Insolvency Act 1985

Part I

Qualification

Unqualified persons not to act as insolvency practitioners

1

Qualification of insolvency practitioners

2

• (1) A person who is not an individual is not qualified to act as an insolvency practitioner.

• (2) A person is not qualified to act as an insolvency practitioner at any time unless, at that time—

• (a) he is authorised to act as an insolvency practitioner by virtue of section 3 below; or

• (b) he holds an authorisation granted under section 5 below.

• (3) A person is not qualified to act as an insolvency practitioner in relation to another person at any time unless—

• (a) there is in force at that time security or, in Scotland, caution for the proper performance of his functions; and

• (b) that security or caution meets the prescribed requirements with respect to his so acting in relation to that other person.

• (4) A person is not qualified to act as an insolvency practitioner at any time if, at that time—

• (a) he has been adjudged bankrupt or sequestration of his estate has been awarded and (in either case) he has not been discharged;

• (b) he is subject to a disqualification order made under sections 296 to 299 of the 1985 Act or Chapter I of Part II of this Act; or

• (c) he is a patient within the meaning of Part VII of the Mental Health Act 1983 or section 125(1) of the Mental Health (Scotland) Act 1984.

Authorisation of members of recognised professional bodies

Authorisation of members of recognised professional bodies

3

• (1) A member of a recognised professional body is authorised to act as an insolvency practitioner if he is permitted so to act by or under the rules of that body.

• (2) The Secretary of State may by order declare a body which appears to him to fall within subsection (3) below to be a recognised professional body for the purposes of this section; and any such order may be revoked by a further order if it appears to the Secretary of State that the body no longer falls within that subsection.

• (3) This subsection applies to any body which regulates the practice of a profession and maintains and enforces rules for securing that such of its members as are permitted by or under the rules to act as insolvency practitioners—

• (a) are fit and proper persons so to act; and

• (b) meet acceptable requirements as to education and practical training and experience.

• (4) Any order under subsection (2) above shall have effect from such date as is specified in the order ; and any such order revoking a previous order may make provision whereby members of the body in question continue to be treated as authorised to act as insolvency practitioners for a specified period after the revocation takes effect.

• (5) In this section references to members of a recognised professional body are references to persons who, whether members of that body or not, are subject to its rules in the practice of the profession in question.

Authorisation by relevant authority

Applications for authorisation

4

• (1) An application for authorisation under section 5 below—

• (a) shall be made in such manner as the relevant authority may direct;

• (b) shall contain or be accompanied by such information as that authority may reasonably require for the purpose of determining the application; and

• (c) shall be accompanied by the prescribed fee ;

and the relevant authority may direct that notice of the making of the application shall be published in such manner as may be specified in the direction.

• (2) At any time after receiving the application and before determining it the relevant authority may require the applicant to furnish additional information.

• (3) Directions and requirements given or imposed under subsection (1) or (2) above may differ as between different applications.

• (4) Any information to be furnished to the relevant authority under this section shall, if it so requires, be in such form or verified in such manner as it may specify,

• (5) An application for authorisation under section 5 below may be withdrawn before it is granted or refused.

• (6) Any sums received under this section by a relevant authority other than the Secretary of State may be retained by that authority; and any sums received under this section by the Secretary of State shall be paid into the Consolidated Fund.

Grant, refusal and withdrawal of authorisation

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• (1) The relevant authority may, on an application duly made in accordance with section 4 above and after being furnished with all such information as it may require under that section, grant or refuse the application.

• (2) The relevant authority shall grant the application if it appears to it from the information furnished by the applicant and having regard to such other information, if any, as it may have—

• (a) that the applicant is a fit and proper person to act as an insolvency practitioner; and

• (b) that the applicant meets the prescribed requirements with respect to education and practical training and experience.

• (3) An authorisation shall, unless previously withdrawn, continue in force for such period not exceeding the prescribed maximum as may be specified in the authorisation.

• (4) An authorisation granted under this section may be withdrawn by the relevant authority if it appears to it—

• (a) that the holder of the authorisation is no longer a fit and proper person to act as an insolvency practitioner; or

• (b) without prejudice to paragraph (a) above, that the holder of the authorisation has failed to comply with any provision of this Part or of any regulations made under it or, in purported compliance with any such provision, has furnished the relevant authority with false, inaccurate or misleading information.

• (5) An authorisation granted under this section may be withdrawn by the relevant authority at the request or with the consent of the holder of the authorisation.

Notices

6

• (1) Where the relevant authority grants an authorisation, it shall give written notice of that fact to the applicant, specifying the date on which the authorisation takes effect.

• (2) Where the relevant authority proposes to refuse an application or to withdraw an authorisation under section 5(4) above, it shall give the applicant or holder of the authorisation written notice of its intention to do so, setting out particulars of the grounds on which it proposes to act.

• (3) In the case of a proposed withdrawal the notice under subsection (2) above shall state the date on which it is proposed that the withdrawal should take effect.

• (4) A notice under subsection (2) above shall give particulars of the rights exercisable under sections 7 and 8 below by a person on whom the notice is served.

Right to make representations

7

• (1) A person on whom a notice is served under section 6(2) above may within fourteen days after the date of service make written representations to the relevant authority.

• (2) The relevant authority shall have regard to any representations made in accordance with this section in determining whether to refuse the application or withdraw the authorisation, as the case may be.

Reference to Tribunal

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• (1) Where a person is served with a notice under section 6(2) above, he may—

• (a) at any time within twenty-eight days after the date of service of the notice; or

• (b) at any time after the making by him of any representations in accordance with section 7 above and before the end of the period of twenty-eight days after the date of the service on him of a notice by the relevant authority that the authority does not propose to alter its decision in consequence of the representations give written notice to the relevant authority requiring the case to be referred to the Tribunal referred to in subsection (6) below.

• (2) Where a requirement is made in accordance with subsection (1) above, then, unless the relevant authority —

• (a) has decided or decides to grant the application or, as the case may be, not to withdraw the authorisation ; and

• (b) within seven days after the date of the making of the requirement, gives written notice of that decision to the person by whom the requirement was made,

it shall refer the case to the Tribunal.

• (3) On a reference under this section the Tribunal shall—

• (a) investigate the case ; and

• (b) make a report to the relevant authority stating what would in their opinion be the appropriate decision in the matter and the reasons for that opinion ;

and it shall be the duty of the relevant authority to decide the matter accordingly.

• (4) The Tribunal shall send a copy of the report to the applicant or, as the case may be, the holder of the authorisation; and the relevant authority shall serve him with a written notice of the decision made by it in accordance with the report.

• (5) The relevant authority may, if it thinks fit, publish the report of the Tribunal.

• (6) For the purposes Of this section there shall be a tribunal—

• (a) which shall be known as the Insolvency Practitioners Tribunal (in this Part referred to as " the Tribunal "); and

• (b) in relation to which the provisions of Schedule 1 "to this Act shall apply.

Refusal or withdrawal without reference to Tribunal

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Where in the case of any proposed refusal or withdrawal of an authorisation either—

• (a) the period mentioned in paragraph (a) of subsection (1) of section 8 above has expired without the making of any requirement under that subsection or of any representations under section 7 above; or

• (b) the relevant authority has given a notice such as is mentioned in paragraph (b) of that subsection and the period so mentioned has expired without the, making of any such requirement,

the relevant authority May give written notice of the refusal or withdrawal to the person concerned in accordance with the proposal in the notice given by it under section 6(2) above.

Supplemental

Regulations, rules and orders

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• (1) The Secretary of State may make regulations for the purpose of giving effect to this Part.

• (2) Without prejudice to the generality of subsection (1) above or to any provision of this Part by virtue of which regulations may be made with respect to any matter, regulations under this section may contain—

• (a) provision as to the matters to be taken into account in determining whether a person is a fit and proper person to act as an insolvency practitioner ;

• (b) provision prohibiting a person from acting as an in solvency practitioner in prescribed cases, being cases in which a conflict of interest will or may arise;

• (c) provision imposing requirements with respect to—

• (i) the preparation and keeping by a person who acts as an insolvency practitioner of prescribed books, accounts and other records ; and

• (ii) the production of those books, accounts and records to prescribed persons ;

• (d) provision conferring power on prescribed persons—

• (i) to require any person who acts or has acted as an insolvency practitioner to answer any inquiry in relation to a case in which he is so acting or has so acted ; and

• (ii) to apply to a court to examine such a person or any other person on oath concerning such a case;

• (e) provision making non-compliance with any of the regulations a criminal offence; and

• (f) such incidental, supplemental and transitional provisions as may appear to the Secretary of State necessary or expedient.

• (3) Any power conferred by this Part to make regulations, rules or orders shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

• (4) Any rule or regulation under this Part may make different provision with respect to different cases or descriptions of cases, including different provision for different areas.

Interpretation of Part I

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In this Part—

• " prescribed " means prescribed by regulations made by the Secretary of State ;

• " the relevant authority " means— in relation to a case of any description specified in directions given by the Secretary of State, the body or person so specified in relation to cases of that description; and in relation to a case not falling within paragraph above, the Secretary of State ;

• " the Tribunal" means the Insolvency Practitioners Tribunal.

Part II

CHAPTER I — Disqualification and Personal Liability of Directors and Others

Duty of court to disqualify unfit directors of insolvent companies

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Disqualification after investigation of company

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• (1) If it appears to the Secretary of State from a report made by inspectors under section 437 of the 1985 Act, or from information or documents obtained under section 447 or 448 of that Act, that it is expedient in the public interest that a disqualification order should be made against any person who is or has been a director of any company, he may apply to the court for such an order to be made against that person.

• (2) The court may make a disqualification order against a person where, on an application under this section, the court is satisfied that his conduct in relation to the company makes him unfit to be concerned in the management of a company.

• (3) In this section " the court" means the High Court or, in Scotland, the Court of Session.

Matters for determining unfitness of directors

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• (1) Where it falls to a court to determine whether a person's conduct as a director of any particular company or companies makes him unfit as mentioned in section 12(1) or 13(2) above, the court shall, as respects his conduct as a director of that company or, as the case may be, each of those companies, have regard in particular—

• (a) to the matters mentioned in Part I of Schedule 2 to this Act; and

• (b) where the company has become insolvent, to the matters mentioned in Part II of that Schedule ;

and references in that Schedule to the director and to the company shall be construed accordingly.

• (2) Subsection (7) of section 12 above applies for the purposes of this section and Schedule 2 to this Act as it applies for the purposes of that section.

• (3) Subject to subsection (4) below, any reference in Schedule 2 to this Act to any enactment contained in the 1985 Act or this Act shall include, in relation to any time before the Coming into force of that enactment, a reference to the corresponding enactment in force at that time.

• (4) The Secretary of State may by order modify any of the provisions of Schedule 2 to this Act; and such an order may contain such transitional provisions as may appear to the Secretary of State necessary or expedient.

• (5) The power to make orders under this section shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Responsibility for company's wrongful trading

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Disqualification of persons held to be liable to contribute to company's assets

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Restriction on use of company names

17

Personal liability of persons acting while disqualified

18

Summary remedy against delinquent directors, liquidators etc.

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CHAPTER II — Voluntary Arrangements

Preliminary

Application of Chapter II

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This Chapter applies where

• (a) in the case of a company which is being wound up or in relation to which an administration order is in force, the liquidator or administrator intends; or

• (b) in the case of any other company, the directors intend,

to make a proposal to the company and to its creditors for a composition in satisfaction of its debts or a scheme of arrangement of its affairs, being a proposal which provides for some person who is qualified to act as an insolvency practitioner in relation to the company (in this Chapter referred to as " the nominee ") to act in relation to the composition or scheme either as trustee or otherwise for the purpose of supervising its implementation.

Procedure pending consideration of proposal

Report by nominee who is not liquidator or administrator

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• (1) Where the nominee is not the liquidator or administrator of the company, he shall, within twenty-eight days (or such longer period as the court may allow) after he is given notice of the proposal, submit a report to the court stating—

• (a) whether, in his opinion, meetings of the company and of its creditors should be summoned to consider the proposal ; and

• (b) if in his opinion such meetings should be summoned, the date on which, and time and place at which, he proposes the meetings should be held.

• (2) For the purposes of enabling the nominee to prepare his report the person intending to make the proposal shall submit to the nominee—

• (a) a document setting out the terms of the composition or scheme which he is proposing ; and

• (b) a statement of the company's affairs containing—

• (i) such particulars of its creditors and of its debts and other liabilities and of its assets as may be prescribed ; and

• (ii) such other information as may be prescribed.

• (3) The court may, on an application made by the person intending to make the proposal, in a case where the nominee has failed to submit the report required by this section, direct that the nominee shall be replaced as such by another person qualified to act as an insolvency practitioner in relation to the company.

Summoning of meetings

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• (1) Where the nominee is not the liquidator or administrator of the company and a person has reported to the court under section 21 above that such meetings as are mentioned in subsection (1) of that section should be summoned, that person shall, unless the court otherwise directs, summon those meetings for the time, date and place proposed in his report.

• (2) Where the nominee is the liquidator or administrator of the company, he shall summon meetings of the company and of its creditors to consider the proposal for such a time, date and place as he thinks fit.

• (3) The persons who shall be summoned to a creditors' meeting under this section shall be every creditor of the company of whose claim and address the person summoning the meeting is aware.

Consideration and implementation of proposal

Decisions of meetings

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• (1) The meetings summoned under section 22 above shall decide whether to approve the proposed composition or scheme (with or without modifications).

• (2) The modifications subject to which the proposed composition or scheme may be approved may include one conferring the functions proposed to be conferred on the nominee on another person qualified to act as an insolvency practitioner in relation to the company but shall not include any modification by virtue of which the proposal ceases to be a proposal such as is mentioned in section 20 above.

• (3) Except with the concurrence of the secured creditor concerned, a meeting summoned under section 22 above shall not approve any proposal or modification which affects the right of a secured creditor of the company to enforce his security.

• (4) Except with the concurrence of the preferential creditor concerned, a meeting summoned under section 22 above shall not approve any proposal or modification under which—

• (a) any preferential debt of the company is to be paid otherwise than in priority to such of its debts as are not preferential debts; or

• (b) a preferential creditor of the company is to be paid an amount in respect of a preferential debt that bears to that debt a smaller proportion than is borne to another preferential debt by the amount that is to be paid in respect of that other debt.

• (5) Subject to subsections (1) to (4) above, a meeting summoned under section 22 above shall be conducted in accordance with the rules.

• (6) After the conclusion in accordance with the rules of a meeting summoned under section 22 above, the chairman of the meeting shall report the result of the meeting to the court, and, immediately after reporting to the court, shall give notice of the result of the meeting to such persons as may be prescribed.

• (7) In this section " preferential debt " means any of the debts which in a winding up are, under section 89 below and Schedule 4 to this Act (read with Schedule 3 to the Social Security Pensions Act 1975), to be paid in priority to all other debts, and " preferential creditor "shall be construed accordingly.

• (8) For the purposes of this section, Schedule 4 to this Act and Schedule 3 to the said Act of 1975 shall each have effect, in relation to a company which is not being wound up, as if—

• (a) references to the relevant date were references to the date of the making of the administration order or, where no such order has been made, the date of the approval of the proposal; and

• (b) references to the company being wound up were references to the administration order being made or, as the case may be, the proposal being approved.

Effect of an approval

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• (1) This section has effect where-each of the meetings summoned under section 22 above approves the proposed composition or scheme either with the same modifications or without modifications.

• (2) The approved composition or scheme shall take effect as if made by the company at the creditors' meeting and shall bind every person who in accordance with the rules had notice of, and was entitled to vote at, that meeting (whether or not he was present or represented at the meeting) as if he were a party to the composition or scheme.

• (3) Subject to subsection (4) below, if the company is being wound up or an administration order is in force in relation to the company, the court may do one or both of the following, namely—

• (a) by order stay or sist all proceedings in the winding up or discharge the administration order ;

• (b) give such directions with respect to the conduct of the winding up or the administration as it thinks appropriate for facilitating the implementation of the approved composition or scheme.

• (4) The court shall not make an order under subsection (3)(a) above—

• (a) at any time before the end of the period of twenty-eight days beginning with the first day on which each of the reports required by section 23(6) above has been made to the court; or

• (b) at any time when an application under section 25 below or an appeal in respect of such an application is pending or at any time in the period within which such an appeal may be brought

Challenge of decisions

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• (1) Subject to the provisions of this section, an application to the court may be made, by any of the persons specified in subsection (2) below, on one or both of the following grounds, namely—

• (a) that a composition or scheme approved at the meetings summoned under section 22 above unfairly prejudices the interests of a creditor, member or contributory of the company;

• (b) that there has been some material irregularity at or in relation to either of the meetings.

• (2) The persons who shall be entitled to make an application under this section shall be—

• (a) a person entitled, in accordance with the rules, to vote at either of the meetings;

• (b) the nominee or any person who has replaced him under section 21(3) or 23(2) above; and

• (c) if the company is being wound up or an administration order is in force in relation to the company, the liquidator or administrator of the company.

• (3) An application under this section shall not be made after the end of the period of twenty-eight days beginning with the first day on which each of the reports required by section 23(6) above has been made to the court.

• (4) Where on an application under this section the court is satisfied as to either of the grounds mentioned in subsection (1) above, it may do one or both of the following, namely—

• (a) revoke or suspend the approvals given by the meetings or, in a case falling within subsection (1)(b) above, any approval given by the meeting in question ;

• (b) give a direction to any person for the summoning of further meetings to consider any revised proposal the person who made the original proposal may make or, in a case falling within subsection (1)(b) above, a further company or, as the case may be, creditors' meeting to reconsider the original proposal.

• (5) Where at any time after giving a direction under subsection (4)(b) above for the summoning of meetings to consider a revised proposal the court is satisfied that the person who made the original proposal does not intend to submit a revised proposal, the court shall revoke the direction and revoke or suspend any approval given at the previous meetings.

• (6) In any case where the court, on an application made under this section with respect to any meeting, gives a direction under subsection (4)(b) above or revokes or suspends an approval under subsection (4)(a) or (5) above, the court may give such supplemental directions as it thinks fit and, in particular, directions with respect to things done since the meeting under any composition or scheme approved by the meeting.

• (7) Except in pursuance of the preceding provisions of this section an approval given at a meeting summoned under section 22 above shall not be invalidated by any irregularity at or in relation to the meeting.

Implementation and supervision of approved composition or scheme

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• (1) This section applies where a composition or scheme approved by the meetings summoned under section 22 above has taken effect

• (2) The person who is for the time being carrying out in relation to the composition or scheme the functions conferred by virtue of the approval on the nominee, or by virtue of section 21(3) or 23(2) above on a person other than the nominee, shall be known as the supervisor of the composition or scheme.

• (3) If any of the company's creditors or any other person is dissatisfied by any act, omission or decision of the supervisor, he may apply to the court; and on such an application the court may confirm, reverse or modify any act or decision of the supervisor, may give him directions or may make such other order as it thinks fit.

• (4) The supervisor may apply to the court for directions in relation to any particular matter arising under the composition or scheme and shall be included among the persons who may apply to the court for the winding up of the company or for an administration order to be made in relation to the company.

• (5) The court may, whenever—

• (a) it is expedient to appoint a person to carry out the functions of the supervisor; and

• (b) it is inexpedient, difficult or impracticable for an appointment to be made without the assistance of the court,

make an order appointing a person who is qualified to act as an insolvency practitioner in relation to the company, either in substitution for the existing supervisor or to fill a vacancy.

• (6) The power conferred by subsection (5) above shall be exercisable so as to increase the number of persons exercising the functions of the supervisor or, where there is more than one person exercising those functions, so as to replace one or more of those persons.

CHAPTER III — Administration Orders

Making etc. of administration orders

Power to make order

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• (1) Subject to subsection (2) below, if the court—

• (a) is satisfied that a company is or is likely to becomeunable to pay its debts; and

• (b) considers that the making of an order under this section would be likely to achieve one or more of the purposes mentioned in subsection (3) below,

the court may make an administration order in relation to the company, that is to say, an order directing that, during the period for which the order is in force, the affairs, business and property of the company shall be managed by a person (to be known as " the administrator ") appointed for the purpose by the court; and such an order shall specify the purpose or purposes for whose achievement it is made.

• (2) An administration order shall not be made in relation to a company—

• (a) after the company has gone into liquidation;

• (b) where the company is an insurance company within the meaning of the Insurance Companies Act 1982 ; or

• (c) where the company is a recognised bank or licensed institution within the meaning of the Banking Act 1979 or an institution to which sections 16 and 18 of that Act apply as if it were a licensed institution.

• (3) The purposes referred to in subsection (1)(b) above are—

• (a) the survival of the company, and the whole or any part of its undertaking, as a going concern ;

• (b) the approval under section 23 above of a composition in satisfaction of the company's debts or a scheme of arrangement of its affairs ;

• (c) the sanctioning under section 425 of the 1985 Act of a compromise or arrangement between the company and any such persons as are mentioned in that section ; and

• (d) a more advantageous realisation of the company's assets than would be effected on a winding up.

• (4) Section 518 of the 1985 Act (definition of inability to pay debts) shall apply for the purposes of this section as it applies for the purposes of Chapter II of Part XX of that Act.

Application for order

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• (1) An application to the court for an administration order shall be by petition presented either by the company or the directors, or by a creditor or creditors (including any contingent or prospective creditor or creditors), or by all or any of those parties, together or separately.

• (2) Where a petition is presented to the court—

• (a) notice of the petition shall be given forthwith to any person who has appointed, or is or may be entitled to appoint, an administrative receiver of the company and to such other persons as may be prescribed; and

• (b) the petition shall not be withdrawn except with the leave of the court.

• (3) Where the court is satisfied that there is an administrative receiver of the company, the court shall dismiss the petition unless it is also satisfied either—

• (a) that the person by whom or on whose behalf the receiver was appointed has consented to the making of the order; or

• (b) that, if an administration order were made, any security by virtue of which the receiver was appointed would be liable to be released or discharged under section 101 below, would be avoided under section 104 below or would be challengeable under section 615A or 615B of the 1985 Act or under any rule of law in Scotland.

• (4) Subject to subsection (3) above, on hearing a petition the court may dismiss the petition, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order that it thinks fit.

• (5) Without prejudice to the generality of subsection (4) above, an interim order under that subsection may restrict the exercise of any powers of the directors or of the company (whether by reference to the consent of the court or of a person qualified to act as an insolvency practitioner in relation to the company or otherwise).

Effect of application

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• (1) During the period beginning with the presentation of a petition for an administration order and ending with the making of such an order or the dismissal of the petition—

• (a) no resolution may be passed or order made for the winding up of the company ;

• (b) no steps may be taken to enforce any security over the company's property, or to repossess goods in the company's possession under any hire-purchase agreement, except with the leave of the court and subject to such terms as the court may impose; and

• (c) no other proceedings and no execution or other legal process may be commenced or continued, and no distress may be levied, against the company or its property except with the leave of the court and subject to such terms as aforesaid.

• (2) Nothing in subsection (1) above shall require the leave of the court—

• (a) for the presentation of a petition for the winding up of the company;

• (b) for the appointment of an administrative receiver of the company; or

• (c) for the carrying out by such a receiver (whenever appointed) of any of his functions.

• (3) Where

• (a) a petition for an administration order is presented at a time when there is an administrative receiver of the company; and

• (b) the person by or on whose behalf the receiver was appointed has not consented to the making of the order,

the period mentioned in subsection (1) above shall be deemed not to begin unless and until that person so consents.

• (4) References in this section and section 30 below to hire-purchase agreements include references to conditional sale agreements, chattel leasing agreements and retention of title agreements.

• (5) In the application of this section and section 30 below to Scotland, references to execution being commenced or continued shall include references to diligence being carried out or continued and references to distress being levied shall be omitted.

Effect of order

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• (1) On the making of an administration order—

• (a) any petition for the winding up of the company shall be dismissed; and

• (b) any administrative receiver of the company shall vacate office.

• (2) Where an administration order has been made, any receiver of part of the company's property shall vacate office on being required to do so by the administrator.

• (3) During the period for which an administration order is in force—

• (a) no resolution may be passed or order made for the winding up of the company ;

• (b) no administrative receiver of the company may be appointed;

• (c) no other steps may be taken to enforce any security over the company's property, or to repossess goods in the company's possession under any hire-purchase agreement, except with the consent of the administrator or the leave of the court and subject (where the court gives leave) to such terms as the court may impose; and

• (d) no other proceedings and no execution or other legal process may be commenced or continued, and no distress may be levied, against the company or its property except with the consent of the administrator or the leave of the court and subject (where the court gives leave) to such terms as aforesaid.

• (4) Where at any time an administrative receiver of the company has vacated office under subsection (1)(b) above or a receiver of part of the company's property has vacated office under subsection (2) above—

• (a) his remuneration and any expenses properly incurred by him; and

• (b) any indemnity to which he is entitled out of the assets of the company,

shall be charged on and, subject to subsection (3) above, paid out of any property of the company which was in his custody or under his control at that time in priority to any security held by the person by or on whose behalf he was appointed.

• (5) Neither an administrative receiver of a company who vacates office under subsection (1)(b) above nor a receiver of part of a company's property who vacates office under subsection (2) above shall be required on or after so vacating office to take any steps for the purpose of complying with any duty imposed on him by section 196 or 475 of the 1985 Act (duty to pay preferential creditors).

Notification of order

31

• (1) Every invoice, order for goods or business letter which, at a time when an administration order is in force in relation to a company, is issued by or on behalf of the company or the administrator, being a document on or in which the company's name appears, shall also contain the administrator's name and a statement that the affairs, business and property of the company are being managed by the administrator.

• (2) If default is made in complying with this section, the company and any of the following persons who without reasonable excuse authorises or permits the default, namely, the administrator and any officer of the company, shall be liable on summary conviction to a fine not exceeding one-fifth of the statutory maximum.

Administrators

Appointment of administrator

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• (1) The administrator of a company shall be appointed either by the administration order or by an order under subsection (2) below.

• (2) If a vacancy occurs by death, resignation or otherwise in the office of administrator of a company, the court may by order fill the vacancy.

• (3) An application for an order under subsection (2) above may be made—

• (a) by any continuing administrator of the company ; or

• (b) where there is no such administrator, by any committee established under section 43 below; or

• (c) where there is no such administrator and no such committee, by the company or the directors or by any creditor or creditors of the company.

General powers

33

• (1) The administrator of a company—

• (a) may do all such things as may be necessary for the management of the affairs, business and property of the company; and

• (b) without prejudice to the generality of paragraph (a) above, shall have the powers specified in Schedule 3 to this Act;

and in the application of that Schedule to the administrator of a company the words " he " and " him " shall be taken to refer to the administrator.

• (2) The administrator of a company shall also have power—

• (a) to remove any director of the company and to appoint any person to be a director of the company, whether to fill any vacancy or otherwise ; and

• (b) to call any meeting of the members or creditors of the company.

• (3) The administrator may apply to the court for directions in relation to any particular matter arising in connection with the carrying out of his functions.

• (4) Any power conferred on the company or its officers, whether by this Part or the 1985 Act or by the memorandum or articles of association, which could be exercised in such a way as to interfere with the exercise by the administrator of his powers shall not be exercisable except with the consent of the administrator, which may be given either generally or in relation to particular cases.

• (5) In exercising his powers the administrator of a company shall be deemed to be acting as agent of the company.

• (6) A person dealing with the administrator of a company in good faith and for value shall not be concerned to inquire whether the administrator is acting within his powers.

Power to deal with charged property etc.

34

• (1) The administrator of a company may dispose of or otherwise exercise his powers in relation to any property of the company which is subject to a security to which this subsection applies as if the property were not subject to the security.

• (2) Where, on an application by the administrator of a company, the court is satisfied that the disposal (with or without other assets) of—

• (a) any property of the company subject to a security to which this subsection applies ; or

• (b) any goods in the possession of the company under a hire purchase agreement,

would be likely to promote the purpose or one or more of the purposes specified in the administration order, the court may by order authorise the administrator to dispose of the property as if it were not subject to the security or to dispose of the goods as if all rights of the owner under the hire-purchase agreement were vested in the company.

• (3) Subsection (1) above applies to any security which, as created, was a floating charge and subsection (2) above applies to any other security.

• (4) Where any property is disposed of under subsection (1) above, the holder of the security shall have the same priority in respect of any property of the company directly or indirectly representing the property disposed of as he would have had in respect of the property subject to the security.

• (5) It shall be a condition of an order under subsection (2) above that—

• (a) the net proceeds of the disposal; and

• (b) where those proceeds are less than such amount as may be determined by the court to be the net amount which would be realised on a sale of the property or goods in the open market by a willing vendor, such sums as may be required to make good the deficiency,

shall be applied towards discharging the sums secured by the security or payable under the hire-purchase agreement.

• (6) Where a condition imposed in pursuance of subsection (5) above relates to two or more securities, that condition shall require the net proceeds of the disposal and, where paragraph (b) of that subsection applies, the sums mentioned in that paragraph to be applied towards discharging the sums secured by those securities in the order of their priorities.

• (7) An office copy of an order under subsection (2) above shall, within fourteen days after the making of the order, be sent by the administrator to the registrar of companies.

• (8) If the administrator without reasonable excuse fails to comply with subsection (7) above, he shall be liable on summary conviction to a fine not exceeding one-fifth of the statutory maximum and, for continued contravention, to a daily default fine not exceeding one-fiftieth of the statutory maximum.

• (9) Where any property is disposed of under this section in its application to Scotland, the administrator shall grant to the disponee an appropriate document of transfer or conveyance of the property, and—

• (a) that document; or

• (b) where any recording, intimation or registration of that document is a legal requirement for completion of title to the property, that recording, intimation or registration,

has the effect of disencumbering the property of or, as the case may be, freeing the property from the security.

• (10) Where any goods in the possession of the company under a hire-purchase agreement are disposed of under this section in its application to Scotland, the disposal shall have the effect of extinguishing, as against the disponee, all rights of the owner of the goods under the hire-purchase agreement.

• (11) Nothing in this section shall be taken as prejudicing applications to the court under section 44 below.

• (12) References in this section to hire-purchase agreements include references to conditional sale agreements, chattel leasing agreements and retention of title agreements.

General duties

35

• (1) The administrator of a company shall, on his appointment, take into his custody or under his control all the property to which the company is or appears to be entitled.

• (2) The administrator of a company shall manage the affairs, business and property of the company—

• (a) at any time before proposals have been approved (with or without modifications) under section 41 below, in accordance with any directions given by the court; and

• (b) at any time after proposals have been so approved, in accordance with those proposals as from time to time revised, whether by him or a predecessor of his.

• (3) The administrator of a company shall summon a meeting of the company's creditors if—

• (a) he is requested, in accordance with the rules, to do so by one-tenth, in value, of the company's creditors ; or

• (b) he is directed to do so by the court.

Applications for discharge or variation of administration order

36

• (1) The administrator of a company may at any time apply to the court for the administration order to be discharged, or to be varied so as to specify an additional purpose.

• (2) The administrator of a company shall make an application under this section if—

• (a) it appears to him that the purpose or each of the purposes specified in the order either has been achieved or is incapable of achievement; or

• (b) he is required to do so by a meeting of the company's creditors summoned for the purpose in accordance with the rules.

• (3) On the hearing of an application under this section, the court may by order discharge or vary the administration order and make such consequential provision as it thinks fit, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order it thinks fit.

• (4) Where the administration order is discharged or varied, the administrator shall, within fourteen days after the making of the order effecting the discharge or variation, send an office copy of that order to the registrar of companies.

• (5) If the administrator without reasonable excuse fails to comply with subsection (4) above, he shall be liable on summary conviction to a fine not exceeding one-fifth of the statutory maximum and, for continued contravention, to a daily default fine not exceeding one-fiftieth of the statutory maximum.

Vacation of office and release

37

• (1) The administrator of a company may at any time be removed from office by order of the court and may, in the prescribed circumstances, resign his office by giving notice of his resignation to the court.

• (2) The administrator of a company shall vacate office if—

• (a) he ceases to be qualified to act as an insolvency practitioner in relation to the company; or

• (b) the administration order is discharged.

• (3) Where at any time a person ceases to be the administrator of a company—

• (a) his remuneration and any expenses properly incurred by him shall be charged on and paid out of any property of the company which is in his custody or under his control at that time in priority to any security to which section 34(1) above then applies; and

• (b) any sums payable in respect of debts or liabilities incurred, while he was administrator, under contracts entered into or contracts of employment adopted by him or a predecessor of his in the carrying out of his or the predecessor's functions shall be charged on and paid out of any such property as is mentioned in paragraph (a) above in priority to any charge arising under that paragraph;

and for the purposes of paragraph (b) above the administrator is not to be taken to have adopted a contract of employment by reason of anything done or omitted to be done within fourteen days after his appointment.

• (4) A person who has ceased to be the administrator of a company shall have his release with effect from the following time, that is to say—

• (a) in the case of a person who has died, the time at which notice is given to the court in accordance with the rules that that person has ceased to hold office;

• (b) in any other case, such time as the court may determine.

• (5) Where a person has his release under this section, he shall, with effect from the time specified in subsection (4) above, be discharged from all liability both in respect of acts or omissions of his in the administration and otherwise in relation to his conduct as administrator; but nothing in this section shall prevent the exercise, in relation to a person who has had his release under this section, of the court's powers under section 19 above.

Ascertainment and investigation of company's affairs

Information to be given by administrator

38

• (1) Where an administration order has been made, the administrator shall—

• (a) forthwith send to the company and publish in the prescribed manner a notice of the order ; and

• (b) within twenty-eight days after the making of the order, unless the court otherwise directs, send such a notice to all creditors of the company (so far as he is aware of their addresses).

• (2) Where an administration order has been made, the administrator shall also, within fourteen days after the making of the order, send an office copy of the order to the registrar of companies and to such other persons as may be prescribed.

• (3) If the administrator without reasonable excuse fails to comply with this section, he shall be liable on summary conviction to a fine not exceeding one-fifth of the statutory maximum and, for continued contravention, to a daily default fine not exceeding one-fiftieth of the statutory maximum.

Statement of affairs to be submitted to administrator

39

• (1) Where an administration order has been made, the administrator shall forthwith require some or all of the persons mentioned in subsection (3) below to make out and submit to him a statement in the prescribed form as to the affairs of the company.

• (2) A statement submitted under this section shall be verified by affidavit by the persons required to submit it and shall show—

• (a) particulars of the company's assets, debts and liabilities;

• (b) the names and addresses of its creditors ;

• (c) the securities held by them respectively;

• (d) the dates when the securities were respectively given; and

• (e) such further or other information as may be prescribed.

• (3) The persons referred to in subsection (1) above are—

• (a) those who are or have been officers of the company;

• (b) those who have taken part in the company's formation at any time within one year before the date of the administration order;

• (c) those who are in the company's employment or have been in its employment within that year, and are in the administrator's opinion capable of giving the information required;

• (d) those who are or have been within that year officers of or in the employment of a company which is, or within that year was, an officer of the company ;

and in this subsection " employment" includes employment under a contract for services.

• (4) Where any persons are required under this section to submit a statement of affairs to the administrator, they shall do so (subject to subsection (5) below) before the end of the period of twenty-one days beginning with the day after that on which the prescribed notice of the requirement is given to them by the administrator.

• (5) The administrator, if he thinks fit, may—

• (a) at any time release a person from an obligation imposed on him under subsection (1) or (2) above ; or

• (b) either when giving the notice mentioned in subsection (4) above or subsequently, extend the period so mentioned ;

and where the administrator has refused to exercise a power conferred by this subsection, the court, if it thinks fit, may exercise it.

• (6) If a person without reasonable excuse fails to comply with any obligation imposed under this section, he shall be liable—

• (a) on summary conviction, to a fine not exceeding the statutory maximum and, for continued contravention, to a daily default fine not exceeding one-tenth of the statutory maximum;

• (b) on conviction on indictment, to a fine.

Administrators' proposals

Statement of proposals

40

• (1) Where an administration order has been made, the administrator shall, within three months (or such longer period at the court may allow) after the making of the order—

• (a) send to the registrar of companies and (so far as he is aware of their addresses) to all creditors a statement of his proposals for achieving the purpose or purposes specified in the order; and

• (b) lay a copy of the statement before a meeting of the Company's creditors summoned for the purpose on not less than fourteen days' notice.

• (2) The administrator shall also, within three months (or such longer period as the court may allow after the making of the order, either—

• (a) send a copy of the statement (so far as he is aware of their addresses) to all members of the company ; or

• (b) publish in the prescribed manner a notice stating an address to which members of the company should write for copies of the statement to be sent to them free of charge.

• (3) Subsection (3) of section 38 above applies for the purposes of this section as it applies for the purposes of that section.

Consideration of proposals by creditors' meeting

41

• (1) A meeting of creditors summoned under section 40 above shall decide whether to approve the administrator's proposals.

• (2) Such a meeting may approve the proposals with modifications but shall not do so unless the administrator consents to each modification.

• (3) Subject to subsections (1) and (2) above, a meeting summoned under section 40 above shall be conducted in accordance with the rules.

• (4) After the conclusion in accordance with the rules of a meeting summoned under section 40 above, the administrator shall report the result of the meeting to the court and shall give notice of that result to the registrar of companies and to such persons as may be prescribed.

• (5) If a report is given to the court under subsection (4) above that the meeting has declined to approve the administrator's proposals (with or without modifications), the court may by order discharge the administration order and make such consequential provision as it thinks fit, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order that it thinks fit.

• (6) Where the administration order is discharged, the administrator shall, within fourteen days after the making of the order effecting the discharge, send an office copy of that order to the registrar of companies.

• (7) If the administrator without reasonable excuse fails to comply with subsection (6) above, he shall be liable on summary conviction to a fine not exceeding one-fifth of the statutory maximum and, for continued contravention, to a daily default fine not exceeding one-fiftieth of the statutory maximum.

Approval of substantial revisions

42

• (1) This section applies where—

• (a) proposals have been approved (with or without modifications) under section 41 above ; and

• (b) the administrator proposes to make revisions of those proposals which appear to him substantial.

• (2) The administrator shall—

• (a) send to all creditors of the company (so far as he is aware of their addresses) a statement in the prescribed form of his proposed revisions ; and

• (b) lay a copy of the statement before a meeting of the company's creditors summoned for the purpose on not less than fourteen days' notice ;

and shall not make the proposed revisions unless they are approved by the meeting.

• (3) The administrator shall also either—

• (a) send a copy of the statement (so far as he is aware of their addresses) to all members of the company ; or

• (b) publish in the prescribed manner a notice stating an address to which members of the company should write for copies of the statement to be sent to them free of charge.

• (4) A meeting of creditors summoned under subsection (2) above may approve the proposed revisions with modifications but shall not do so unless the administrator consents to each modification.

• (5) Subject to subsections (2) and (4) above, such a meeting shall be conducted in accordance with the rules.

• (6) After the conclusion in accordance with the rules of a meeting summoned under subsection (2) above, the administrator shall give notice of the result of the meeting to the registrar of companies and to such persons as may be prescribed.

Miscellaneous

Committee of creditors

43

• (1) Where a meeting of creditors summoned under section 40 above has approved the administrator's proposals (with or without modifications), the meeting may, if it thinks fit, establish a committee to exercise the functions conferred on it by or under this Part.

• (2) If such a committee is established, the committee may, on giving not less than seven days' notice, require the administrator to attend before it at any reasonable time and furnish it with such information relating to the carrying out of his functions as it may reasonably require.

Protection of interests of creditors and members

44

• (1) At any time when an administration order is in force, a creditor or member of the company may apply to the court by petition for an order under this section on the ground—

• (a) that the company's affairs, business and property are being or have been managed by the administrator in a manner which is unfairly prejudicial to the interests of its creditors or members generally or of some part of its creditors or members (including at least himself); or

• (b) that any actual or proposed act or omission of the administrator is or would be so prejudicial.

• (2) On an application for an order under this section the court may, subject to subsection (3) below, make such order as it thinks fit for giving relief in respect of the matters complained of, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order that it thinks fit.

• (3) An order under this section shall not prejudice or prevent—

• (a) the implementation of any composition or scheme approved under section 23 above or any compromise or arrangement sanctioned under section 425 of the 1985 Act; or

• (b) where the application for the order was made more than twenty-eight days after the approval of any proposals or revised proposals under section 41 or 42 above, the implementation of those proposals or revised proposals.

• (4) Subject to subsection (3) above, an order under this section may in particular—

• (a) regulate the future management by the administrator of the company's affairs, business and property ;

• (b) require the administrator to refrain from doing or continuing an act complained of by the petitioner or to do an act which the petitioner has complained he has omitted to do;

• (c) require the summoning of a meeting of creditors or members for the purpose of considering such matters as the court may direct;

• (d) discharge the administration order and make such consequential provision as it thinks fit.

• (5) Where the administration order is discharged, the administrator shall, within fourteen days after the making of the order effecting the discharge, send an office copy of that order to the registrar of companies.

• (6) If the administrator without reasonable excuse fails to comply with subsection (5) above, he shall be liable on summary conviction to a fine not exceeding one-fifth of the statutory maximum and, for continued contravention, to a fine not exceeding one-fiftieth of the statutory maximum.

CHAPTER IV — Receivers and Managers (England and Wales)

Preliminary

Preliminary

45

• (1) This Chapter does not apply to receivers appointed under section 467 of the 1985 Act (power to appoint receivers under law of Scotland).

• (2) In this Chapter " administrative receiver " means—

• (a) a receiver or manager of the whole (or substantially the whole) of a company's property appointed by or on behalf of the holders of any debentures of the company secured by a charge which, as created, was a floating charge, or by such a charge and one or more other securities; or

• (b) a person who would be such a receiver or manager but for the appointment of some other person as the receiver of part of the company's property.

Receivers and managers appointed out of court

Appointment of receiver or manager

46

• (1) The appointment of a person as the receiver or manager of a company's property under powers contained in an instrument—

• (a) shall be of no effect unless it is accepted by that person before the end of the business day next following that on which the instrument of appointment is received by him or on his behalf; and

• (b) subject to paragraph (a) above, shall be deemed to be made at the time at which the instrument of appointment is so received.

• (2) This section shall apply to the appointment of two or more persons as joint receivers or managers of a company's property under powers contained in an instrument subject to such modifications as may be prescribed by the rules.

Liability for invalid appointment

47

Where the appointment of a person as the receiver or manager of a company's property under powers contained in an instrument is discovered to be invalid (whether by virtue of the invalidity of the instrument or otherwise), the court may order the person by whom or on whose behalf the appointment was made to indemnify the person appointed against any liability which arises solely by reason of the invalidity of the appointment.

Administrative receivers: general

General powers

48

• (1) The powers conferred on the administrative receiver of a company by the debentures by virtue of which he was appointed shall be deemed to include, except in so far as they are inconsistent with any of the provisons of those debentures, the powers specified in Schedule 3 to this Act; and in the application of that Schedule to the administrative receiver of a company—

• (a) the words " he " and " him " shall be taken to refer to the administrative receiver ; and

• (b) references to the property of the company shall be construed as references to the property of which he is or, but for the appointment of some other person as the receiver of part of the company's property, would be the receiver or manager.

• (2) A person dealing with the administrative receiver of a company in good faith and for value shall not be concerned to inquire whether the administrative receiver is acting within his powers.

Power to dispose of charged property etc.

49

• (1) Where, on an application by the administrative receiver of a company, the court is satisfied that the disposal (with or without other assets) of any relevant property which is subject to a security other than one to which subsection (2) below applies would be likely to promote a more advantageous realisation of the company's assets than would otherwise be effected, the court may by order authorise the administrative receiver to dispose of the property as if it were not subject to the security.

• (2) This subsection applies to—

• (a) any security held by the person by or on whose behalf the administrative receiver was appointed; and

• (b) any security to which a security falling within paragraph (a) above has priority.

• (3) It shall be a condition of an order under this section that—

• (a) the net proceeds of the disposal; and

• (b) where those proceeds are less than such amount as may be determined by the court to be the net amount which would be realised on a sale of the property in the open market by a willing vendor, such sums as may be required to make good the deficiency,

shall be applied towards discharging the sums secured by the security.

• (4) Where a condition imposed in pursuance of subsection (3) above relates to two or more securities, that condition shall require the net proceeds of the disposal and, where paragraph (b) of that subsection applies, the sums mentioned in that paragraph to be applied towards discharging the sums secured by those securities in the order of their priorities.

• (5) An office copy of an order under this section shall, within fourteen days of the making of the order, be sent by the administrative receiver to the registrar of companies.

• (6) If the administrative receiver without reasonable excuse fails to comply with subsection (5) above, he shall be liable on summary conviction to a fine not exceeding one-fifth of the statutory maximum and, for continued contravention, to a daily default fine not exceeding one-fiftieth of the statutory maximum.

• (7) In this section " relevant property ", in relation to the administrative receiver of a company, means the property of which he is or, but for the appointment of some other person as the receiver of part of the company's property, would be the receiver or manager.

Agency and liability for contracts

50

• (1) The administrative receiver of a company—

• (a) shall be deemed to be the agent of the company unless and until the company goes into liquidation ;

• (b) shall be personally liable on any contract entered into by him in the carrying out of his functions (except in so far as the contract otherwise provides) and on any contract of employment adopted by him in the carrying out of those functions ; and

• (c) shall be entitled in respect of that liability to an indemnity out of the assets of the company ;

and for the purposes of paragraph (b) above the administrative receiver is not to be taken to have adopted a contract of employment by reason of anything done or omitted to be done within fourteen days after his appointment.

• (2) This section does not limit any right to indemnity which the administrative receiver would have apart from it, nor limit his liability on contracts entered into or adopted without authority, nor confer any right to indemnity in respect of that liability.

Vacation of office

51

• (1) An administrative receiver of a company may at any time be removed from office by order of the court (but not otherwise) and may resign his office by giving notice of his resignation in the prescribed manner to such persons as may be prescribed.

• (2) An administrative receiver of a company shall vacate office if he ceases to be qualified to act as an insolvency practitioner in relation to the company.

• (3) Where at any time an administrative receiver of a company vacates office—

• (a) his remuneration and any expenses properly incurred by him; and

• (b) any indemnity to which he is entitled out of the assets of the company,

shall be charged on and paid out of any property of the company which is in his custody or under his control at that time in priority to any security held by the person by or on whose behalf he was appointed.

• (4) Where an administrative receiver of a company vacates office otherwise than by death, he shall, within fourteen days after his vacation of office, send a notice to that effect to the registrar of companies.

• (5) If an administrative receiver of a company without reasonable excuse fails to comply with subsection (4) above, he shall be liable on summary conviction to a fine not exceeding one-fifth of the statutory maximum and, for continued contravention, to a daily default fine not exceeding one-fiftieth of the statutory maximum.

Administrative receivers: ascertainment and investigation of company's affairs

Information to be given by administrative receiver

52

• (1) Where an administrative receiver of a company is appointed, the administrative receiver shall—

• (a) forthwith send to the company and publish in the prescribed manner a notice of his appointment; and

• (b) within twenty-eight days after his appointment, unless the court otherwise directs, send such a notice to all the creditors of the company (so far as he is aware of their addresses).

• (2) This section and section 53 below do not apply in relation to the appointment of an administrative receiver to act—

• (a) with an existing administrative receiver ; or

• (b) in place of an administrative receiver dying or ceasing to act,

except that, where they apply to an administrative receiver who dies or ceases to act before they have been fully complied with, the references in this section and section 53 below to the administrative receiver include (subject to subsection (3) below) his successor and any continuing administrative receiver.

• (3) If the company is being wound up, this section and section 53 below apply notwithstanding that the administrative receiver and the liquidator are the same person, but with any necessary modifications arising from that fact.

• (4) If the administrative receiver without reasonable excuse fails to comply with this section, he shall be liable on summary conviction to a fine not exceeding one-fifth of the statutory maximum and, for continued contravention, to a daily default fine not exceeding one-fiftieth of the statutory maximum.

Statement of affairs to be submitted to administrative receiver

53

• (1) Where an administrative receiver of a company is appointed, the administrative receiver shall forthwith require some or all of the persons mentioned in subsection (3) below to make out and submit to him a statement in the prescribed form as to the affairs of the company.

• (2) A statement submitted under this section shall be verified by affidavit by the persons required to submit it and shall show—

• (a) particulars of the company's assets, debts and liabilities;

• (b) the names and addresses of its creditors;

• (c) the securities held by them respectively ;

• (d) the dates when the securities were respectively given; and

• (e) such further or other information as may be prescribed.

• (3) The persons referred to in subsection (1) above are—

• (a) those who are or have been officers of the company ;

• (b) those who have taken part in the company's formation at any time within one year before the date of the appointment of the administrative receiver ;

• (c) those who are in the company's employment, or have been in its employment within that year, and are in the administrative receiver's opinion capable of giving the information required;

• (d) those who are or have been within that year officers of or in the employment of a company which is, or within that year was, an officer of the company ;

and in this subsection " employment" includes employment under a contract for services.

• (4) Where any persons are required under this section to submit a statement of affairs to the administrative receiver, they shall do so (subject to subsection (5) below) before the end of the period of twenty-one days beginning with the day after that on which the prescribed notice of the requirement is given to them by the administrative receiver.

• (5) The administrative receiver, if he thinks fit, may—

• (a) at any time release a person from an obligation imposed on him under subsection (1) or (2) above ; or

• (b) either when giving the notice mentioned in subsection (4) above or subsequently, extend the period so mentioned ;

and where the administrative receiver has refused to exercise a power conferred by this subsection, the court, if it thinks fit, may exercise it.

• (6) If a person without reasonable excuse fails to comply with any obligation imposed under this section, he shall be liable—

• (a) on summary conviction, to a fine not exceeding the statutory maximum and, for continued contravention, to a daily default fine not exceeding one-tenth of the statutory maximum;

• (b) on conviction on indictment, to a fine.

Report by administrative receiver

54

• (1) Where an administrative receiver of a company is appointed, he shall, within three months (or such longer period as the court may allow) after his appointment, send to the registrar of companies, to any trustees for secured creditors of the company and (so far as he is aware of their addresses) to all such creditors a report as to the following matters, namely—

• (a) the events leading up to his appointment, so far as he is aware of them ;