The Insolvency Rules 1986

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

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

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

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

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

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

• (6) Where the court removes the liquidator—

• (a) it shall send copies of the order of removal to him and to the official receiver;

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

• (c) if the court appoints a new liquidator, Rule 4.102 applies.

Removal of liquidator by the court

4.120-CVL

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

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

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

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

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

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

• (6) Where the court removes the liquidator—

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

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

• (c) if the court appoints a new liquidator, Rule 4.103-CVL applies.

Release of resigning or removed liquidator

4.121

(NO CVL APPLICATION)

• (1) Where the liquidator's resignation is accepted by a meeting of creditors which has not resolved against his release, he has his release from when his resignation is effective under Rule 4.109.

• (2) Where the liquidator is removed by a meeting of creditors which has not resolved against his release, the fact of his release shall be stated in the certificate of removal.

• (3) Where—

• (a) the liquidator resigns, and the creditors' meeting called to receive his resignation has resolved against his release, or

• (b) he is removed by a creditors' meeting which has so resolved, or is removed by the court,

he must apply to the Secretary of State for his release.

• (4) When the Secretary of State gives the release, he shall certify it accordingly, and send the certificate to the official receiver, to be filed in court.

• (5) A copy of the certificate shall be sent by the Secretary of State to the former liquidator, whose release is effective from the date of the certificate.

Release of resigning or removed liquidator

4.122-CVL

• (1) Where the liquidator's resignation is accepted by a meeting of creditors which has not resolved against his release, he has his release from when he gives notice of his resignation to the registrar of companies.

• (2) Where the liquidator is removed by a creditors' meeting which has not resolved against his release, the fact of his release shall be stated in the certificate of removal.

• (3) Where—

• (a) the liquidator resigns, and the creditors' meeting called to receive his resignation has resolved against his release, or

• (b) he is removed by a creditors' meeting which has so resolved, or is removed by the court,

he must apply to the Secretary of State for his release.

• (4) When the Secretary of State gives the release, he shall certify it accordingly, and send the certificate to the registrar of companies.

• (5) A copy of the certificate shall be sent by the Secretary of State to the former liquidator, whose release is effective from the date of the certificate.

Removal of liquidator by Secretary of State

4.123

(NO CVL APPLICATION)

• (1) If the Secretary of State decides to remove the liquidator, he shall before doing so notify the liquidator and the official receiver of his decision and the grounds of it, and specify a period within which the liquidator may make representations against implementation of the decision.

• (2) If the Secretary of State directs the removal of the liquidator, he shall forthwith—

• (a) file notice of his decision in court, and

• (b) send notice to the liquidator and the official receiver.

• (3) If the liquidator is removed by direction of the Secretary of State—

• (a) Rule 4.121 applies as regards the liquidator obtaining his release, as if he had been removed by the court, and

• (b) the court may make any such order in his case as it would have power to make if he had been so removed.

SECTION C: RELEASE ON COMPLETION OF ADMINISTRATION

Release of official receiver

4.124

(NO CVL APPLICATION)

• (1) The official receiver shall, before giving notice to the Secretary of State under section 174(3) (that the winding up is for practical purposes complete), send out notice of his intention to do so to all creditors of which he is aware.

• (2) The notice shall in each case be accompanied by a summary of the official receiver's receipts and payments as liquidator.

• (2A) The summary of receipts and payments referred to in paragraph (2) shall also include a statement as to the amount paid to unsecured creditors by virtue of the application of section 176A (prescribed part).

• (3) The Secretary of State, when he has determined the date from which the official receiver is to have his release, shall give notice to the court that he has done so. The notice shall be accompanied by the summary referred to in paragraph (2).

Final meeting

4.125

(NO CVL APPLICATION)

• (1) Where the liquidator is other than the official receiver, he shall give at least 28 days' notice of the final meeting of creditors to be held under section 146. The notice shall be sent to all creditors of which he is aware; and the liquidator shall cause it to be gazetted at least one month before the meeting is to be held.

• (2) The liquidator's report laid before the meeting under that section shall contain an account of the liquidator's administration of the winding up, including—

• (a) a summary of his receipts and payments, and

• (b) a statement by him that he has reconciled his account with that which is held by the Secretary of State in respect of the winding up.

• (2A) The liquidator’s report shall also contain a statement as to the amount paid to unsecured creditors by virtue of the application of section 176A (prescribed part).

• (3) At the final meeting, the creditors may question the liquidator with respect to any matter contained in his report, and may resolve against him having his release.

• (4) The liquidator shall give notice to the court that the final meeting has been held; and the notice shall state whether or not he has been given his release, and be accompanied by a copy of the report laid before the final meeting. A copy of the notice shall be sent by the liquidator to the Secretary of State.

• (5) If there is no quorum present at the final meeting, the liquidator shall report to the court that a final meeting was summoned in accordance with the Rules, but there was no quorum present; and the final meeting is then deemed to have been held, and the creditors not to have resolved against the liquidator having his release.

• (6) If the creditors at the final meeting have not so resolved, the liquidator is released when the notice under paragraph (4) is filed in court. If they have so resolved, the liquidator must obtain his release from the Secretary of State and Rule 4.121 applies accordingly.

Rule as to reporting

4.125A

• (1) The court may, on the liquidator or official receiver’s application, relieve him of any duty imposed on him by Rule 4.124 or 4.125, or authorise him to carry out the duty in a way other than there required.

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

Final meeting

4.126-CVL

• (1) The liquidator shall give at least 28 days' notice of the final meeting of creditors to be held under section 106. The notice shall be sent to all creditors who have proved their debts.

• (2) At the final meeting, the creditors may question the liquidator with respect to any matter contained in the account required under the section or paragraph (4) of this Rule, and may resolve against the liquidator having his release.

• (3) Where the creditors have so resolved, he must obtain his release from the Secretary of State; and Rule 4.122-CVL applies accordingly.

• (4) The account of the winding up required under section 106 shall also include a statement as to the amount paid to unsecured creditors by virtue of the application of section 176A (prescribed part).

SECTION D: REMUNERATION

Fixing of remuneration

4.127

• (1) The liquidator is entitled to receive remuneration for his services as such.

• (2) The remuneration shall be fixed either—

• (a) as a percentage of the value of the assets which are realised or distributed, or of the one value and the other in combination, or

• (b) by reference to the time properly given by the insolvency practitioner (as liquidator) and his staff in attending to matters arising in the winding up.

• (3) Where the liquidator is other than the official receiver, it is for the liquidation committee (if there is one) to determine whether the remuneration is to be fixed under paragraph (2)(a) or (b) and, if under paragraph (2)(a), to determine any percentage to be applied as there mentioned.

• (4) In arriving at that determination, the committee shall have regard to the following matters—

• (a) the complexity (or otherwise) of the case,

• (b) any respects in which, in connection with the winding up, there falls on the insolvency practitioner (as liquidator) any responsibility of an exceptional kind or degree,

• (c) the effectiveness with which the insolvency practitioner appears to be carrying out, or to have carried out, his duties as liquidator, and

• (d) the value and nature of the assets with which the liquidator has to deal.

• (5) If there is no liquidation committee, or the committee does not make the requisite determination, the liquidator's remuneration may be fixed (in accordance with paragraph (2)) by a resolution of a meeting of creditors; and paragraph (4) applies to them as it does to the liquidation committee.

• (6) Where the liquidator is not the official receiver and his remuneration is not fixed as above, the liquidator shall be entitled to remuneration fixed in accordance with the provisions of Rule 4.127A.

Liquidator’s entitlement to remuneration where it is not fixed under Rule 4.127

4.127A

• (1) This Rule applies where the liquidator is not the official receiver and his remuneration is not fixed in accordance with Rule 4.127.

• (2) The liquidator shall be entitled by way of remuneration for his services as such, to such sum as is arrived at by—

• (a) first applying the realisation scale set out in Schedule 6 to the monies received by him from the realisation of the assets of the company (including any Value Added Tax thereon but after deducting any sums paid to secured creditors in respect of their securities and any sums spent out of money received in carrying on the business of the company); and

• (b) then by adding to the sum arrived at under sub-paragraph (a) such sum as is arrived at by applying the distribution scale set out in Schedule 6 to the value of assets distributed to creditors of the company (including payments made in respect of preferential debts) and to contributories.

Liquidator’s remuneration where he realises assets on behalf of chargeholder

4.127B

• (1) This Rule applies where the liquidator is not the official receiver and realises assets on behalf of a secured creditor.

• (2) Where the assets realised for a secured creditor are subject to a charge which when created was a mortgage or a fixed charge, the liquidator shall be entitled to such sum by way of remuneration as is arrived at by applying the realisation scale set out in Schedule 6 to the monies received by him in respect of the assets realised (including any sums received in respect of Value Added Tax thereon but after deducting any sums spent out of money received in carrying on the business of the company).

• (3) Where the assets realised for a secured creditor are subject to a charge which when created was a floating charge, the liquidator shall be entitled to such sum by way of remuneration as is arrived at by—

• (a) first applying the realisation scale set out in Schedule 6 to monies received by him from the realisation of those assets (including any Value Added Tax thereon but ignoring any sums received which are spent in carrying on the business of the company); and

• (b) then by adding to the sum arrived at under sub-paragraph (a) such sum as is arrived at by applying the distribution scale set out in Schedule 6 to the value of the assets distributed to the holder of the charge and payments made in respect of preferential debts.

Other matters affecting remuneration

4.128

• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) Where there are joint liquidators, it is for them to agree between themselves as to how the remuneration payable should be apportioned. Any dispute arising between them may be referred—

• (a) to the court, for settlement by order, or

• (b) to the liquidation committee or a meeting of creditors, for settlement by resolution.

• (3) If the liquidator is a solicitor and employs his own firm, or any partner in it, to act on behalf of the company, profit costs shall not be paid unless this is authorised by the liquidation committee, the creditors or the court.

Recourse of liquidator to meeting of creditors

4.129

If the liquidator's remuneration has been fixed by the liquidation committee, and he considers the rate or amount to be insufficient, he may request that it be increased by resolution of the creditors.

Recourse to the court

4.130

• (1) If the liquidator considers that the remuneration fixed for him by the liquidation committee, or by resolution of the creditors, or as under Rule 4.127(6), is insufficient, he may apply to the court for an order increasing its amount or rate.

• (2) The liquidator shall give at least 14 days' notice of his 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 his application shall 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 costs of the liquidator's application, including the costs of any member of the liquidation committee appearing or being represented on it, or any creditor so appearing or being represented, to be paid out of the assets.

Creditors' claim that remuneration is excessive

4.131

• (1) Any creditor of the company may, with the concurrence of at least 25 per cent. in value of the creditors (including himself), apply to the court for an order that the liquidator's remuneration be reduced, on the grounds that it is, in all the circumstances, excessive.

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

If the application is not dismissed under this paragraph, the court shall fix a venue for it to be heard, and give notice to the applicant accordingly.

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

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

• (5) Unless the court orders otherwise, the costs of the application shall be paid by the applicant, and are not payable out of the assets.

SECTION E: SUPPLEMENTARY PROVISIONS

Liquidator deceased

4.132

(NO CVL APPLICATION)

• (1) Subject as follows, where the liquidator (other than the official receiver) has died, it is the duty of his personal representatives to give notice of the fact to the official receiver, specifying the date of the death.

This does not apply if notice has been given under any of the following paragraphs of this Rule.

• (2) If the deceased liquidator was a partner in a firm, notice may be given to the official receiver by a partner in the firm who is qualified to act as an insolvency practitioner, or is a member of any body recognised by the Secretary of State for the authorisation of insolvency practitioners.

• (3) Notice of the death may be given by any person producing to the official receiver the relevant death certificate or a copy of it.

• (4) The official receiver shall give notice to the court, for the purpose of fixing the date of the deceased liquidator's release.

Liquidator deceased

4.133-CVL

• (1) Subject as follows, where the liquidator has died, it is the duty of his personal representatives to give notice of the fact, and of the date of death, to the registrar of companies and to the liquidation committee (if any) or a member of that committee.

• (2) In the alternative, notice of the death may be given—

• (a) if the deceased liquidator was a partner in a firm, by a partner qualified to act as an insolvency practitioner or who is a member of any body approved by the Secretary of State for the authorisation of insolvency practitioners, or

• (b) by any person, if he delivers with the notice a copy of the relevant death certificate.

Loss of qualification as insolvency practitioner

4.134

(NO CVL APPLICATION)

• (1) This Rule applies where the liquidator vacates office on ceasing to be qualified to act as an insolvency practitioner in relation to the company.

• (2) He shall forthwith give notice of his doing so to the official receiver, who shall give notice to the Secretary of State.

The official receiver shall file in court a copy of his notice under this paragraph.

• (3) Rule 4.121 applies as regards the liquidator obtaining his release, as if he had been removed by the court.

Loss of qualification as insolvency practitioner

4.135-CVL

• (1) This Rule applies where the liquidator vacates office on ceasing to be qualified to act as an insolvency practitioner in relation to the company.

• (2) He shall forthwith give notice of his doing so to the registrar of companies and the Secretary of State.

• (3) Rule 4.122-CVL applies as regards the liquidator obtaining his release, as if he had been removed by the court.

Vacation of office on making of winding-up order

4.136-CVL

Where the liquidator vacates office in consequence of the court making a winding-up order against the company, Rule 4.122-CVL applies as regards his obtaining his release, as if he had been removed by the court.

Notice to official receiver of intention to vacate office (NO CVL APPLICATION)

4.137

• (1) Where the liquidator intends to vacate office, whether by resignation or otherwise, he shall give notice of his intention to the official receiver together with notice of any creditors' meeting to be held in respect of his vacation of office, including any meeting to receive his resignation.

• (2) The notice to the official receiver must be given at least 21 days before any such creditors' meeting.

• (3) Where there remains any property of the company which has not been realised, applied, distributed or otherwise fully dealt with in the winding up, the liquidator shall include in his notice to the official receiver details of the nature of that property, its value (or the fact that it has no value), its location, any action taken by the liquidator to deal with that property or any reason for his not dealing with it, and the current position in relation to it.

Liquidator's duties on vacating office

4.138

• (1) Where the liquidator ceases to be in office as such, in consequence of removal, resignation or cesser of qualification as an insolvency practitioner, he is under obligation forthwith to deliver up to the person succeeding him as liquidator the assets (after deduction of any expenses properly incurred, and distributions made, by him) and further to deliver up to that person—

• (a) the records of the liquidation, including correspondence, proofs and other related papers appertaining to the administration while it was within his responsibility, and

• (b) the company's books, papers and other records.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) Where the liquidator vacates office under section 172(8) (final meeting of creditors), he shall deliver up to the official receiver the company’s books, papers and other records which have not already been disposed of in accordance with general regulations in the course of the liquidation. (NO CVL APPLICATION)

SECTION F: THE LIQUIDATOR IN A MEMBERS' VOLUNTARY WINDING UP

Appointment by the company

4.139

• (1) This Rule applies where the liquidator is appointed by a meeting of the company.

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

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

• (4) Not later than 28 days from his appointment, the liquidator shall give notice of it to all creditors of the company of whom he is aware in that period.

Appointment by the court

4.140

• (1) This Rule applies where the liquidator is appointed by the court under section 108.

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

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

• (4) Not later than 28 days from his appointment, the liquidator shall give notice of it to all creditors of the company of whom he is aware in that period.

Authentication of liquidator's appointment

4.141

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

Company meeting to receive liquidator's resignation

4.142

• (1) Before resigning his office, the liquidator must call a meeting of the company for the purpose of receiving his resignation. The notice summoning the meeting shall indicate that this is the purpose, or one of the purposes, of it.

• (2) The notice under paragraph (1) must be accompanied by an account of the liquidator's administration of the winding up, including—

• (a) a summary of his receipts and payments, and

• (b) a statement by him that he has reconciled his account with that which is held by the Secretary of State in respect of the winding up.

• (3) Subject as follows, the liquidator may only proceed under this Rule on grounds of ill health or because—

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

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

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

• (4A) If there is no quorum present at the meeting summoned to receive the liquidator’s resignation, the meeting is deemed to have been held.

• (5) The notice of the liquidator's resignation required by section 171(5) shall be given by him forthwith after the meeting.

• (6) Where a new liquidator is appointed in place of one who has resigned, the former shall, in giving notice of his appointment, state that his predecessor has resigned.

Removal of liquidator by the court

4.143

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

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

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

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

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

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

• (5) Where the court removes the liquidator—

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

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

• (c) if the court appoints a new liquidator, Rule 4.140 applies.

Release of resigning or removed liquidator

4.144

• (1) Where the liquidator resigns, he has his release from the date on which he gives notice of his resignation to the registrar of companies.

• (2) Where the liquidator is removed by a meeting of the company, he shall forthwith give notice to the registrar of companies of his ceasing to act.

• (3) Where the liquidator is removed by the court, he must apply to the Secretary of State for his release.

• (4) When the Secretary of State gives the release, he shall certify it accordingly, and send the certificate to the registrar of companies.

• (5) A copy of the certificate shall be sent by the Secretary of State to the former liquidator, whose release is effective from the date of the certificate.

Liquidator deceased

4.145

• (1) Subject as follows, where the liquidator has died, it is the duty of his personal representatives to give notice of the fact, and of the date of death, to the company's directors, or any one of them, and to the registrar of companies.

• (2) In the alternative, notice of the death may be given—

• (a) if the deceased liquidator was a partner in a firm, by a partner qualified to act as an insolvency practitioner or who is a member of any body approved by the Secretary of State for the authorisation of insolvency practitioners, or

• (b) by any person, if he delivers with the notice a copy of the relevant death certificate.

Loss of qualification as insolvency practitioner

4.146

• (1) This Rule applies where the liquidator vacates office on ceasing to be qualified to act as an insolvency practitioner in relation to the company.

• (2) He shall forthwith give notice of his doing so to the registrar of companies and the Secretary of State.

• (3) Rule 4.144 applies as regards the liquidator obtaining his release, as if he had been removed by the court.

Vacation of office on making of winding-up order

4.147

Where the liquidator vacates office in consequence of the court making a winding-up order against the company, Rule 4.144 applies as regards his obtaining his release, as if he had been removed by the court.

Liquidator's duties on vacating office

4.148

Where the liquidator ceases to be in office as such, in consequence of removal, resignation or cesser of qualification as an insolvency practitioner, he is under obligation forthwith to deliver up to the person succeeding him as liquidator the assets (after deduction of any expenses properly incurred, and distributions made, by him) and further to deliver up to that person—

• (a) the records of the liquidation, including correspondence, proofs and other related papers appertaining to the administration while it was within his responsibility, and

• (b) the company's books, papers and other records.

Remuneration of liquidator in members' voluntary winding up

4.148A

• (1) The liquidator is entitled to receive remuneration for his services as such.

• (2) The remuneration shall be fixed either—

• (a) as a percentage of the value of the assets which are realised or distributed, or of the one value and the other in combination, or

• (b) by reference to the time properly given by the insolvency practitioner (as liquidator) and his staff in attending to matters arising in the winding up;

and the company in general meeting shall determine whether the remuneration is to be fixed under subparagraph (a) or (b) and, if under subparagraph (a), the percentage to be applied as there mentioned.

• (3) In arriving at that determination the company in general meeting shall have regard to the matters set out in paragraph (4) of Rule 4.127.

• (4) Where the liquidator’s remuneration is not fixed as above, the liquidator shall be entitled to remuneration calculated in accordance with the provisions of Rule 4.148B.

• (5) Rule 4.128 and Rule 4.127B shall apply in relation to the remuneration of the liquidator in respect of the matters there mentioned and for this purpose references in that Rule to “the liquidation committee” and “a meeting of creditors” shall be read as references to the company in general meeting.

• (6) If the liquidator considers that the remuneration fixed for him by the company in general meeting, or as under paragraph (4), is insufficient, he may apply to the court for an order increasing its amount or rate.

• (7) The liquidator shall give at least 14 days' notice of an application under paragraph (6) to the company’s contributories, or such one or more of them as the court may direct, and the contributories may nominate any one or more of their number to appear or be represented.

• (8) The court may, if it appears to be a proper case, order the costs of the liquidator’s application, including the costs of any contributory appearing or being represented on it, to be paid out of the assets.

Liquidator’s remuneration in members' voluntary liquidation where it is not fixed under Rule 4.148A

4.148B

• (1) This Rule applies where the liquidator’s remuneration is not fixed in accordance with Rule 4.148A.

• (2) The liquidator shall be entitled by way of remuneration for his services as such, to such sum as is arrived at by—

• (a) first applying the realisation scale set out in Schedule 6 to the monies received by him from the realisation of the assets of the company (including any Value Added Tax thereon but after deducting any sums paid to secured creditors in respect of their securities and any sums spent out of money received in carrying on the business of the company); and

• (b) then by adding to the sum arrived at under sub-paragraph (a) such sum as is arrived at by applying the distribution scale set out in Schedule 6 to the value of assets distributed to creditors of the company (including payments made in respect of preferential debts) and to contributories.

SECTION G: RULES APPLYING IN EVERY WINDING UP, WHETHER VOLUNTARY OR BY THE COURT

Power of court to set aside certain transactions

4.149

• (1) If in the administration of the estate the liquidator enters into any transaction with a person who is an associate of his, the court may, on the application of any person interested, set the transaction aside and order the liquidator to compensate the company for any loss suffered in consequence of it.

• (2) This does not apply if either—

• (a) the transaction was entered into with the prior consent of the court, or

• (b) it is shown to the court's satisfaction that the transaction was for value, and that it was entered into by the liquidator without knowing, or having any reason to suppose, that the person concerned was an associate.

• (3) Nothing in this Rule is to be taken as prejudicing the operation of any rule of law or equity with respect to a liquidator's dealings with trust property, or the fiduciary obligations of any person.

Rule against solicitation

4.150

• (1) Where the court is satisfied that any improper solicitation has been used by or on behalf of the liquidator in obtaining proxies or procuring his appointment, it may order that no remuneration out of the assets be allowed to any person by whom, or on whose behalf, the solicitation was exercised.

• (2) An order of the court under this Rule overrides any resolution of the liquidation committee or the creditors, or any other provision of the Rules relating to the liquidator's remuneration.

CHAPTER 12 — THE LIQUIDATION COMMITTEE

Preliminary

4.151

(NO CVL APPLICATION)

Membership of committee

4.152

• (1) Subject to Rule 4.154 below, the liquidation committee shall consist as follows—

• (a) in any case of at least 3, and not more than 5, creditors of the company elected by the meeting of creditors held under section 141 of the Act, and

• (b) also, in the case of a solvent winding up, where the contributories' meeting held under that section so decides, of up to 3 contributories, elected by that meeting.

(NO CVL APPLICATION)

• (2-CVL) The committee must have at least 3 members before it can be established.

• (3) Any creditor of the company (other than one whose debt is fully secured) is eligible to be a member of the committee, so long as—

• (a) he has lodged a proof of his debt, and

• (b) his proof has neither been wholly disallowed for voting purposes, nor wholly rejected for purposes of distribution or dividend.

• (4) No person can be a member as both a creditor and a contributory.

• (5) A body corporate may be a member of the committee, but it cannot act as such otherwise than by a representative appointed under Rule 4.159.

• (6) Members of the committee elected or appointed to represent the creditors are called “creditor members”; and those elected or appointed to represent the contributories are called “contributory members”.

• (7) The following categories of person are to be regarded as additional creditor members—

• (a) a representative of the Financial Services Authority who exercises the right under section 371(4)(b) of the Financial Services and Markets Act 2000 to be a member of the committee;

• (b) a representative of the scheme manager who exercises the right under section 215(4) of that Act to be a member of the committee.

Formalities of establishment

4.153

• (1) The liquidation committee does not come into being, and accordingly cannot act, until the liquidator has issued a certificate of its due constitution.

• (2) If the chairman of the meeting which resolves to establish the committee is not the liquidator, he shall forthwith give notice of the resolution to the liquidator (or, as the case may be, the person appointed as liquidator by that same meeting), and inform him of the names and addresses of the persons elected to be members of the committee.

• (3) No person may act as a member of the committee unless and until he has agreed to do so and, unless the relevant proxy or authorisation contains a statement to the contrary, such agreement may be given by his proxy-holder or representative under section 375 of the Companies Act present at the meeting establishing the committee.

• (3A) The liquidator’s certificate of the committee’s due constitution shall not issue before the minimum number of persons (in accordance with Rule 4.152) who are to be members of the committee have agreed to act.

• (4) As and when the others (if any) agree to act, the liquidator shall issue an amended certificate.

• (5) The certificate, and any amended certificate, shall be filed in court by the liquidator.

(NO CVL APPLICATION)

• (6-CVL) The certificate, and any amended certificate, shall be sent by the liquidator to the registrar of companies.

• (7) If after the first establishment of the committee there is any change in its membership, the liquidator shall report the change to the court. (NO CVL APPLICATION)

• (8-CVL) If after the first establishment of the committee there is any change in its membership, the liquidator shall report the change to the registrar of companies.

Committee established by contributories

4.154

(NO CVL APPLICATION)

• (1) The following applies where the creditors' meeting under section 141 does not decide that a liquidation committee should be established, or decides that a committee should not be established.

• (2) The meeting of contributories under that section may appoint one of their number to make application to the court for an order to the liquidator that a further creditors' meeting be summoned for the purpose of establishing a liquidation committee; and—

• (a) the court may, if it thinks that there are special circumstances to justify it, make that order, and

• (b) the creditors' meeting summoned by the liquidator in compliance with the order is deemed to have been summoned under section 141.

• (3) If the creditors' meeting so summoned does not establish a liquidation committee, a meeting of contributories may do so.

• (4) The committee shall then consist of at least 3, and not more than 5, contributories elected by that meeting; and Rule 4.153 applies, substituting for the reference in paragraph (3) of that Rule to Rule 4.152 a reference to this paragraph.

Obligations of liquidator to committee

4.155

• (1) Subject as follows, it is the duty of the liquidator to report to the members of the liquidation committee all such matters as appear to him to be, or as they have indicated to him as being, of concern to them with respect to the winding up.

• (2) In the case of matters so indicated to him by the committee, the liquidator need not comply with any request for information where it appears to him that—

• (a) the request is frivolous or unreasonable, or

• (b) the cost of complying would be excessive, having regard to the relative importance of the information, or

• (c) there are not sufficient assets to enable him to comply.

• (3) Where the committee has come into being more than 28 days after the appointment of the liquidator, he shall report to them, in summary form, what actions he has taken since his appointment, and shall answer all such questions as they may put to him regarding his conduct of the winding up hitherto.

• (4) A person who becomes a member of the committee at any time after its first establishment is not entitled to require a report to him by the liquidator, otherwise than in summary form, of any matters previously arising.

• (5) Nothing in this Rule disentitles the committee, or any member of it, from having access to the liquidator's records of the liquidation, or from seeking an explanation of any matter within the committee's responsibility.

Meetings of the committee

4.156

• (1) Subject as follows, meetings of the liquidation committee shall be held when and where determined by the liquidator.

• (2) The liquidator shall call a first meeting of the committee to take place within 3 months of his appointment or of the committee's establishment (whichever is the later); and thereafter he shall call a meeting—

• (a) if so requested by a creditor member of the committee or his representative (the meeting then to be held within 21 days of the request being received by the liquidator), and

• (b) for a specified date, if the committee has previously resolved that a meeting be held on that date.

• (3) The liquidator shall give 7 days' written notice of the venue of a meeting to every member of the committee (or his representative, if designated for that purpose), unless in any case the requirement of the notice has been waived by or on behalf of any member.

Waiver may be signified either at or before the meeting.

The chairman at meetings

4.157

• (1) The chairman at any meeting of the liquidation committee shall be the liquidator, or a person nominated by him to act.

• (2) A person so nominated must be either—

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

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

Quorum

4.158

• (1) A meeting of the committee is duly constituted if due notice of it has been given to all the members, and at least 2 creditor members are present or represented.

(NO CVL APPLICATION)

• (2-CVL) A meeting of the committee is duly constituted if due notice of it has been given to all the members, and at least 2 members are present or represented.

Committee-members' representatives

4.159

• (1) A member of the liquidation committee may, in relation to the business of the committee, be represented by another person duly authorised by him for that purpose.

• (2) A person acting as a committee-member's representative must hold a letter of authority entitling him so to act (either generally or specially) and signed by or on behalf of the committee-member , and for this purpose any proxy or any authorisation under section 375 of the Companies Act in relation to any meeting of creditors (or, as the case may be, members or contributories) of the company shall, unless it contains a statement to the contrary, be treated as such a letter of authority to act generally signed by or on behalf of the committee-member.

• (3) The chairman at any meeting of the committee may call on a person claiming to act as a committee-member's representative to produce his letter of authority, and may exclude him if it appears that his authority is deficient.

• (4) No member may be represented by a body corporate, or by a person who is an undischarged bankrupt or a disqualified director, or is subject to a bankruptcy restrictions order, bankruptcy restrictions undertaking or an interim bankruptcy restrictions order.

• (5) No person shall—

• (a) on the same committee, act at one and the same time as representative of more than one committee-member, or

• (b) act both as a member of the committee and as representative of another member.

• (6) Where a member's representative signs any document on the member's behalf, the fact that he so signs must be stated below his signature.

Resignation

4.160

A member of the liquidation committee may resign by notice in writing delivered to the liquidator.

Termination of membership

4.161

• (1) A person's membership of the liquidation committee is automatically terminated if—

• (a) he becomes bankrupt ..., or

• (b) at 3 consecutive meetings of the committee he is neither present nor represented (unless at the third of those meetings it is resolved that this Rule is not to apply in his case).

• (2) However, if the cause of termination is the member's bankruptcy, his trustee in bankruptcy replaces him as a member of the committee.

• (3) The membership of a creditor member is also automatically terminated if he ceases to be, or is found never to have been, a creditor.

Removal

4.162

• (1) A creditor member of the committee may be removed by resolution at a meeting of creditors; and a contributory member may be removed by a resolution of a meeting of contributories.

• (2) In either case, 14 days' notice must be given of the intention to move the resolution.

Vacancy (creditor members)

4.163

• (1) The following applies if there is a vacancy among the creditor members of the committee.

• (2) The vacancy need not be filled if the liquidator and a majority of the remaining creditor members so agree, provided that the total number of members does not fall below the minimum required by Rule 4.152.

• (3) The liquidator may appoint any creditor (being qualified under the Rules to be a member of the committee) to fill the vacancy, if a majority of the other creditor members agree to the appointment, and the creditor concerned consents to act.

• (4) Alternatively, a meeting of creditors may resolve that a creditor be appointed (with his consent) to fill the vacancy. In this case, at least 14 days' notice must have been given of the resolution to make such an appointment (whether or not of a person named in the notice).

• (5) Where the vacancy is filled by an appointment made by a creditors' meeting at which the liquidator is not present, the chairman of the meeting shall report to the liquidator the appointment which has been made.

Vacancy (contributory members)

4.164

• (1) The following applies if there is a vacancy among the contributory members of the committee.

• (2) The vacancy need not be filled if the liquidator and a majority of the remaining contributory members so agree, provided that, in the case of a committee of contributory members only, the total number of members does not fall below the minimum required by Rule 4.154(4) or, as the case may be, 4.171(5).

• (3) The liquidator may appoint any contributory member (being qualified under the Rules to be a member of the committee) to fill the vacancy, if a majority of the other contributory members agree to the appointment, and the contributory concerned consents to act.

• (4) Alternatively, a meeting of contributories may resolve that a contributory be appointed (with his consent) to fill the vacancy. In this case, at least 14 days' notice must have been given of the resolution to make such an appointment (whether or not of a person named in the notice).

• (5-CVL) Where the contributories make an appointment under paragraph (4), the creditor members of the committee may, if they think fit, resolve that the person appointed ought not to be a member of the committee; and—

• (a) that person is not then, unless the court otherwise directs, qualified to act as a member of the committee, and

• (b) on any application to the court for a direction under this paragraph the court may, if it thinks fit, appoint another person (being a contributory) to fill the vacancy on the committee.

• (6) Where the vacancy is filled by an appointment made by a contributories' meeting at which the liquidator is not present, the chairman of the meeting shall report to the liquidator the appointment which has been made.

Voting rights and resolutions

4.165

(NO CVL APPLICATION)

• (1) At any meeting of the committee, each member of it (whether present himself, or by his representative) has one vote; and a resolution is passed when a majority of the creditor members present or represented have voted in favour of it.

• (2) Subject to the next paragraph, the votes of contributory members do not count towards the number required for passing a resolution, but the way in which they vote on any resolution shall be recorded.

• (3) Paragraph (2) does not apply where, by virtue of Rule 4.154 or 4.171, the only members of the committee are contributories. In that case the committee is to be treated for voting purposes as if all its members were creditors.

• (4) Every resolution passed shall be recorded in writing, either separately or as part of the minutes of the meeting. The record shall be signed by the chairman and kept with the records of the liquidation.

Voting rights and resolutions

4.166-CVL

• (1) At any meeting of the committee, each member of it (whether present himself, or by his representative) has one vote; and a resolution is passed when a majority of the members present or represented have voted in favour of it.

• (2) Every resolution passed shall be recorded in writing, either separately or as part of the minutes of the meeting. The record shall be signed by the chairman and kept with the records of the liquidation.

Resolutions by post

4.167

• (1) In accordance with this Rule, the liquidator may seek to obtain the agreement of members of the liquidation committee to a resolution by sending to every member (or his representative designated for the purpose) a copy of the proposed resolution.

• (2) Where the liquidator makes use of the procedure allowed by this Rule, he shall send out to members of the committee or their representatives (as the case may be) a copy of any proposed resolution on which a decision is sought, which shall be set out in such a way that agreement with or dissent from each separate resolution may be indicated by the recipient on the copy so sent.

• (3) Any creditor member of the committee may, within 7 business days from the date of the liquidator sending out a resolution, require him to summon a meeting of the committee to consider the matters raised by the resolution. (NO CVL APPLICATION)

• (4-CVL) Any member of the committee may, within 7 business days from the date of the liquidator sending out a resolution, require him to summon a meeting of the committee to consider the matters raised by the resolution.

• (5) In the absence of such a request, the resolution is deemed to have been passed by the committee if and when the liquidator is notified in writing by a majority of the creditor members that they concur with it. (NO CVL APPLICATION)

• (6-CVL) In the absence of such a request, the resolution is deemed to have been passed by the committee if and when the liquidator is notified in writing by a majority of the members that they concur with it.

• (7) A copy of every resolution passed under this Rule, and a note that the committee's concurrence was obtained, shall be kept with the records of the liquidation.

Liquidator's reports

4.168

• (1) The liquidator shall, as and when directed by the liquidation committee (but not more often than once in any period of 2 months), send a written report to every member of the committee setting out the position generally as regards the progress of the winding up and matters arising in connection with it, to which he (the liquidator) considers the committee's attention should be drawn.

• (2) In the absence of such directions by the committee, the liquidator shall send such a report not less often than once in every period of 6 months.

• (3) The obligations of the liquidator under this Rule are without prejudice to those imposed by Rule 4.155.

Expenses of members, etc

4.169

The liquidator shall defray out of the assets, in the prescribed order of priority, any reasonable travelling expenses directly incurred by members of the liquidation committee or their representatives in respect of their attendance at the committee's meetings, or otherwise on the committee's business.

Dealings by committee-members and others

4.170

• (1) This Rule applies to—

• (a) any member of the liquidation committee,

• (b) any committee-member's representative,

• (c) any person who is an associate of a member of the committee or a committee-member's representative, and

• (d) any person who has been a member of the committee at any time in the last 12 months.

• (2) Subject as follows, a person to whom this Rule applies shall not enter into any transaction whereby he—

• (a) receives out of the company's assets any payment for services given or goods supplied in connection with the administration, or

• (b) obtains any profit from the administration, or

• (c) acquires any asset forming part of the estate.

• (3) Such a transaction may be entered into by a person to whom this Rule applies—

• (a) with the prior leave of the court, or

• (b) if he does so as a matter of urgency, or by way of performance of a contract in force before the date on which the company went into liquidation, and obtains the court's leave for the transaction, having applied for it without undue delay, or

• (c) with the prior sanction of the liquidation committee, where it is satisfied (after full disclosure of the circumstances) that the person will be giving full value in the transaction.

• (4) Where in the committee a resolution is proposed that sanction be accorded for a transaction to be entered into which, without that sanction or the leave of the court, would be in contravention of this Rule, no member of the committee, and no representative of a member, shall vote if he is to participate directly or indirectly in the transaction.

• (5) The court may, on the application of any person interested—

• (a) set aside a transaction on the ground that it has been entered into in contravention of this Rule, and

• (b) make with respect to it such other order as it thinks fit, including (subject to the following paragraph) an order requiring a person to whom this Rule applies to account for any profit obtained from the transaction and compensate the estate for any resultant loss.

• (6) In the case of a person to whom this Rule applies as an associate of a member of the committee or of a committee-member's representative, the court shall not make any order under paragraph (5), if satisfied that he entered into the relevant transaction without having any reason to suppose that in doing so he would contravene this Rule.

• (7) The costs of an application to the court for leave under this Rule are not payable out of the assets, unless the court so orders.

Composition of committee when creditors paid in full

4.171

• (1) This Rule applies if the liquidator issues a certificate that the creditors have been paid in full, with interest in accordance with section 189.

• (2) The liquidator shall forthwith file the certificate in court. (NO CVL APPLICATION)

• (3-CVL) The liquidator shall forthwith send a copy of the certificate to the registrar of companies.

• (4) The creditor members of the liquidation committee cease to be members of the committee.

• (5) The committee continues in being unless and until abolished by decision of a meeting of contributories, and (subject to the next paragraph) so long as it consists of at least 3 contributory members.

• (6) The committee does not cease to exist on account of the number of contributory members falling below 3, unless and until 28 days have elapsed since the issue of the liquidator's certificate under paragraph (1).

But at any time when the committee consists of less than 3 contributory members, it is suspended and cannot act.

• (7) Contributories may be co-opted by the liquidator, or appointed by a contributories' meeting, to be members of the committee; but the maximum number of members is 5.

• (8) The foregoing Rules in this Chapter continue to apply to the liquidation committee (with any necessary modifications) as if all the members of the committee were creditor members.

Committee's functions vested in Secretary of State

4.172

(NO CVL APPLICATION)

• (1) At any time when the functions of the liquidation committee are vested in the Secretary of State under section 141(4) or (5), requirements of the Act or the Rules about notices to be given, or reports to be made, to the committee by the liquidator do not apply, otherwise than as enabling the committee to require a report as to any matter.

• (2) Where the committee's functions are so vested under section 141(5), they may be exercised by the official receiver.

Formal defects

4.172A

The acts of the liquidation committee established for any winding up are valid notwithstanding any defect in the appointment, election or qualifications of any member of the committee or any committee-member’s representative or in the formalities of its establishment.

CHAPTER 13 — THE LIQUIDATION COMMITTEE WHERE WINDING UP FOLLOWS IMMEDIATELY ON ADMINISTRATION (NO CVL APPLICATION)

Preliminary

4.173

• (1) The Rules in this Chapter apply where—

• (a) the winding-up order has been made by the court upon an application under paragraph 79 of Schedule B1 to the Act, and

• (b) the court makes an order under section 140(1) of the Act appointing as liquidator the person who was previously the administrator.

• (2) In this Chapter, “insolvent winding up”, “solvent winding up”, “creditor member” and “contributory member” mean the same as in Chapter 12.

Continuation of creditors' committee

4.174

• (1) If under paragraph 57 of Schedule B1 to the Act a creditors' committee has been established for the purposes of the administration, then (subject as follows in this Chapter) that committee continues in being as the liquidation committee for the purposes of the winding up, and—

• (a) it is deemed to be a committee established as such under section 141, and

• (b) no action shall be taken under subsection (1) to (3) of that section to establish any other.

• (2) This Rule does not apply if, at the time when the court's order under section 140(1) is made, the committee under paragraph 57 of Schedule B1 to the Act consists of less than 3 members; and a creditor who was, immediately before that date, a member of it, ceases to be a member on the making of the order if his debt is fully secured.

Membership of committee

4.175

• (1) Subject as follows, the liquidation committee shall consist of at least 3, and not more than 5, creditors of the company, elected by the creditors' meeting held under paragraph 57 of Schedule B1 to the Act or (in order to make up numbers or fill vacancies) by a creditors' meeting summoned by the liquidator after the company goes into liquidation.

• (2) In the case of a solvent winding up, the liquidator shall, on not less than 21 days' notice, summon a meeting of contributories, in order to elect (if it so wishes) contributory members of the liquidation committee, up to 3 in number.

Liquidator's certificate

4.176

• (1) The liquidator shall issue a certificate of the liquidation committee's continuance, specifying the person who are, or are to be, members of it.

• (2) It shall be stated in the certificate whether or not the liquidator has summoned a meeting of contributories under Rule 4.175(2), and whether (if so) the meeting has elected contributories to be members of the committee.

• (3) Pending the issue of the liquidator's certificate, the committee is suspended and cannot act.

• (4) No person may act, or continue to act, as a member of the committee unless and until he has agreed to do so; and the liquidator's certificate shall not issue until at least the minimum number of persons required under Rule 4.175 to form a committee have signified their agreement.

• (5) As and when the others signify their agreement, the liquidator shall issue an amended certificate.

• (6) The liquidator's certificate (or, as the case may be, the amended certificate) shall be filed by him in court.

• (7) If subsequently there is any change in the committee's membership, the liquidator shall report the change to the court.

Obligations of liquidator to committee

4.177

• (1) As soon as may be after the issue of the liquidator's certificate under Rule 4.176, the liquidator shall report to the liquidation committee what actions he has taken since the date on which the company went into liquidation.

• (2) A person who becomes a member of the committee after that date is not entitled to require a report to him by the liquidator, otherwise than in a summary form, of any matters previously arising.

• (3) Nothing in this Rule disentitles the committee, or any member of it, from having access to the records of the liquidation (whether relating to the period when he was administrator, or to any subsequent period), or from seeking an explanation of any matter within the committee's responsibility.

Application of Chapter 12

4.178

Except as provided above in this Chapter, Rules 4.155 to 4.172A in Chapter 12 apply to the liquidation committee following the issue of the liquidator's certificate under Rule 4.176, as if it had been established under section 141.

CHAPTER 14 — COLLECTION AND DISTRIBUTION OF COMPANY'S ASSETS BY LIQUIDATOR

General duties of liquidator

4.179

(NO CVL APPLICATION)

• (1) The duties imposed on the court by the Act with regard to the collection of the company's assets and their application in discharge of its liabilities are discharged by the liquidator as an officer of the court subject to its control.

• (2) In the discharge of his duties the liquidator, for the purposes of acquiring and retaining possession of the company's property, has the same powers as a receiver appointed by the High Court, and the court may on his application enforce such acquisition or retention accordingly.

Manner of distributing assets

4.180

• (1) Whenever the liquidator has sufficient funds in hand for the purpose he shall, subject to the retention of such sums as may be necessary for the expenses of the winding up, declare and distribute dividends among the creditors in respect of the debts which they have respectively proved.

• (2) The liquidator shall give notice of his intention to declare and distribute a dividend.

• (3) Where the liquidator has declared a dividend, he shall give notice of it to the creditors, stating how the dividend is proposed to be distributed. The notice shall contain such particulars with respect to the company, and to its assets and affairs, as will enable the creditors to comprehend the calculation of the amount of the dividend and the manner of its distribution.

Debts of insolvent company to rank equally

4.181

• (1) (NO CVL APPLICATION)

Debts other than preferential debts rank equally between themselves in the winding up and, after the preferential debts, shall be paid in full unless the assets are insufficient for meeting them, in which case they abate in equal proportions between themselves.

• (2) Paragraph (1) applies whether or not the company is unable to pay its debts.

Supplementary provisions as to dividend

4.182

• (1) In the calculation and distribution of a dividend the liquidator shall make provision—

• (a) for any debts which appear to him to be due to persons who, by reason of the distance of their place of residence, may not have had sufficient time to tender and establish their proofs,

• (b) for any debts which are the subject of claims which have not yet been determined, and

• (c) for disputed proofs and claims.

• (2) A creditor who has not proved his debt before the declaration of any dividend is not entitled to disturb, by reason that he has not participated in it, the distribution of that dividend or any other dividend declared before his debt was proved, but—

• (a) when he has proved that debt he is entitled to be paid, out of any money for the time being available for the payment of any further dividend, any dividend or dividends which he has failed to receive, and

• (b) any dividend or dividends payable under sub-paragraph (a) shall be paid before that money is applied to the payment of any such further dividend.

• (3) No action lies against the liquidator for a dividend; but if he refuses to pay a dividend the court may, if it thinks fit, order him to pay it and also to pay, out of his own money—

• (a) interest on the dividend, at the rate for the time being specified in section 17 of the Judgments Act 1838, from the time when it was withheld, and

• (b) the costs of the proceedings in which the order to pay is made.

Distribution in members' voluntary winding up (NO CVL APPLICATION)

4.182A

• (1) In a members' voluntary winding up the liquidator may give notice in such newspaper as he considers most appropriate for the purpose of drawing the matter to the attention of the company’s creditors that he intends to make a distribution to creditors.

• (2) The notice shall specify a date (“the last date for proving”) up to which proofs may be lodged. The date shall be the same for all creditors and not less than 21 days from that of the notice.

• (3) The liquidator is not obliged to deal with proofs lodged after the last date for proving; but he may do so, if he thinks fit.

• (4) A creditor who has not proved his debt before the last date for proving or after that date increases the claim in his proof is not entitled to disturb, by reason that he has not participated in it, either at all or, as the case may be, to the extent that his increased claim would allow, that distribution or any other distribution made before his debt was proved or his claim increased; but when he has proved his debt or, as the case may be, increased his claim, he is entitled to be paid, out of any money for the time being available for the payment of any further distribution, any distribution or distributions which he has failed to receive.

• (5) Where the distribution proposed to be made is to be the only or the final distribution in that winding up, the liquidator may, subject to paragraph (6), make that distribution without regard to the claim of any person in respect of a debt not already proved.

• (6) Where the distribution proposed to be made is one specified in paragraph (5), the notice given under paragraph (1) shall state the effect of paragraph (5).

Division of unsold assets

4.183

Without prejudice to provisions of the Act about disclaimer, the liquidator may, with the permission of the liquidation committee, divide in its existing form amongst the company's creditors, according to its estimated value, any property which from its peculiar nature or other special circumstances cannot be readily or advantageously sold.

General powers of liquidator

4.184

• (1) Any permission given by the liquidation committee (or if there is no such committee, a meeting of the company’s creditors) or the court under section 165(2) or section 167(1)(a), or under the Rules, shall not be a general permission but shall relate to a particular proposed exercise of the liquidator's power in question; and a person dealing with the liquidator in good faith and for value is not concerned to enquire whether any such permission has been given.

• (2) Where the liquidator has done anything without that permission, the court or the liquidation committee may, for the purpose of enabling him to meet his expenses out of the assets, ratify what he has done; but neither shall do so unless it is satisfied that the liquidator has acted in a case of urgency and has sought ratification without undue delay.

Enforced delivery up of company's property

4.185

(NO CVL APPLICATION)

• (1) The powers conferred on the court by section 234 (enforced delivery of company property) are exercisable by the liquidator or, where a provisional liquidator has been appointed, by him.

• (2) Any person on whom a requirement under section 234(2) is imposed by the liquidator or provisional liquidator shall, without avoidable delay, comply with it.

Final distribution

4.186

• (1) When the liquidator has realised all the company's assets or so much of them as can, in his opinion, be realised without needlessly protracting the liquidation, he shall give notice, under Part 11 of the Rules, either—

• (a) of his intention to declare a final dividend, or

• (b) that no dividend, or further dividend, will be declared.

• (2) The notice shall contain all such particulars as are required by Part 11 of the Rules and shall require claims against the assets to be established by a date specified in the notice.

• (3) After that date, the liquidator shall—

• (a) defray any outstanding expenses of the winding up out of the assets, and

• (b) if he intends to declare a final dividend, declare and distribute that dividend without regard to the claim of any person in respect of a debt not already proved.

• (4) The court may, on the application of any person, postpone the date specified in the notice.

CHAPTER 15 — DISCLAIMER

Liquidator's notice of disclaimer

4.187

• (1) Where the liquidator disclaims property under section 178, the notice of disclaimer shall contain such particulars of the property disclaimed as enable it to be easily identified.