chairman of the meeting is other than the official receiver, and there is passed at the meeting any of the following resolutions—

(a) that the liquidator be removed,

(b) that a new liquidator be appointed,

the chairman shall, within 3 days, send to the official receiver a copy of the resolution.

(5) If it has been resolved to remove the liquidator under paragraph 4(a), the chairman shall send to the official receiver a certificate to that effect.

(6) If the creditors have resolved to appoint a new liquidator, the certificate of his appointment shall also be sent to the official receiver within that time; and Rule 4.106 shall be complied with in respect of it.

Meeting of creditors to remove liquidator

4.121-CVL

(1) A meeting held under Article 145(2)(b) for the removal of the liquidator shall be summoned by him if requested by 25 per cent. in value of the company's creditors, excluding those who are connected with it.

(2) The notice summoning the meeting shall indicate that the removal of the liquidator is the purpose, or one of the purposes, of the meeting; and the notice shall draw the attention of creditors to Article 147(2) with respect to the liquidator's release.

(3) At the meeting, a person other than the liquidator or his nominee may be elected to act as chairman; but if the liquidator or his nominee is chairman and a resolution has been proposed for the liquidator's removal, the chairman shall not adjourn the meeting without the consent of at least one-half (in value) of the creditors present (in person or by proxy) and entitled to vote.

Court's power to regulate meetings under Rules 4.120, 4.121-CVL

4.122

Where a meeting under Rule 4.120 or 4.121-CVL is to be held, or is proposed to be summoned, the court may, on the application of any creditor, give directions as to the mode of summoning it, the sending out and return of forms of proxy, the conduct of the meeting, and any other matter which appears to the court to require regulation or control under this Rule.

Procedure on removal

4.123

(NO CVL APPLICATION)

(1) Where the creditors have resolved that the liquidator be removed, the official receiver shall file in court the certificate of removal.

(2) The resolution is effective as from the date on which the official receiver files the certificate of removal in court, and that date shall be endorsed on the certificate.

(3) A copy of the certificate, so endorsed, shall be sent by the official receiver to the liquidator who has been removed, to the registrar and, if a new liquidator has been appointed, to him.

(4) The official receiver shall not file the certificate in court unless and until the Department has certified to him that the removed liquidator has reconciled his account with that held by the Department in respect of the winding up.

Procedure on removal

4.124-CVL

Where the creditors have resolved that the liquidator be removed, the chairman of the creditors' meeting shall forthwith—

(a) if at the meeting another liquidator was not appointed, send the certificate of the liquidator's removal to the registrar, and

(b) otherwise, deliver the certificate to the new liquidator, who shall send it to the registrar.

Advertisement of removal

4.125

Where a new liquidator is appointed in place of one removed, the former shall, in giving notice of his appointment, state that his predecessor has been removed and (if it be the case) that he has been given his release.

Removal of liquidator by the court

4.126

(NO CVL APPLICATION)

(1) This Rule applies where application is made to the court for the removal of the liquidator, or for an order directing the liquidator to summon a meeting of creditors for the purpose of removing him.

(2) The court may, if it thinks that no sufficient cause is shown for the application, dismiss it; but it shall not do so unless the applicant has had an opportunity to attend the court for an ex parte hearing, of which he has been given at least 7 days' notice.

(3) If the application is not dismissed under paragraph (2), the court shall fix a venue for it to be heard.

(4) The court may require the applicant to make a deposit or give security for the costs to be incurred by the liquidator on the application.

(5) The applicant shall, at least 14 days before the hearing date, send to the liquidator and the official receiver a notice stating the venue and accompanied by a copy of the application, and of any evidence which he intends to adduce in support of it.

(6) Subject to any contrary order of the court, the costs of the application are not payable out of the assets.

(7) Where the court removes the liquidator—

(a) it shall send 2 copies of the order of removal to him, one to be sent by him forthwith to the registrar with notice of his ceasing to act and one to be sent to the official receiver;

(b) the order may include such provision as the court thinks fit with respect to matters arising in connection with the removal; and

Removal of liquidator by the court

4.127-CVL

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