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The Insolvency (Scotland) (Receivership and Winding up) Rules 2018

Type Scottish-Statutory-Instrument

Publication 2018-11-13

Last updated 2021-10-01

State In force

Jurisdiction Scotland

Department King's Printer for Scotland

Source legislation.gov.uk

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7.11

(1) The liquidator’s claims for the outlays reasonably incurred and for the liquidator’s remuneration must be made in accordance with this rule (and subject to rules 7.12 to 7.15).

(2) The liquidator may within 14 days after the end of an accounting period submit to the liquidation committee or, if there is no liquidation committee, to the court in respect of that period and any other previous accounting period in which no submission has been made under this paragraph—

(a) the liquidator’s accounts of the liquidator’s intromissions with the company’s assets for audit;

(b) a claim for the outlays reasonably incurred by the liquidator and for the liquidator’s remuneration (where the liquidator intends to submit such a claim in respect of that accounting period); and

(c) where funds are available after making allowance for contingencies, a scheme of division of the divisible funds (unless rule 7.31(8) applies).

(3) The liquidator may, at any time before the end of an accounting period submit to the liquidation committee (or if there is no liquidation committee, to the court) an interim claim in respect of that period or any other previous accounting period in which no submission has been made under paragraph (2) for:—

(a) the outlays reasonably incurred by the liquidator; and

(b) the liquidator’s remuneration.

(4) If the liquidator submits an interim claim under paragraph (3), the liquidation committee or the court may make an interim determination in relation to the amount of the outlays and remuneration.

(5) If the liquidation committee or the court makes such an interim determination, it must take into account such an interim determination when making a determination under paragraph (7)(a)(ii).

(6) Accounts in respect of legal services incurred by the liquidator must, before payment, be submitted for taxation to the auditor of the court before which the liquidation is pending, unless—

(a) the account has been agreed between the liquidator and the person entitled to payment in respect of that account; and

(b) the liquidator is not an associate of that person.

(7) If the liquidator makes a submission under paragraph (2) to the liquidation committee or, if there is no liquidation committee the court, within 6 weeks after the end of an accounting period—

(a) the liquidation committee or, as the case may be, the court—

(i) may audit the accounts; and

(ii) must issue a determination fixing the amount of the outlays and remuneration payable to the liquidator; and

(b) the liquidator must make the audited accounts, scheme of division and the determination available for inspection by the creditors and contributories.

(8) Subject to paragraph (9), the basis of remuneration must be fixed—

(a) as a percentage of the value of the company’s assets which are realised by the liquidator;

(b) by reference to the work which was reasonably undertaken by the liquidator and the liquidator’s staff in attending to matters arising in the winding up;

(9) The basis of remuneration may be fixed as any one or more of the bases set out in paragraph (8)(a) to (c) and different bases may be fixed in respect of different things done by the liquidator.

(10) In fixing the amount of the liquidator’s remuneration and outlays in respect of any accounting period, the liquidation committee or, as the case may be, the court may take into account any adjustment which the liquidation committee or the court may wish to make in the amount of the remuneration and outlays fixed in respect of any earlier accounting period.

Appeal against fixing of outlays and remuneration: creditors' voluntary winding up and winding up by the court

7.12

(1) Within 14 days after issue of a determination under rule 7.11(4) or (7)(a)(ii), by a liquidation committee, the liquidator, any creditor or any contributory may appeal against that determination, to the court.

(2) An appeal may only be made against a determination issued under rule 7.11(4) or (7)(a)(ii) by a creditor or contributory if notice is delivered to the liquidator of intention to appeal.

Recourse of liquidator to decision of creditors: creditors' voluntary winding up and winding up by the court

7.13

If the liquidator’s outlays or remuneration has been fixed by the liquidation committee and the liquidator considers the amount to be insufficient, the liquidator may request that it be increased by the creditors by a decision procedure.

Recourse to the court: creditors' voluntary winding up and winding up by the court

7.14

(1) If the liquidator considers that the outlays or remuneration fixed by the liquidation committee, or by decision of the creditors, is insufficient, the liquidator may apply to the court for an order increasing the amount of the outlays or the amount or rate of remuneration.

(2) The liquidator must give at least 14 days’ notice of the liquidator’s application to the members of the liquidation committee and the committee may nominate one or more members to appear or be represented, and to be heard, on the application.

(3) If there is no liquidation committee, the liquidator’s notice of the liquidator’s application must be sent to such one or more of the company’s creditors as the court may direct, which creditors may nominate one or more of their number to appear or be represented.

(4) The court may, if it appears to be a proper case, order the expenses of the liquidator’s application, including the expenses of any member of the liquidation committee appearing or being represented on it, or any creditor so appearing or being represented, to be paid as an expense of the liquidation.

Creditors' claim that remuneration is excessive: creditors' voluntary winding up and winding up by the court

7.15

(1) If the liquidator’s outlays and remuneration have been fixed by the liquidation committee or by the creditors, any creditor or creditors of the company representing in value at least 25% of the creditors may apply to the court for an order that the liquidator’s outlays or remuneration be reduced, on the grounds that they are, in all the circumstances, excessive.

(2) If the court considers the application to be well-founded, it must make an order fixing the outlays or remuneration at a reduced amount or rate.

(3) Unless the court orders otherwise, the expenses of the application must be paid by the applicant, and are not payable as an expense of the liquidation.

CHAPTER 4 — Claims by creditors

[Note: a document required by the Act or these Rules must also contain the standard contents required as set out in Part 1.]

Submission of claims

7.16

(1) A creditor, in order to obtain an adjudication as to the creditor’s entitlement to a dividend (so far as funds are available) out of the assets of the company in respect of any accounting period, must submit the creditor’s claim to the liquidator not later than 8 weeks before the end of the accounting period.

(2) A creditor must submit a claim by producing to the liquidator—

(a) a statement of claim as described in paragraph (3); and

(b) documentary evidence of debt,

but the liquidator may dispense with the requirement in sub-paragraph (b) in respect of any debt or any class of debt.

(3) The statement of claim must—

(a) be made out by, or under the direction of, the creditor and dated and authenticated by the creditor or a person authorised on the creditor’s behalf;

(b) state the creditor’s name and address;

(d) state the name and address of any person authorised to act on behalf of the creditor;

(e) state the total amount claimed in respect of all debts (under deduction of the value of any security as estimated by the creditor unless the creditor is surrendering or undertaking to surrender the security);

(f) state whether or not the claim includes any outstanding uncapitalised interest at the date on which the company went into liquidation;

(g) contain particulars of how and when the debt was incurred by the company, and where relevant the date on which payment of the debt became due;

(h) contain particulars of any security[^f00080] held, the subjects covered, the date on which it was given and the value which the creditor puts on it;

(i) include details of any retention of title in relation to goods to which the debt relates;

(j) state the nature and amount of any preference under schedule 6 of the Act claimed in respect of the debt;

(k) in the case of a member State liquidator creditor, specify and give details of underlying claims in respect of which the creditor is claiming;

(l) include any details of any document by reference to which the debt can be substantiated; and

(m) state the name, postal address and authority of the person authenticating the statement of claim and documentary evidence of debt (if someone other than the creditor).

(4) A claim submitted by a creditor, which has been accepted in whole or in part by the liquidator for the purpose of drawing a dividend in respect of any accounting period, is to be deemed to have been resubmitted for the purpose of obtaining an adjudication as to the creditor’s entitlement to a dividend in respect of an accounting period or, as the case may be, any subsequent accounting period.

(5) A creditor who has submitted a claim may at any time submit a further claim specifying a different amount for the claim, provided that a secured creditor is not entitled to produce a further claim specifying a different value for the security at any time after the liquidator has required the creditor to discharge, or convey or assign, the security under rule 7.24.

False claims or evidence

7.17

If a creditor produces under rule 7.16 a statement of claim or documentary evidence of debt or other evidence which is false—

(a) the creditor is guilty of an offence unless the creditor shows that the creditor neither knew nor had reason to believe that the statement of claim or documentary evidence of debt or other evidence was false;

(b) the company is guilty of an offence if the company—

(i) knew or became aware that the statement of claim or documentary evidence of debt or other evidence was false; and

(ii) failed as soon as practicable after acquiring such knowledge to report it to the liquidator.

Evidence of claims

7.18

(1) The liquidator, for the purpose of being satisfied as to the validity or amount of a claim submitted by a creditor under rule 7.16, may require—

(a) the creditor to produce further evidence; or

(b) any other person who the liquidator believes can produce relevant evidence, to produce such evidence.

(2) If the creditor or other person refuses or delays to produce such evidence as required under paragraph (1), the liquidator may apply to the court for an order requiring the creditor or other person to attend for private examination before the court.

(3) On an application to it under paragraph (2) the court may make an order requiring the creditor or other person to attend for private examination before it on a date (being not earlier than 8 days nor later than 16 days after the date of the order) and at a time specified in the order.

(4) If a creditor or other person is for any good reason prevented from attending for examination, the court may grant a commission to take the examination (the commissioner being in this rule referred to as an “examining commissioner”).

(5) At any private examination under paragraph (3) or where the court grants a commission to take the examination under paragraph (4)—

(a) a solicitor or counsel may act on behalf of the liquidator; or

(b) the liquidator may appear on the liquidator’s own behalf.

(6) The examination, whether before the court or an examining commissioner, must be taken on oath.

(7) A person who fails without reasonable excuse to comply with an order made under paragraph (3) is guilty of an offence.

(8) References in this rule to a creditor in a case where the creditor is one of the following entities:—

(a) a trust;

(b) a partnership (including a dissolved partnership);

(d) a limited partnership (including a dissolved partnership) within the meaning of the Limited Partnerships Act 1907,

are to be construed, unless the context otherwise requires, as references to a person representing the entity.

Adjudication of claims

7.19

(1) Where funds are available for payment of a dividend out of the company’s assets in respect of an accounting period, the liquidator for the purpose of determining who is entitled to such a dividend must—

(a) not later than 4 weeks before the end of the period, accept or reject every claim submitted or deemed to have been re-submitted under rule 7.16; and

(b) at the same time make a decision on any matter requiring to be specified under paragraph (4)(a) or (b).

(2) On accepting or rejecting, under paragraph (1), every claim submitted or deemed to have been re-submitted, the liquidator must, as soon as reasonably practicable, send a list of every claim so accepted or rejected (including the amount of each claim and whether it has been accepted or rejected) to every creditor known to the liquidator.

(3) Where the liquidator rejects a claim, the liquidator must without delay notify the creditor giving reasons for the rejection.

(4) Where the liquidator accepts or rejects a claim, the liquidator must specify for that claim—

(a) the amount of the claim accepted;

(b) the category of debt, and the value of any security, as decided by the liquidator; and

(5) Any member of the company or any creditor may, if dissatisfied with the acceptance or rejection of any claim (or, in relation to such acceptance or rejection, with a decision in respect of any matter requiring to be specified under paragraph (4)(a) or (b)) appeal to the court not later than 14 days before the end of the accounting period.

(6) Any reference in this rule to the acceptance or rejection of a claim is to be construed as a reference to the acceptance or rejection of the claim in whole or in part.

Entitlement to draw a dividend

7.20

(1) A creditor who has had that creditor’s claim accepted in whole or in part by the liquidator under rule 7.19(1) or on appeal under rule 7.19(5) is entitled to payment out of the company’s assets of a dividend in respect of the accounting period for the purposes of which the claim is accepted.

(2) Such entitlement to payment arises only in so far as the company has funds available to make that payment, having regard to rule 7.27 (order of priority in distribution).

Liabilities and rights of co-obligants

7.21

(1) Where a creditor has an obligant bound to the creditor along with the company for the whole or part of the debt, the obligant is not freed or discharged from liability for the debt by reason of the dissolution of the company or the creditor’s voting or drawing a dividend or assenting to or not opposing—

(a) the dissolution of the company; or

(b) any composition with creditors.

(2) Paragraph (3) applies where—

(a) a creditor has had a claim accepted in whole or in part; and

(b) the obligant holds a security over any part of the company’s assets,

(3) The obligant must account to the liquidator so as to put the company’s assets in the same position as if the obligant had paid the debt to the creditor and thereafter had had the obligant’s claim accepted in whole or in part in the liquidation after deduction of the value of the security.

(4) The obligant may require and obtain at the obligant’s own expense from the creditor an assignation of the debt, on payment of the amount of the debt and on that being done may in respect of the debt submit a claim, and vote and draw a dividend, if otherwise legally entitled to do so.

(5) Paragraph (4) is without prejudice to any right, under any rule of law, of a co-obligant who has paid the debt.

(6) In this rule an “obligant” includes cautioner.

Amount which may be claimed generally

7.22

(1) Subject to the provisions of this rule and rules 7.23 and 7.24, the amount in respect of which a creditor is entitled to claim is the accumulated sum of principal and any interest which is due on the debt as at the date on which the company went into liquidation.

(2) If a debt does not depend on a contingency but would not be payable but for the liquidation until after the date on which the company went into liquidation, the amount of the claim is to be calculated as if the debt were payable on the date on which the company went into liquidation but subject to the deduction of interest at the rate specified in paragraph (4) from that date until the date for payment of the debt.

(3) In calculating the amount of a creditor’s claim, the creditor must deduct any discount (other than any discount for immediate or early settlement) which is allowable by contract or course of dealing between the creditor and the company or by the usage of trade.

(4) The rate of interest referred to in paragraph (2) is the official rate.

(5) Where the winding up was immediately preceded by an administration, the reference to the date on which the company went into liquidation in paragraph (1) and the second reference to that date in paragraph (2) are to be construed as references to the date the company entered administration.

Debts depending on contingency

7.23

(1) Subject to paragraph (2), the amount which a creditor is entitled to claim is not to include a debt in so far as its existence or amount depends on a contingency.

(2) On an application by the creditor—

(a) to the liquidator; or

(b) if there is no liquidator, to the court,

the liquidator or court must put a value on the debt in so far as it is contingent.

(3) Where under paragraph (2) a value is put on the debt—

(a) the amount in respect of which the creditor is then entitled to claim is to be that value but no more;

(b) where the contingent debt is an annuity, a cautioner may not then be sued for more than that value.

(4) Any interested person may appeal to the court against a valuation under paragraph (2) by the liquidator, and the court may affirm or vary that valuation.

Secured debts

7.24

(1) In calculating the amount of a secured creditor’s claim the secured creditor is to deduct the value of any security as estimated by the secured creditor.

(2) If the secured creditor surrenders, or undertakes in writing to surrender, a security for the benefit of the company’s assets, the secured creditor is not required to deduct the value of that security.

(3) The liquidator may, at any time after the expiry of 12 weeks from the date on which the company went into liquidation, require a secured creditor at the expense of the company’s assets to discharge the security or convey or assign it to the liquidator on payment to the creditor of the value specified by the creditor.

(4) Where under paragraph (3) the liquidator makes payment to the creditor the amount in respect of which the creditor is then entitled to claim is to be any balance of the creditor’s debt remaining after receipt of such payment.

(5) In calculating the amount of the claim of a creditor whose security has been realised the creditor must deduct the amount (less the expenses of realisation) which the creditor has received, or is entitled to receive, from the realisation.

Claims in foreign currency

7.25

(1) A creditor may state the amount of the creditor’s claim in a currency other than sterling where—

(a) the creditor’s claim is constituted by decree or other order made by a court ordering the company to pay to the creditor a sum expressed in a currency other than sterling; or

(b) where it is not so constituted, the creditor’s claim arises from a contract or bill of exchange in terms of which payment is, or may be required to be, made by the company to the creditor in a currency other than sterling.

(2) Where under paragraph (1) a claim is stated in a currency other than sterling the liquidator must convert it into sterling at a single rate for each currency determined by the liquidator by reference to the exchange rates prevailing in the London market at the close of business on the date on which the company went into liquidation.

CHAPTER 5 — Official rate of interest

Specified rate of interest

7.26

(1) This rule specifies the rate of interest for the purpose of section 189(4)(a) and (5) (rate of interest used in calculating the official rate of interest for the purposes of provisions of theAct).

(2) The rate specified is the rate of interest on a sheriff court decree or extract under section 9 of the Sheriff Courts (Scotland) Extracts Act 1892[^f00081] as it may be amended by section 4 of the Administration of Justice (Scotland) Act 1972[^f00082].

CHAPTER 6 — Distribution of company's assets by the liquidator

[Note: a document required by the Act or these Rules must also contain the standard contents required as set out in Part 1.]

Order of priority in distribution

7.27

(1) The funds of the company’s assets must be distributed by the liquidator to meet the following expenses and debts in the order in which they are mentioned—

(a) the expenses of the liquidation;

(b) any preferential debts within the meaning of section 386[^f00083] (excluding any interest which has been accrued thereon to the date on which the company went into liquidation);

(c) ordinary debts, that is to say a debt which is neither a secured debt nor a debt mentioned in any other sub-paragraph of this paragraph;

(d) interest at the official rate, between the date on which the company went into liquidation and the date of payment, on—

(i) the preferential debts; and

(ii) the ordinary debts; and

(e) any postponed debt.

(2) In paragraph (1)—

(a) “postponed debt” means—

(i) a creditor’s right to any alienation which has been reduced or restored to the company’s assets under section 242 or to the proceeds of sale of such an alienation;

(ii) a claim arising by virtue of section 382(1)(a) of the Financial Services and Markets Act 2000[^f00084] (restitution orders), unless it is also a claim arising by virtue of sub-paragraph (b) of that section (a person who has suffered loss etc.); or

(iii) a claim which by virtue of the Act or any other enactment is a claim the payment of which is to be postponed;

(b) in sub-paragraph (d), where the liquidation was immediately preceded by an administration, the reference to the date on which the company went into liquidation is to be construed as the date the company entered administration.

(3) The expenses of the liquidation mentioned in paragraph (1)(a) are payable in the order of priority mentioned in rule 7.28 (order of priority of expenses of liquidation).

(4) Subject to section 175—

(a) any debt falling within any of sub-paragraphs (b) to (e) of paragraph (1) is to have the same priority as any other debt falling within the same sub-paragraph; and

(b) where the funds of the company’s assets are inadequate to enable such debts to be paid in full, they are to abate in equal proportions.

(5) Any surplus remaining, after all the expenses and debts mentioned in paragraph (1) have been paid in full, must (unless the articles of the company provide otherwise) be distributed among the members according to their rights and interests in the company.

(6) Nothing in this rule affects—

(a) the right of a secured creditor which is preferable to the rights of the liquidator; or

(b) any preference of the holder of a lien over a title deed or other document which has been delivered to the liquidator in accordance with a requirement under rule 5.36(4).

Order of priority of expenses of liquidation

7.28

(1) All fees, costs, charges and other expenses incurred in the course of the liquidation are to be treated as expenses of the liquidation.

(2) The expenses associated with the prescribed part must be paid out of the prescribed part.

(3) The expenses of the liquidation are payable out of the assets of the company in the following order of priority—

(a) any outlays properly chargeable or incurred by the provisional liquidator or liquidator in carrying out the functions of the provisional liquidator or liquidator in the liquidation including any costs referred to in Article 30 and 59 of the EU Regulation, except those outlays specifically mentioned in the following sub-paragraphs;

(b) the cost, or proportionate cost, of any caution provided by a provisional liquidator, liquidator or special manager in accordance with the Act or these Rules;

(d) the expenses of the petitioner in the liquidation, and of any person appearing in the petition whose expenses are allowed by the court;

(e) the remuneration of the special manager (if any);

(f) any amount payable to a person employed or authorised, under Chapter 4 of Part 5, to assist in the preparation of a statement of affairs or of accounts;

(g) the remuneration or emoluments of any person who has been employed by the liquidator to perform any services for the company, as required or authorised by or under the Act or these Rules;

(h) the remuneration of the liquidator determined in accordance with rules 7.11 to 7.15;

(i) the amount of any corporation tax on chargeable gains accruing on the realisation of any asset of the company (without regard to whether the realisation is effected by the liquidator, a secured creditor or otherwise).

Winding up commencing as voluntary

7.29

In any winding up by the court which follows immediately on a voluntary winding up (whether members’ voluntary or creditors’ voluntary), such outlays and remuneration of the voluntary liquidator as the court may allow have the same priority as the outlays mentioned in rule 7.28(3)(a).

Saving for powers of the court (section 156)

7.30

(1) The priorities laid down by rules 7.27 and 7.28 are subject to the power of the court to make orders under section 156, where the assets are insufficient to satisfy the liabilities.

(2) Nothing in those rules—

(a) applies to or affects the power of any court, in proceedings by or against the company, to order expenses to be paid by the company, or the liquidator; or

(b) affects the rights of any person to whom such expenses are ordered to be paid.

Estate to be distributed in respect of the accounting periods

[Note: Where in this rule provision is applicable to the provisional liquidator the term provisional liquidator is used.]

7.31 1 The liquidator must make up accounts of the liquidator’s intromissions with the company’s assets in respect of each accounting period. 2 In this Rule, “accounting period” is to be construed as follows— a the first accounting period is the period of 6 months beginning with the date on which the liquidator is appointed (subject to paragraph (3)); b the second accounting period is the period of 6 months beginning with the end of the first accounting period; and c any subsequent accounting period is the period of 12 months beginning with the end of the last accounting period except that— i where the liquidator and the liquidation’ committee agree; or ii where there is no liquidation committee, the court determines, the accounting period is to be such other period beginning with the end of the last accounting period as may be agreed or, as the case may be determined, it is to be that other period. 3 Where a provisional liquidator is appointed under section 135 the first accounting period is the period of 6 months beginning with the date on which the provisional liquidator is appointed. 4 An agreement or determination under paragraph (2)(c)— a may be made in respect of one or more than one accounting period; b may be made before the beginning of the accounting period in relation to which it has effect and, in any event, is not to have effect unless made before the day on which such accounting period would, but for the agreement or determination, have ended; c may provide for different accounting periods to be of different durations; and d may vary the time periods mentioned in— i rule 7.16(1) and paragraphs (10) and (11) of this rule; ii rule 7.19(1)(a) and (5); and iii rule 7.35 (contents of notice to be delivered to creditors owed small debts etc.). 5 Accounting periods are unaffected by any— a recall of the appointment of a provisional liquidator (prior to a winding up order being made); b termination of the appointment of a provisional liquidator and appointment of a liquidator (including an interim liquidator) on the making of a winding up order; c change in the provisional liquidator or liquidator. 6 Subject to the following provisions of this rule, the liquidator must, if the funds of the company’s assets are sufficient and after making an allowance for future contingencies, pay under rule 7.32 (payment of dividends) a dividend out of the company’s assets to the creditors in respect of each accounting period. 7 The liquidator may pay— a the expenses of the liquidation mentioned in rule 7.28(3)(a), other than the liquidator’s own remuneration, at any time; b the preferential debts within the meaning of section 386 at any time but only with the consent of the liquidation committee or, if there is no liquidation committee, of the court. 8 If the liquidator— a is not ready to pay a dividend in respect of an accounting period; or b considers it would be inappropriate to pay such a dividend because the expenses of doing so would be disproportionate to the amount of the dividend, the liquidator may postpone such payment to a date not later than the time for payment of a dividend in respect of the next accounting period. 9 Where an appeal is taken under rule 7.19(5) against the acceptance or rejection of a creditor’s claim, the liquidator must, at the time of payment of dividends and until the appeal is determined, set aside an amount which would be sufficient, if the determination in the appeal were to provide for the claim being accepted in full, to pay a dividend in respect of that claim. 10 Where a creditor— a has failed to produce evidence in support of a claim earlier than 8 weeks before the end of an accounting period on being required by the liquidator to do so under rule 7.18; and b has given a reason for such failure which is acceptable to the liquidator, the liquidator must set aside, for such time as is reasonable to enable the creditor to produce that evidence or any other evidence that will enable the liquidator to be satisfied under rule 7.18, an amount which would be sufficient, if the claim were accepted in full, to pay a dividend in respect of that claim. 11 Where a creditor submits a claim to the liquidator later than 8 weeks before the end of an accounting period but more than 8 weeks before the end of a subsequent accounting period in respect of which, after making allowance for contingencies, funds are available for the payment of a dividend, the liquidator must, if accepting the claim in whole or in part, pay to the creditor— a the same dividend or dividends as has or have already been paid to creditors of the same class in respect of any accounting period or periods; and b whatever dividend may be payable to that creditor in respect of the said subsequent accounting period. 12 Paragraph (11)(a) is without prejudice to any dividend which has already been paid. 13 In the declaration of and payment of a dividend, no payments are to be made more than once by virtue of the same debt. 14 Subject to any notification by the person entitled to a dividend given to the liquidator that the person wishes the dividend to be paid to another person, or has assigned that entitlement to another person, where both a creditor and a member State liquidator have had a claim accepted in relation to the same debt, payment is only to be made to the creditor.

Payment of dividends

7.32

(1) On the expiry of the period within which an appeal may be taken under rule 7.12 or, if an appeal is so taken, on the final determination of the last such appeal, the liquidator must pay to the creditors the dividends in accordance with the scheme of division.

(2) Any dividend—

(a) allocated to a creditor which is not cashed or uplifted; or

(b) dependent on a claim in respect of which an amount has been set aside under rule 7.31 (9) or (10),

must be deposited by the liquidator in an appropriate bank or institution.

(3) If a creditor’s claim is revalued, the liquidator may—

(a) in paying any dividend to that creditor, make such adjustment to it as the liquidator considers necessary to take account of that revaluation; or

(b) require the creditor to repay to the liquidator the whole or part of a dividend already paid to that creditor.

Unclaimed dividends

7.33

(1) Any person, producing evidence of that person’s right, may apply to the Accountant of Court to receive a dividend deposited under section 193(2), if the application is made not later than 7 years after the date of deposit.

(2) If the Accountant of Court is satisfied of the person’s right to the dividend, the Accountant of Court must authorise the bank or institution in which the deposit was made to pay to the person the amount of that dividend and of any interest which has accrued on the dividend.

(3) The Accountant of Court is, at the expiry of 7 years from the date of deposit of any unclaimed dividend or unapplied balance under section 193(2), to hand over the deposit receipt or other voucher relating to the dividend or balance to the Secretary of State.

(4) Where under paragraph (3) the Accountant of Court hands over the deposit receipt or other voucher, the Secretary of State is entitled to payment of the amount due (principal and interest) from the bank or institution in which the deposit was made.

Small debts

7.34

(1) A creditor is deemed to have submitted a claim for the purposes of adjudication of entitlement to and payment of a dividend but not otherwise where—

(a) the debt is a small debt;

(b) notice has been delivered to the creditor under rule 7.35; and

(2) In this rule “small debt” means a debt (being the total amount owed to a creditor) which does not exceed £1,000 (which amount is prescribed for the purposes of paragraph 13A[^f00085] of schedule 8 of the Act and paragraph 18A of schedule 9 of the Act[^f00086]).

Contents of notice to be delivered to creditors owed small debts etc.

7.35

(1) The liquidator may treat a debt, which is a small debt according to the accounting records or the statement of affairs of the company, as if it were accepted under rule 7.19 for the purpose of paying a dividend.

(2) Where the liquidator intends to treat such a debt as if it were accepted under rule 7.19 for the purpose of payment of a dividend, the liquidator must not later than 12 weeks before the end of the accounting period deliver to the creditor a notice.

(3) The notice must—

(a) state the amount of the debt which the liquidator believes to be owed to the creditor according to the accounting records or statement of affairs of the company;

(b) state that the liquidator will treat the debt which is stated in the notice, being for £1,000 or less, as accepted for the purpose of payment of a dividend unless the creditor advises the liquidator that the amount of the debt is incorrect or that no debt is owed;

(c) require the creditor to notify the liquidator by not later than 8 weeks before the end of the accounting period if the amount of the debt is incorrect or if no debt is owed; and

(d) inform the creditor that where the creditor advises the liquidator that the amount of the debt is incorrect the creditor must also submit not later than 8 weeks before the end of the accounting period a statement of claim and documentary evidence of debt (see rule 7.16) in order to receive a dividend.

PART 8 — DECISION MAKING

CHAPTER 1 — Application of Part

Application of Part

8.1

In this Part—

(a) Chapters 2 to 11 apply where the Act or these Rules require a decision to be made by a qualifying decision procedure or permit a decision to be made by the deemed consent procedure; and

(b) Chapter 12 applies to company meetings.

CHAPTER 2 — Decision procedures

[Note: a document required by the Act or these Rules must also contain the standard contents required as set out in Part 1.]

Interpretation

8.2

(1) In these Rules—

“decision date” means— in the case of a decision to be made at a meeting, the date of the meeting; in the case of a decision to be made either by a decision procedure other than a meeting or by the deemed consent procedure, the date the decision is to be made or deemed to have been made, and a decision falling within paragraph (b) is to be treated as made at 23:59 on the decision date;

“decision procedure” means a qualifying decision procedure as prescribed by rule 8.3;

“electronic voting” includes any electronic system which enables a person to vote without the need to attend at a particular location to do so;

“physical meeting” means a meeting where the creditors are invited to be present together at the same place (whether or not it is possible to attend the meeting without being present at that place)[^f00087];

“virtual meeting” means a meeting where persons who are not invited to be physically present together may participate in the meeting including communicating directly with all the other participants in the meeting and voting (either directly or via a proxy-holder);

(2) The decision date is to be set at the discretion of the convener, but must be not less than 14 days from the date of delivery of the notice, except where the table in rule 8.11 requires a different period or the court directs otherwise.

(3) The rules in Chapters 2 to 11 about decision procedures of creditors apply with any necessary modifications to decision making by contributories.

(4) In particular, in place of the requirement for percentages or majorities in decision making by creditors to be determined by value, where the procedure seeks a decision from contributories value must be determined on the percentage of voting rights in accordance with rule 8.39.

The prescribed decision procedures

[Note: under section 246ZE a decision may not be made by a creditors’ meeting (a physical meeting) unless the prescribed proportion of the creditors request in writing that the decision be made by such a meeting.]

8.3 The following decision procedures are prescribed for the purpose of section 246ZE[^f00088] by which a convener may seek a decision under the Act or these Rules from creditors— a correspondence; b electronic voting; c virtual meeting; d physical meeting; e any other decision making procedure which enables all creditors who are entitled to participate in the making of the decision to participate equally.

Electronic voting

8.4

Where the decision procedure uses electronic voting—

(a) the notice delivered to creditors in accordance with rule 8.8 must give them any necessary information as to how to access the voting system including any password required;

(b) except where electronic voting is being used at a meeting, the voting system must be a system capable of enabling a creditor to vote at any time between the notice being delivered and the decision date; and

(c) in the course of a vote the voting system must not provide any creditor with information concerning the vote cast by any other creditor.

Virtual meetings

8.5

Where the decision procedure uses a virtual meeting the notice delivered to creditors in accordance with rule 8.8 must contain—

(a) any necessary information as to how to access the virtual meeting including any telephone number, access code or password required; and

(b) a statement that the meeting may be suspended or adjourned by the chair of the meeting (and must be adjourned if it is so resolved at the meeting).

Physical meetings

8.6

(1) A request for a physical meeting under section 246ZE(3) may be made before or after the notice of the decision procedure or deemed consent procedure has been delivered, but must be made not later than 5 business days after the date on which the convener delivered the notice of the decision procedure or deemed consent procedure unless these Rules provide to the contrary.

(2) It is the convener’s responsibility to check whether any requests for a physical meeting are submitted before the deadline and if so whether in aggregate they meet or surpass one of the thresholds requiring a physical meeting under section 246ZE(7).

(3) Where the prescribed proportion of creditors requires a physical meeting the convener must summon the meeting by giving notice which complies with rule 8.8 so far as applicable and which must also contain a statement that the meeting may be suspended or adjourned by the chair of the meeting (and must be adjourned if it is so resolved at the meeting).

(4) In addition, the notice under paragraph (3) must inform the creditors that as a result of the requirement to hold a physical meeting the original decision procedure or the deemed consent procedure is superseded.

(5) The convener must send the notice under paragraph (3) not later than 3 business days after one of the thresholds requiring a physical meeting has been met or surpassed.

(6) The convener—

(a) may permit a creditor to attend a physical meeting remotely if the convener receives a request to do so in advance of the meeting; and

(b) must include in the notice of the meeting a statement explaining the convener’s discretion to permit remote attendance.

(7) In this rule, attending a physical meeting “remotely” means attending and being able to participate in the meeting without being in the place where the meeting is being held.

(8) For the purpose of determining whether the thresholds under section 246ZE(7) are met, the convener must calculate the value of the creditor’s debt by reference to rule 8.31.

[Note: the deemed consent procedure cannot be used to make a decision on remuneration of any person, or where the Act, these Rules or any other legislation or court order requires a decision to be made by a decision procedure.]

8.7 1 This rule makes further provision about the deemed consent procedure to that set out in section 246ZF[^f00089]. 2 A notice seeking deemed consent must, in addition to the requirements of section 246ZF comply with the requirements of rule 8.8 so far as applicable and must also contain— a a statement that in order to object to the proposed decision a creditor must have delivered a notice, stating that the creditor so objects, to the convener not later than the decision date together with a statement of claim and documentary evidence of debt in accordance with these Rules failing which the objection will be disregarded; b a statement that it is the convener’s responsibility to aggregate any objections to see if the threshold is met for the decision to be taken as not having been made; and c a statement that if the threshold is met the deemed consent procedure will terminate without a decision being made and if a decision is sought again on the same matter it will be sought by a decision procedure. 3 In this rule, the threshold is met where the appropriate number of relevant creditors (as defined in section 246ZF(7)) have objected to the proposed decision. 4 For the purpose of aggregating objections, the convener may presume the value of relevant creditors’ claims to be the value of claims by those creditors who, in the convener’s view, would have been entitled to vote had the decision been sought by a decision procedure in accordance with this Part, even where those creditors had not already met the criteria for such entitlement to vote. 5 Rules 8.31(2) (calculation of voting rights), 8.32 (calculation of voting rights: authorised deposit-taker) and 8.33 (procedure for admitting creditors’ claims for voting) apply to the admission or rejection of a claim for the purpose of the convener deciding whether or not an objection should count towards the total aggregated objections. 6 A decision of the convener on the aggregation of objections under this rule is subject to appeal under rule 8.35 as if it were a decision under Chapter 8 of this Part.

CHAPTER 3 — Notices, voting and venues for decisions

[Note: a document required by the Act or these Rules must also contain the standard contents required as set out in Part 1.]

Notices to creditors of decision procedure

8.8

(1) This rule sets out the requirements for notices to creditors where a decision is sought by a decision procedure.

(2) The convener must deliver a notice to every creditor who is entitled to notice of the procedure.

(3) The notice must contain the following—

(a) identification details for the insolvency proceedings;

(b) details of the decision to be made or of any resolution on which a decision is sought;

(c) a description of the decision procedure which the convener is using, and arrangements, including the venue, for the decision procedure;

(d) a statement of the decision date;

(e) a statement as to when the creditor must have delivered a statement of claim and documentary evidence of debt in accordance with these Rules failing which a vote by the creditor will be disregarded;

(f) a statement that a creditor whose debt is treated as a small debt in accordance with rule 7.35 must still deliver a statement of claim and documentary evidence of debt if that creditor wishes to vote;

(g) a statement that a creditor who has opted out from receiving notices may nevertheless vote if the creditor provides a statement of claim and documentary evidence of debt in accordance with paragraph (e);

(h) in the case of a decision to remove a liquidator in a creditors’ voluntary winding up or a winding up by the court, a statement drawing the attention of creditors to section 173(2) or 174(4) (which relate to the release of the liquidator), as appropriate[^f00090];

(i) except in the case of a physical meeting, a statement that creditors who meet the thresholds in section 246ZE(7) may, within 5 business days from the date of delivery of the notice, require a physical meeting to be held to consider the matter;

(j) in the case of a meeting, a statement that any proxy must be delivered to the convener or chair before it may be used at the meeting;

(k) in the case of a meeting, a statement that, where applicable, a complaint may be made in accordance with rule 8.38 and the period within which such a complaint may be made; and

(l) a statement that a creditor may appeal a decision in accordance with rule 8.35, and the relevant period under rule 8.35 within which such an appeal may be made.

(4) The notice must be authenticated and dated by the convener.

(5) Where the decision procedure is a meeting the notice must be accompanied by a blank proxy complying with rule 9.3.

(6) This rule does not apply if the court orders under rule 8.12 that notice of a decision procedure be given by advertisement only.

Voting in a decision procedure

8.9

(1) In order to be counted in a decision procedure other than where votes are cast at a meeting, votes must—

(a) be received by the convener on or before the decision date; and

(b) in the case of a vote cast by a creditor, be accompanied by a statement of claim and documentary evidence of debt (where the requirement to provide the latter is not dispensed with under rule 8.28(2)) unless already given to the convener.

(2) In a receivership, a creditors’ voluntary winding up or a winding up by the court a vote must be disregarded if—

(a) a statement of claim and, where required, documentary evidence of debt are not received by the convener on or before the decision date or, in the case of a meeting, at or before the meeting (unless under rule 8.26 the chair is content to accept them before resumption of the adjourned meeting); or

(b) the convener decides, in the application of Chapter 8 of this Part, that the creditor is not entitled to cast the vote.

(3) The convener must have received at least one valid vote on or before the decision date in order for the decision to be made.

Venue for the decision procedure

8.10

The convener must have regard to the convenience of those invited to participate when fixing the venue for a decision procedure (including the resumption of an adjourned meeting).

[Note: when an office-holder is obliged to give notice to “the creditors”, this is subject to rule 1.33, which limits the obligation to giving notice to those creditors of whose address the office-holder is aware.]

8.11 1 Notices of decision procedures, and notices seeking deemed consent, must be delivered in accordance with the following table. ProceedingsDecisionsPersons to whom notice must be deliveredMinimum notice required receivershipdecisions of creditorsthe creditors14 dayscreditors’ voluntary winding updecisions of creditors for appointment of liquidator (including any decision made at the same time on the establishment of a liquidation committee)the creditors14 days on conversion from members’ voluntary liquidation, 7 days on conversion from member’s voluntary liquidation where deemed consent has been objected to and in other cases, 3 business dayscreditors’ voluntary winding up or a winding up by the courtdecisions of creditors to consider whether a replacement should be appointed after a liquidator’s resignationthe creditors28 dayswinding up by the courtdecisions of creditors to consider whether to remove or replace the liquidator (other than after a liquidator’s resignation)the creditors14 dayscreditors’ voluntary winding up or a winding up by the courtother decisions of creditorsthe creditors14 dayscreditors’ voluntary winding up or a winding up by the courtdecisions of contributoriesevery person appearing (by the company’s records or otherwise) to be a contributory14 daysmain proceedings in another Member Stateapproval under Article 36(5) of the EU Regulation of proposed undertaking offered by a member State liquidatorall the local creditors in the United Kingdom14 days 2 This rule does not apply where the court orders under rule 8.12 that notice of a decision procedure be given by advertisement only.

Notice of decision procedure by advertisement only

8.12

(1) The court may order that notice of a decision procedure is to be given by advertisement only and not by individual notice to the persons concerned.

(2) In considering whether to make such an order, the court must have regard to the relative cost of advertisement as against the giving of individual notices, the amount of assets available and the extent of the interest of creditors, members or contributories or any particular class of them.

(3) The advertisement must meet the requirements for a notice under rule 8.8(3), and must also state—

(a) that the court ordered that notice of the decision procedure be given by advertisement only; and

(b) the date of the court’s order.

Gazetting and advertisement

8.13

(1) In a creditors’ voluntary winding up or a winding up by the court where a decision is being sought in a meeting the convener must gazette a notice stating—

(a) that a meeting of creditors or contributories is to take place;

(b) the venue for the meeting;

(d) the time and date by which, and place at which, those attending must deliver proxies and statements of claim and documentary evidence of debt (if not already delivered) in order to be entitled to vote.

(2) The notice must also state—

(a) who is the convener in respect of the meeting; and

(b) if the meeting results from a request of one or more creditors under section 246ZE, the fact that it was so summoned.

(3) The notice must be gazetted before or as soon as reasonably practicable after notice of the meeting is delivered in accordance with these Rules.

(4) Information to be gazetted under this rule may also be advertised in such other manner as the convener thinks fit.

(5) The convener may gazette other decision procedures or the deemed consent procedure in which case the equivalent information to that required by this rule must be stated in the notice.

Notice to company officers in respect of meetings

8.14

(1) In a creditors’ voluntary winding up or a winding up by the court notice to participate in a creditors’ meeting must be delivered to every present or former officer of the company whose presence the convener thinks is required and that person is required to attend the meeting.

(2) A notice under this rule must be delivered in compliance with the minimum notice requirements set out in rule 8.2(2) or in compliance with an order of the court under rule 8.12.

Non-receipt of notice of decision

8.15

Where a decision is sought by a notice in accordance with the Act or these Rules, the decision procedure or deemed consent procedure is presumed to have been duly initiated and conducted, even if not everyone to whom the notice is to be delivered has received it.

Decisions on remuneration and conduct

8.16

(1) This rule applies in relation to a decision or resolution which is proposed in a creditors’ voluntary winding up or a winding up by the court and which affects a person in relation to that person’s remuneration or conduct as liquidator (actual, proposed or former).

(2) The following may not vote on such a decision or resolution whether as a creditor, contributory, proxy-holder or corporate representative, except so far as permitted by rule 9.7 (proxy-holder with financial interest)—

(a) that person;

(b) the partners and employees of that person;

(d) the representative of any person mentioned in sub-paragraphs (a) to (c).

CHAPTER 4 — Decision making in particular proceedings

[Note: a document required by the Act or these Rules must also contain the standard contents required as set out in Part 1.]

Decisions in winding up of authorised deposit-takers

8.17

(1) This rule applies in a creditors’ voluntary winding up or a winding up by the court of an authorised deposit-taker.

(2) The directors of a company must deliver a notice of a meeting of the company at which it is intended to propose a resolution for its winding up to the Financial Conduct Authority and to the scheme manager established under section 212(1) of the Financial Services and Markets Act 2000[^f00091].

(3) These notices must be the same as those delivered to members of the company.

(4) Where any decision is sought for the purpose of considering whether a replacement should be appointed after the liquidator’s resignation, removing the liquidator or appointing a new liquidator, the convener must also deliver a copy of the notice by which such a decision is sought to the Financial Conduct Authority and the scheme manager.

(5) A scheme manager who is required by this rule to be given notice of a meeting is entitled to be represented at the meeting.

CHAPTER 5 — Requisitioned decisions

[Note: a document required by the Act or these Rules must also contain the standard contents required as set out in Part 1.]

Requisitions of decision

[Note: this rule is concerned with requests by creditors or contributories for a decision, rather than requests for decisions to be made by way of a physical meeting under section 246ZE(3)[^f00092].]

8.18 1 In this Chapter, “requisitioned decision” means— a a decision requested to be sought under section 142(4)[^f00093], 171(2)(b), 171(3A)[^f00094] or 172(3)[^f00095]; b any other decision sought by a liquidator in a winding up by the court following a request to seek a decision on any matter from— i one-tenth in value of a company’s creditors; or ii one-tenth in value of a company’s contributories. 2 The request for a requisitioned decision must include a statement of the purpose of the proposed decision and either— a a copy of the requesting creditor’s statement of claim or a statement of the requesting contributory’s value, together with— i a list of the creditors or contributories concurring with the request and of the amounts of their respective claims or values; and ii confirmation of concurrence from each creditor or contributory concurring; or b a copy of the requesting creditor’s statement of claim or a statement of the requesting contributory’s value and a statement that that alone is sufficient without the concurrence of other creditors or contributories. 3 A decision procedure must be instigated under section 171(2)(b) for the removal of the liquidator, other than a liquidator appointed by the court under section 108, if 25% in value of the company’s creditors, excluding those who are connected with the company[^f00096], request it. 4 Where a decision procedure under 171(2)(b), 171(3) or 171(3A) is to be instigated, or is proposed to be instigated, the court may, on the application of any creditor, give directions as to the decision procedure to be used and any other matter which appears to the court to require regulation or control.

Expenses and timing of requisitioned decision

8.19

(1) The convener must, not later than 14 days from receipt of a request for a requisitioned decision, provide the requesting creditor with itemised details of the sum to be deposited as caution for payment of the expenses of such procedure.

(2) The convener is not obliged to initiate the decision procedure or deemed consent procedure (where applicable) until either—

(a) the convener has received the required sum; or

(b) the period of 14 days has expired without the convener having informed the requesting creditor or contributory of the sum required to be deposited as caution.

(3) A requisitioned decision must be made within 28 days of the date on which the earlier of the events specified in paragraph (2) of this rule occurs.

(4) The expenses of a requisitioned decision must be paid out of the deposit (if any) unless—

(a) the creditors decide that they are to be payable as an expense of the liquidation; and

(b) in the case of a decision of contributories, the creditors are first paid in full, with interest.

(5) The notice of a requisitioned decision of creditors must contain a statement that the creditors may make a decision as in paragraph (4)(a) of this rule.

(6) Where the creditors do not so decide, the expenses must be paid by the requesting creditor or contributory to the extent that the deposit (if any) is not sufficient.

(7) To the extent that the deposit (if any) is not required for payment of the expenses, it must be repaid to the requesting creditor or contributory.

CHAPTER 6 — Constitution of meetings

Quorum at meetings

8.20

(1) A meeting is not competent to act unless a quorum is in attendance.

(2) A quorum is—

(a) in the case of a meeting of creditors, at least one creditor entitled to vote; and

(b) in the case of a meeting of contributories, at least 2 contributories entitled to vote, or all the contributories, if their number does not exceed 2.

(3) Where the provisions of this rule as to quorum are satisfied by the attendance of the chair alone or the chair and one additional person, but the chair is aware, either by virtue of statements of claim and documentary evidence of debt and proxies received or otherwise, that one or more additional persons would, if attending, be entitled to vote, the chair must delay the start of the meeting by at least 15 minutes after the appointed time.

(4) In this rule, the reference to the number of creditors or contributories necessary to constitute a quorum includes those represented by proxy by any person (including the chair).

Chair at meetings

8.21

(1) The chair of a meeting must be—

(a) the convener; or

(b) an appointed person.

(2) However—

(a) where a decision on the appointment of a liquidator under rule 4.14(2)(b), 4.14(4) or 4.14(6) (information to creditors and appointment of liquidator in creditors voluntary winding up) is made by a meeting the chair of the meeting must be the convener;

(b) where a decision on the appointment of a liquidator under rule 5.22(6) (appointment of liquidator in place of the interim liquidator under section 138(3) in court winding up) is made by a meeting and a resolution is proposed to appoint the interim liquidator to be liquidator another person may be appointed to act as chair for the purpose of choosing the liquidator.

The chair – attendance, interventions and questions

8.22

The chair of a meeting may—

(a) allow any person who has given reasonable notice of wishing to attend to participate in a virtual meeting or to be admitted to a physical meeting;

(b) decide what intervention, if any, may be made at—

(i) a meeting of creditors by any person attending who is not a creditor; or

(ii) a meeting of contributories by any person attending who is not a contributory; and

CHAPTER 7 — Adjournment and suspension of meetings

Adjournment by chair

8.23

(1) The chair may (and must if it is so resolved) adjourn a meeting for not more than 14 days, subject to any direction of the court and to rule 8.24.

(2) Any further adjournment under this rule must not be to a day later than 14 days after the date on which the meeting was originally held, subject to any direction of the court.

Adjournment of meetings to remove a liquidator

8.24

If the chair of a meeting to remove the liquidator in a creditors’ voluntary winding up or a winding up by the court is the liquidator or the liquidator’s nominee and a resolution has been proposed for the liquidator’s removal, the chair must not adjourn the meeting without the consent of at least ½ (in value) of the creditors attending and entitled to vote.

Adjournment in absence of chair

8.25

(1) In a receivership, a creditors’ voluntary winding up or a winding up by the court, if no one attends to act as chair within 30 minutes of the time fixed for a meeting to start, then the meeting is adjourned to the same time and place the following week or, if that is not a business day, to the business day immediately following.

(2) If no one attends to act as chair within 30 minutes of the time fixed for the meeting after a second adjournment under this rule, then the meeting comes to an end.

Statements of claim and documentary evidence of debt in adjournment

8.26

Where a meeting in a receivership, a creditors’ voluntary winding-up or a winding up by the court is adjourned, the chair may allow a statement of claim and documentary evidence of debt (where required) to be used if delivered at or before resumption of the adjourned meeting.

Suspension

8.27

The chair of a meeting may, without an adjournment, declare the meeting suspended for one or more periods not exceeding one hour in total (or, in exceptional circumstances, such longer total period during the same day as the chair may determine).

CHAPTER 8 — Creditors' voting rights and majorities

[Note: a document required by the Act or these Rules must also contain the standard contents required as set out in Part 1.]

Creditors' voting rights

8.28

(1) In a receivership, a creditors’ voluntary winding up or a winding up by the court, a creditor is entitled to vote in a decision procedure or to object to a decision proposed using the deemed consent procedure only if—

(a) the creditor has delivered to the convener a statement of claim and documentary evidence of debt, including any calculation for the purposes of rule 8.31 or 8.32;

(b) the statement of claim and documentary evidence of debt was received by the convener not later than the decision date, or in the case of a meeting, at or before the meeting; and

(2) The convener or chair may dispense with the requirement to produce documentary evidence of debt in paragraph (1)(a) and (b) in respect of any debt or any class or debt.

(3) In the case of a meeting, a proxy-holder is not entitled to vote on behalf of a creditor unless the convener or chair has received the proxy intended to be used on behalf of that creditor.

Scheme manager's voting rights

8.29

(1) For the purpose of voting in a creditors’ voluntary winding up or a winding up by the court of an authorised deposit-taker at which the scheme manager established under section 212(1) of the Financial Services and Markets Act 2000[^f00097] is entitled to be represented under rule 8.17 (but not for any other purpose), the manager may deliver, instead of a statement of claim and documentary evidence of debt, a statement containing—

(a) the names of the creditors of the company in relation to whom an obligation of the scheme manager has arisen or may reasonably be expected to arise;

(b) the amount of each such obligation; and

(2) The manager may from time to time deliver a further statement; and each such statement supersedes any previous statement.

Claim made in proceedings in other member States

8.30

(1) Where in a creditors’ voluntary winding up or a winding up by the court—

(a) a creditor is entitled to vote under rule 8.28(1) (as determined, where that be the case, in accordance with rule 8.35);

(b) that creditor has made the claim in other proceedings;

(d) a member State liquidator casts a vote in respect of the same claim,

only the creditor’s vote is to be counted.

(2) Where in a creditors’ voluntary winding up or a winding up by the court—

(a) a creditor has made a claim in more than one set of other proceedings; and

(b) more than one member State liquidator seeks to vote in respect of that claim,

the entitlement to vote in respect of that claim is exercisable by the member State liquidator in the main proceedings, whether or not the creditor has made the claim in the main proceedings.

(3) In this rule, “other proceedings” means main, secondary or territorial proceedings in another member State.

Calculation of voting rights

8.31

(1) Votes are calculated according to the amount of each creditor’s claim—

(a) in a receivership, as at the date of the appointment of the receiver, less any payments that have been made to the creditor after that date in respect of the claim;

(b) in a creditors’ voluntary winding up or a winding up by the court, as set out in the creditor’s statement of claim and documentary evidence of debt to the extent that it has been admitted.

(2) A creditor may vote in respect of a debt of an unliquidated or unascertained amount if the convener or chair decides to put upon it an estimated minimum value for the purpose of entitlement to vote and admits the claim for that purpose.

(3) Where a debt is wholly secured its value for voting purposes is nil.

(4) Where a debt is partly secured its value for voting purposes is the value of the unsecured part.

(5) No vote may be cast in respect of a claim more than once on any resolution put to the meeting; and for this purpose (where relevant), the claim of a creditor and of any member State liquidator in relation to the same debt are a single claim.

(6) A vote cast in a decision procedure which is not a meeting may not be changed.

(7) Paragraph (5) does notprevent a creditor or member State liquidator from—

(a) voting in respect of less than the full value of an entitlement to vote; or

(b) casting a vote one way in respect of part of the value of an entitlement and another way in respect of some or all of the balance of that value.

Calculation of voting rights: winding up of authorised deposit-taker

8.32

Any voting rights which a creditor might otherwise exercise in respect of a claim in a creditors’ voluntary winding up or a winding up by the court of an authorised deposit-taker are reduced by a sum equal to the amount of that claim in relation to which the scheme manager, by virtue of its having delivered a statement under rule 8.29, is entitled to exercise voting rights.

Procedure for admitting creditors' claims for voting

8.33

(1) The convener or chair in respect of a decision procedure must ascertain entitlement to vote and admit or reject claims accordingly.

(2) The convener or chair may admit or reject a claim in whole or in part.

(3) If the convener or chair is in any doubt whether a claim should be admitted or rejected, the convener or chair must mark it as objected to and allow votes to be cast in respect of it, subject to such votes being subsequently declared invalid if the objection to the claim is sustained.

Requisite majorities

8.34

A decision is made by creditors when a majority (in value) of those voting have voted in favour of the proposed decision.

Appeals against decisions under this Chapter

8.35

(1) A decision of the convener or chair under this Chapter is subject to appeal to the court by a creditor or by a contributory (as applicable).

(2) If the decision is reversed or varied, or votes are declared invalid, the court may order another decision procedure to be initiated or make such order as it thinks just.

(3) An appeal under this rule may not be made later than 21 days after the decision date.

(4) The person who made the decision is not personally liable for expenses incurred by any person in relation to an appeal under this rule unless the court makes an order to that effect.

CHAPTER 9 — Exclusions from meetings

[Note: a document required by the Act or these Rules must also contain the standard contents required as set out in Part 1.]

Action where person excluded

8.36

(1) In this rule and rules 8.37 and 8.38, an “excluded person” means a person who has taken all steps necessary to attend a virtual meeting or has been permitted by the convener to attend a physical meeting remotely under the arrangements which—

(a) have been put in place by the convener of the meeting; but

(b) do not enable that person to attend the whole or part of that meeting.

(2) Where the chair becomes aware during the course of the meeting that there is an excluded person, the chair may—

(a) continue the meeting;

(b) declare the meeting void and convene the meeting again; or

(3) Where the chair continues the meeting, the meeting is valid unless—

(a) the chair decides in consequence of a complaint under rule 8.38 to declare the meeting void and hold the meeting again; or

(b) the court directs otherwise.

(4) Without prejudice to paragraph (2), where the chair becomes aware during the course of the meeting that there is an excluded person, the chair may, at the chair’s discretion and without an adjournment, declare the meeting suspended for any period up to 1 hour.

Indication to excluded person

8.37

(1) A creditor who claims to be an excluded person may request an indication of what occurred during the period of that person’s claimed exclusion.

(2) A request under paragraph (1) must be made in accordance with paragraph (3) as soon as reasonably practicable, and in any event, not later than 4pm on the business day following the day on which the exclusion is claimed to have occurred.

(3) A request under paragraph (1) must be made to—

(a) the chair, where it is made during the course of the meeting; or

(b) the convener where it is made after the meeting.

(4) Where satisfied that the person making the request is an excluded person, the person to whom the request is made under paragraph (3) must deliver the requested indication to the excluded person as soon as reasonably practicable, and in any event, not later than 4pm on the business day following the day on which the request was made under paragraph (1).

Complaint

8.38

(1) A person may make a complaint who—

(a) is, or claims to be, an excluded person; or

(b) attends the meeting and claims to have been adversely affected by the actual, apparent or claimed exclusion of another person.

(2) A complaint under paragraph (1) must be made to the appropriate person who is—

(a) the chair, where it is made during the course of the meeting; or

(b) the convener, where it is made after the meeting.

(3) The complaint must be made as soon as reasonably practicable and, in any event, not later than 4pm on the business day following—

(a) the day on which the person was, appeared or claimed, to be excluded; or

(b) where an indication is sought under rule 8.37, the day on which the complainant received the indication.

(4) The appropriate person must, as soon as reasonably practicable following receipt of the complaint,—

(a) consider whether there is an excluded person;

(b) where satisfied that there is an excluded person, consider the complaint; and

(c) where satisfied that there has been prejudice, take such action as the appropriate person considers fit to remedy the prejudice.

(5) Paragraph (6) applies where the appropriate person is satisfied that the complainant is an excluded person and—

(a) a resolution was voted on at the meeting during the period of the person’s exclusion; and

(b) the excluded person asserts how the excluded person intended to vote on the resolution.

(6) Where the appropriate person is satisfied that if the excluded person had voted as that person intended it would have changed the result of the resolution, then the appropriate person must, as soon as reasonably practicable,—

(a) count the intended vote as having been cast in that way;

(b) amend the record of the result of the resolution;

(c) where notice of the result of the resolution has been delivered to those entitled to attend the meeting, deliver notice to them of the change and the reason for it; and

(d) where notice of the result of the resolution has yet to be delivered to those entitled to attend the meeting, the notice must include details of the change and the reason for it.

(7) Where satisfied that more than one complainant is an excluded person, the appropriate person must have regard to the combined effect of the intended votes.

(8) The appropriate person must deliver notice to the complainant of any decision as soon as reasonably practicable.

(9) A complainant who is not satisfied by the action of the appropriate person may apply to the court for directions and any application must be made no more than 2 business days from the date of receiving the decision of the appropriate person.

CHAPTER 10 — Contributories' voting rights and majorities

Contributories' voting rights and requisite majorities

8.39

In a decision procedure for contributories—

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

(b) a decision is made if more than ½ of the votes cast by contributories are in favour.

CHAPTER 11 — Records

Record of a decision

8.40

(1) Where a decision is sought using a decision procedure, the convener or chair must make a record of the decision procedure.

(2) In the case of a meeting, the record must be in the form of a minute of the meeting.

(3) The record must be authenticated by the convener or chair and must include—

(a) identification details for the insolvency proceedings;

(b) in the case of a decision procedure of creditors, a list of the names of the creditors who participated and their claims;

(d) where a decision is taken on the election of members of a creditors’ committee or liquidation committee, the names and addresses of those elected;

(e) a record of any change to the result of the resolution made under rule 8.38(6) and the reason for any such change; and

(f) in any case, a record of every decision made and how creditors voted.

(4) Where a decision is sought using the deemed consent procedure, the convener must make a record of the procedure.

(5) The record under paragraph (4) must be authenticated by the convener and must—

(a) identify the proceedings;

(b) state whether or not the decision was taken; and

(c) contain a list of the creditors or contributories who objected to the decision, and in the case of creditors, their claims.

(6) A record under this rule must also identify any decision procedure (or the deemed consent procedure) by which the decision had previously been sought.

CHAPTER 12 — Company meetings

Company meetings

8.41

(1) Unless the Act or these Rules provide otherwise, a company meeting must be called and conducted, and records of the meeting must be kept—

(a) in accordance with the law of Scotland, including any applicable provision in or made under the Companies Act, in the case of a company incorporated—

(i) in Scotland, or

(ii) outside the United Kingdom other than in an EEA state;

(b) in accordance with the law of that state applicable to meetings of the company in the case of a company incorporated in an EEA state other than the United Kingdom.

(2) Reference to a company meeting called and conducted to resolve, decide or determine a particular matter includes a reference to that matter being resolved, decided or determined by written resolution.

Remote attendance: notification requirements

8.42

When a meeting is to be summoned and held in accordance with section 246A(3)[^f00098], the convener must notify all those to whom notice of the meeting is being given of—

(a) the ability of a person claiming to be an excluded person to request an indication in accordance with rule 8.45;

(b) the ability of a person within rule 8.46(1) to make a complaint in accordance with that rule; and

Location of company meetings

8.43

(1) This rule applies to a request to the convener of a meeting under section 246A(9)[^f00099] to specify a place for the meeting.

(2) The request must be accompanied by—

(a) a list of the members making or concurring with the request and their voting rights, and

(b) from each person concurring, confirmation of that person’s concurrence.

(3) The request must be delivered to the convener within 7 business days of the date on which the convener delivered the notice of the meeting in question.

(4) Where the convener considers that the request has been properly made in accordance with the Act and this rule, the convener must—

(a) deliver notice to all those previously given notice of the meeting—

(i) that it is to be held at a specified place, and

(ii) as to whether the date and time are to remain the same or not;

(b) set a venue (including specification of a place) for the meeting, the date of which must be not later than 28 days after the original date for the meeting; and

and the notices required by sub-paragraphs (a) and (c) may be delivered at the same or different times.

(5) Where the convener has specified a place for the meeting in response to a request to which this rule applies, the chair of the meeting must attend the meeting by being present in person at that place.

Action where person excluded

8.44

(1) In this rule and rules 8.45 and 8.46, an “excluded person” means a person who has taken all steps necessary to attend a company meeting under the arrangements which—

(a) have been put in place by the convener of the meeting under section 246A(6); but

(b) do not enable that person to attend the whole or part of that meeting.

(2) Where the chair becomes aware during the course of the meeting that there is an excluded person, the chair may—

(a) continue the meeting;

(b) declare the meeting void and convene the meeting again; or

(3) Where the chair continues the meeting, the meeting is valid unless—

(a) the chair decides in consequence of a complaint under rule 8.46 to declare the meeting void and hold the meeting again; or

(b) the court directs otherwise.

(4) Without prejudice to paragraph (2), where the chair becomes aware during the course of the meeting that there is an excluded person, the chair may, in the chair’s discretion and without an adjournment, declare the meeting suspended for any period up to 1 hour.

Indication to excluded person

8.45

(1) A person who claims to be an excluded person may request an indication of what occurred during the period of that person’s claimed exclusion.

(2) A request under paragraph (1) must be made in accordance with paragraph (3) as soon as reasonably practicable, and in any event, not later than 4pm on the business day following the day on which the exclusion is claimed to have occurred.

(3) A request under paragraph (1) must be made to—

(a) the chair where it is made during the course of the meeting; or

(b) the convener where it is made after the meeting.

(4) Where satisfied that the person making the request is an excluded person, the person to whom the request is made under paragraph (3) must deliver the requested indication to the excluded person as soon as reasonably practicable, and in any event, not later than 4pm on the business day following the day on which the request was made under paragraph (1).

Complaint

8.46

(1) A person may make a complaint who—

(a) is, or claims to be, an excluded person; or

(b) attends the meeting and claims to have been adversely affected by the actual, apparent or claimed exclusion of another person.

(2) The complaint under paragraph (1) must be made to the appropriate person who is—

(a) the chair, where the complaint is made during the course of the meeting; or

(b) the convener, where it is made after the meeting.

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The Insolvency (Scotland) (Receivership and Winding up) Rules 2018

7.11

Appeal against fixing of outlays and remuneration: creditors' voluntary winding up and winding up by the court

7.12

Recourse of liquidator to decision of creditors: creditors' voluntary winding up and winding up by the court

7.13

Recourse to the court: creditors' voluntary winding up and winding up by the court

7.14

Creditors' claim that remuneration is excessive: creditors' voluntary winding up and winding up by the court

7.15

CHAPTER 4 — Claims by creditors

Submission of claims

7.16

False claims or evidence

7.17

Evidence of claims

7.18

Adjudication of claims

7.19

Entitlement to draw a dividend

7.20

Liabilities and rights of co-obligants

7.21

Amount which may be claimed generally

7.22

Debts depending on contingency

7.23

Secured debts

7.24

Claims in foreign currency

7.25

CHAPTER 5 — Official rate of interest

Specified rate of interest

7.26

CHAPTER 6 — Distribution of company's assets by the liquidator

Order of priority in distribution

7.27

Order of priority of expenses of liquidation

7.28

Winding up commencing as voluntary

7.29

Saving for powers of the court (section 156)

7.30

Estate to be distributed in respect of the accounting periods

Payment of dividends

7.32

Unclaimed dividends

7.33

Small debts

7.34

Contents of notice to be delivered to creditors owed small debts etc.

7.35

PART 8 — DECISION MAKING

CHAPTER 1 — Application of Part

Application of Part

8.1

CHAPTER 2 — Decision procedures

Interpretation

8.2

The prescribed decision procedures

Electronic voting

8.4

Virtual meetings

8.5

Physical meetings

8.6

Deemed consent

CHAPTER 3 — Notices, voting and venues for decisions

Notices to creditors of decision procedure

8.8

Voting in a decision procedure

8.9

Venue for the decision procedure

8.10

Notice of decision procedures or of seeking deemed consent: when and to whom delivered

Notice of decision procedure by advertisement only

8.12

Gazetting and advertisement

8.13

Notice to company officers in respect of meetings