The Insolvency (Scotland) Amendment Rules 2010

Made: 9th March 2010

Laid before Parliament: 10th March 2010

Coming into force: 6th April 2010

The Secretary of State makes the following Rules in exercise of the powers conferred by section411 of the Insolvency Act 1986[^f00001].

Citation, commencement and interpretation

1

These Rules may be cited as the Insolvency (Scotland) Amendment Rules 2010 and come into force on 6th April 2010.

2

In these Rules “the principal Rules” means the Insolvency (Scotland) Rules 1986[^f00002].

Amendments to the principal Rules

3

The principal Rules are amended in the manner provided for in Schedule 1 to these Rules.

Transitional provisions – general

4

• (1) The amendments to the principal Rules by these Rules apply as provided by paragraphs(2) and (3), except where Rules 5 and 6 provide differently.

• (2) They apply where a person agrees to act as nominee in respect of a proposal for a company voluntary arrangement on or after 6th April 2010.

• (3) They apply where a company enters administration on or after 6th April 2010, except where—

• (a) it enters administration by virtue of an administration order under paragraph 10 of Schedule B1 to the Insolvency Act 1986[^f00003] on an application made before 6th April 2010;

• (b) the administration is immediately preceded by a voluntary liquidation in respect of which the resolution to wind up was passed before 6th April 2010; or

• (c) the administration is immediately preceded by a liquidation on the making of a winding‑up order on a petition which was presented before 6th April 2010.

Revocations and amendments relating to new provisions in the Act

5

The amendments made by the following paragraphs of Schedule 1 to these Rules apply on and after 6th April 2010 in all cases, namely paragraphs 2, 3, 4, 22, 27 (in so far as that paragraph inserts new Rules 1.16C to 1.16E), 68 (in so far as that paragraph inserts new Rules 2.25B to 2.25E), 70 (in so far as that paragraph inserts a new Rule 2.26B), 83, 85, 92, 94 and 114.

Amendments relating to preparation of proposals for voluntary arrangements

6

The amendments made by paragraphs 5, 11 and 15 of Schedule 1 to these Rules apply where a copy of the proposal for a company voluntary arrangement is delivered to the intended nominee on or after 6thApril 2010.

SCHEDULE 1 — AMENDMENTS TO THE PRINCIPAL RULES

1

In Rule 0.2(1) before “territorial proceedings” insert—

• “Standard content” means— in relation to a notice to be published or advertised in the Edinburgh Gazette, the contents specified in Rule 7.21A; and in relation to a notice to be advertised in any other way, the contents specified in Rule 7.21B;

2

Insert after Rule 0.2(2)—

(3) A document or information given, delivered or sent in hard copy form under any Rule in Parts 1 and 2, or any other Rule applied by those parts, is sufficiently authenticated if it is signed by the person sending or supplying it. (4) A document or information given, delivered or sent in electronic form under any Rule in Parts 1 and 2, or any other Rule applied by those parts, is sufficiently authenticated— (a) if the identity of the sender is confirmed in a manner specified by the recipient, or (b) where no such manner has been specified by the recipient, if the communication contains or is accompanied by a statement of the identity of the sender and the recipient has no reason to doubt the truth of that statement.

3

After Rule 1.1 insert—

(1.1A) (1) Subject to paragraph (2), this Chapter applies where a notice or other document is required to be given, delivered or sent under this Part of these Rules. (2) This Chapter does not apply to— (a) the lodging of any application, or other document, with the court; (b) the service of any application, or other document, lodged with the court; (c) the service of any order of the court; or (d) the submission of documents to the registrar of companies. (1.1B) (1) Unless in any particular case some other form of delivery is required by the Act or these Rules or any order of the court, a notice or other document may be given, delivered or sent by electronic means provided that the intended recipient of the notice or other document has— (a) consented (whether in the specific case or generally) to electronic delivery (and has not revoked that consent); and (b) provided an electronic address for delivery. (2) Where a nominee or supervisor gives, sends or delivers a notice or other document to any person by electronic means, it must contain or be accompanied by a statement that the recipient may request a hard copy of the notice or document, and specify a telephone number, e-mail address and postal address that may be used to make such a request. (3) Where a hard copy of the notice or other document is requested it must be sent within 5 business days of receipt of the request by the nominee or supervisor, who may not make a charge for sending it in that form. (4) In the absence of evidence to the contrary, a notice or other document shall be presumed to have been delivered where— (a) the sender can produce a copy of the electronic message which – (i) contained the notice or other document, or to which the notice or other document was attached; and (ii) shows the time and date the message was sent; and (b) that electronic message was sent to the address supplied under paragraph (1)(b). (5) A message sent electronically is deemed to have been delivered to the recipient no later than 9.00 am on the next business day after it was sent. (1.1C) (1) This Rule applies for the purpose of section 246B[^f00004]. (2) A nominee or supervisor required to give, deliver or send a document to any person may (other than in a case where personal service is required) satisfy that requirement by sending that person a notice— (a) stating that the document is available for viewing and downloading on a website; (b) specifying the address of that website together with any password necessary to view and download the document from that website; and (c) containing a statement that the recipient of the notice may request a hard copy of the document, and specifying a telephone number, e-mail address and postal address which may be used to make such a request. (3) Where a notice to which this Rule applies is sent, the document to which it relates must— (a) be available on the website for a period of not less than 3 months after the date on which the notice is sent; and (b) be in such a format as to enable it to be downloaded from the website within a reasonable time of an electronic request being made for it to be downloaded. (4) Where a hard copy of the document is requested it must be sent within 5 business days of the receipt of the request by the nominee or supervisor, who may not make a charge for sending it in that form. (5) Where a document is given, delivered or sent to a person by means of a website in accordance with this Rule, it is deemed to have been delivered— (a) when the document was first made available on the website, or (b) if later, when the notice under paragraph (2) was delivered to that person. (1.1D) (1) Where the court is satisfied that the expense of sending notices in accordance with Rule 1.1C would, on account of the number of persons entitled to receive them, be disproportionate to the benefit of sending notices in accordance with that Rule, it may order that the requirement to give, deliver or send a relevant document to any person may (other than in a case where personal service is required) be satisfied by the nominee or supervisor sending each of those persons a notice— (a) stating that all relevant documents will be made available for viewing and downloading on a website; (b) specifying the address of that website together with any password necessary to view and download a relevant document from that site; and (c) containing a statement that the person to whom the notice is given, delivered or sent may at any time request that hard copies of all, or specific, relevant documents are sent to that person, and specifying a telephone number, e-mail address and postal address which may be used to make that request. (2) A document to which this Rule relates must— (a) be available on the website for a period of not less than 12 months from the date when it was first made available on the website or, if later, from the date upon which the notice was sent, and (b) be in such a format as to enable it to be downloaded from the website within a reasonable time of an electronic request being made for it to be downloaded. (3) Where hard copies of relevant documents have been requested, they must be sent by the nominee or supervisor— (a) within 5 business days of the receipt by the nominee or supervisor of the request to be sent hard copies, in the case of relevant documents first appearing on the website before the request was received, or (b) within 5 business days from the date a relevant document first appears on the website, in all other cases. (4) A nominee or supervisor must not require a person making a request under paragraph(3) to pay a fee for the supply of the document. (5) Where a relevant document is given, delivered or sent to a person by means of a website in accordance with this Rule, it is deemed to have been delivered— (a) when the relevant document was first made available on the website, or (b) if later, when the notice under paragraph (1) was delivered to that person. (6) In this Rule a relevant document means any document which the nominee or supervisor is first required to give, deliver or send to any person after the court has made an order under paragraph (1).

4

Omit Rule 1.2.

5

In Rule 1.3(2)—

• (a) omit “and” after paragraph (o); and

• (b) after paragraph (p) insert—

; and (q) such other matters (if any) as the directors consider appropriate for ensuring that members and creditors are enabled to reach an informed decision ontheproposal.

6

In Rule 1.3(3) for “former’s” substitute “nominee’s”.

7

For Rule 1.5(1) substitute—

(1) The directors shall, at the same time as the proposal is delivered to the nominee, deliver to the nominee a statement of the company’s affairs.

8

In Rule 1.5(4)—

• (a) for “their” substitute “the relevant director’s”; and

• (b) for “two or more directors of the company or by the company secretary and at least one director (other than the secretary himself)” substitute “one director”.

9

In Rule 1.6(3) for “him access to the company’s accounts and records”, substitute “the nominee such access to the company’s accounts and records as the nominee may require”.

10

In paragraphs (1) and (2) of Rule 1.8 for “7” substitute “5 business”.

11

In Rule 1.9(1) omit “less than 14, nor”.

12

In Rule 1.9(2) after “lodged” insert “and shall state the effect of Rule 1.16A(2) to (4),”.

13

In Rule 1.9(2)—

• (a) omit “and” after paragraph (b); and

• (b) after paragraph (c) insert—

;and (d) forms of proxy.

14

After Rule 1.9(2) insert—

(3) Notices calling the meetings shall be sent by the nominee at least 14 days before the day fixed for them to be held— (a) in the case of the creditors’ meeting, to all the creditors specified in the statement of affairs, and any other creditors of the company of whose address the nominee is aware; and (b) in the case of the meeting of members of the company, to all persons who are, to the best of the nominee’s belief, members of it.

15

In Rule 1.10—

• (a) in paragraph (a), after “in administration” insert “or liquidation”; and

• (b) omit paragraph (b).

16

For Rule 1.11(1) substitute—

(1) Notices calling meetings under section 3(2) shall be sent by the responsible insolvency practitioner at least 14 days before the day fixed for them to be held— (a) in the case of the creditors’ meeting, to all the creditors specified in the statement of affairs, and any other creditors of the company of whose address the responsible insolvency practitioner is aware; and (b) in the case of the meeting of members of the company, to all persons who are, to the best of the responsible insolvency practitioner’s belief, members of it.

17

In Rule 1.11(2)—

• (a) delete “and” after paragraph (a); and

• (b) after paragraph (b), insert—

(c) a statement of the effect of Rule 1.16A(2) to (4); and (d) forms of proxy.

18

Omit Rule 1.13.

19

In Rule 1.14(1) for “person summoning the meetings (“the convenor”) shall” substitute “nominee must”.

20

In Rule 1.14(3) for “7” substitute “5 business”.

21

After Rule 1.14(3) insert—

(4) Meetings shall, in all cases, be summoned for commencement between 10.00 and 16.00 hours on a business day.

22

After Rule 1.14 insert—

(1.14ZA) (1) This Rule applies to a request to the nominee of a meeting under section 246A(9)[^f00005] to specify a place for the meeting. (2) The request must be accompanied by— (a) in the case of a request by creditors, a list of the creditors making (or concurring with) the request and the amounts of those creditors’ respective debts in the insolvency proceedings in question, (b) in the case of a request by members, a list of the members making (or concurring with) the request and those members’ voting rights, and (c) from each person concurring, written confirmation of that person’s concurrence. (3) The request must be made within 7 business days of the date on which the nominee sent the notice of the meeting in question. (4) Where the nominee considers that the request has been properly made in accordance with the Act and these Rules, the nominee must— (a) give notice (to all those previously given notice of the meeting)— (i) that the meeting is to be held at a specified place, and (ii) whether the date and time of the meeting are to remain the same or not; (b) specify a time, date and place for the meeting, the date of which must not be more than 28 days after the original date for the meeting; and (c) give at least 14 days notice of the time, date and place of the meeting (to all those previously given notice of the meeting), and the notices required by subparagraphs (a) and (c) may be given at the same or different times. (5) Where the nominee has specified a place for the meeting in response to a request to which this Rule applies, the chairman of the meeting must attend the meeting by being present in person at that place.

23

After Rule 1.14A insert—

(1.14AA) At any meeting, the chairman shall not, by virtue of any proxy held by him, vote to increase or reduce the amount of the remuneration or expenses of the nominee or the supervisor of the proposed arrangement, unless the proxy specifically directs him to vote in that way.

24

At the end of Rule 1.15A(3) insert—

(4) A creditor is entitled to vote at any meeting if the creditor, either at the meeting or before it, has submitted the creditor’s claim to the responsible insolvency practitioner and the creditor’s claim has been accepted in whole or in part.

25

After Rule 1.15A insert—

(1.15AA) (1) Members of a company at their meeting shall vote according to the rights attaching to their shares in accordance with the company’s articles of association. (2) Reference in this Rule to a person’s shares include any other interests which that person may have as a member of the company.

26

After Rule 1.16(5) insert—

(6) During a meeting, the chairman may, in the chairman’s discretion and without an adjournment, declare the meeting suspended for any period up to one hour.

27

After Rule 1.16 insert—

(1.16A) (1) Subject to paragraph (2), a resolution is passed at a creditors’ meeting when a majority (in value) of those present and voting in person or by proxy have voted in favour of it. (2) A resolution to approve the proposal or a modification is passed when a majority of three quarters or more (in value) of those present and voting in person or by proxy have voted in favour of it. (3) There is to be left out of account a creditor’s vote in respect of any claim or part of a claim- (a) where written notice of the claim was not given, either at the meeting or before it, to the chairman or nominee; (b) where the claim or part is secured; (c) where the claim is in respect of a debt wholly or partly on, or secured by, a current bill of exchange or promissory note, unless the creditor is willing— (i) to treat the liability to the creditor on the bill or note of every person who is liable on it antecedently to the company, and who has not been made bankrupt or had their estate sequestrated (or in the case of a company, which has not gone into liquidation), as a security in the creditor’s hands; and (ii) to estimate the value of the security and (for the purpose of entitlement to vote, but not of any distribution under the arrangement) to deduct it from the creditor’s claim. (4) Any resolution is invalid if those voting against it include more than half in value of the creditors— (a) to whom notice of the meeting was sent; (b) whose votes are not to be left out of account under paragraph (3); and (c) who are not, to the best of the chairman’s belief, persons connected with the company. (5) It is for the chairman of the meeting to decide whether under this Rule— (a) a vote is to be left out of account in accordance with paragraph (3), and (b) a person is a connected person for the purpose of paragraph (4)(c), and in relation to the second of these two cases the chairman is entitled to rely on the information provided by the company’s statement of affairs or otherwise in accordance with this Part of the Rules. (6) If the chairman uses a proxy contrary to Rule 1.14AA the chairman’s vote with that proxy does not count towards any majority under this Rule. (7) The chairman’s decision on any matter under the Rule is subject to appeal to the court by any creditor and paragraphs (5) to (7) of Rule 1.15B apply as regards such an appeal. (1.16B) (1) Subject as follows and to any express provision made in the articles of association of the company, at a meeting of the members of the company any resolution is to be regarded as passed if voted for by more than one-half in value of the members present in person or by proxy and voting on the resolution. (2) The value of members is determined by reference to the number of votes conferred on each member by the company’s articles. (3) If the chairman uses a proxy contrary to Rule 1.14AA, the chairman’s vote with that proxy does not count towards any majority under this Rule. (1.16C) (1) In this Rule and Rules 1.16D and 1.16E an “excluded person” means a person who— (a) has taken all steps necessary to attend a meeting under the arrangements put in place to do so by the convener of the meeting under section 246A(6); and (b) those arrangements do not permit that person to attend the whole or part of that meeting. (2) Where the chairman becomes aware during the course of the meeting that there is an excluded person, the chairman may— (a) continue the meeting; (b) declare the meeting void and convene the meeting again; or (c) declare the meeting valid up to the point where the person was excluded and adjourn the meeting. (3) Where the chairman continues the meeting, the meeting is valid unless— (a) the chairman decides in consequence of a complaint under Rule 1.16E to declare the meeting void and hold the meeting again; or (b) the court directs otherwise. (4) Without prejudice to paragraph (2), where the chairman becomes aware during the course of the meeting of an excluded person, the chairman may, in the chairman’s discretion and without an adjournment, declare the meeting suspended for any period up to one hour. (1.16D) (1) A person who claims to be an excluded person may request an indication of what occurred during the period of that person’s claimed exclusion (the “indication”). (2) A request under paragraph (1) must be made as soon as reasonably practicable, and, in any event, no later than 4 p.m. on the business day following the day on which the exclusion is claimed to have occurred. (3) A request under paragraph (1) must be made to— (a) the chairman, where it is made during the course of the business of the meeting; or (b) the nominee or supervisor where it is made after the conclusion of the business of the meeting. (4) Where satisfied that the person making the request is an excluded person, the person to whom the request is made must give the indication as soon as reasonably practicable and, in any event, no later than 4. p.m. on the day following the request in paragraph (1). (1.16E) (1) Any person who— (a) is, or claims to be, an excluded person; or (b) attends the meeting (in person or by proxy) and considers that they have been adversely affected by a person’s actual, apparent or claimed exclusion, (“the complainant”) may make a complaint. (2) The person to whom the complaint must be made (“the relevant person”) is— (a) the chairman, where it is made during the course of the meeting; or (b) the nominee or supervisor, where it is made after the meeting. (3) The relevant person must— (a) consider whether there is an excluded person; (b) where satisfied that there is an excluded person, consider the complaint; and (c) where satisfied that there has been prejudice, take such action as the relevant person considers fit to remedy the prejudice. (4) Paragraph (5) applies where— (a) the relevant person is satisfied that the complainant is an excluded person; (b) during the period of the person’s exclusion— (i) a resolution was put to the meeting; and (ii) voted on; and (c) the excluded person asserts how the excluded person intended to vote on the resolution. (5) Subject to paragraph (6), where satisfied that the effect of the intended vote in paragraph (4), if cast, would have changed the result of the resolution, the relevant person must— (a) count the intended vote as being cast in accordance with the complainant’s stated intention; (b) amend the record of the result of the resolution; and (c) where those entitled to attend the meeting have been notified of the result of the resolution, notify them of the change. (6) Where satisfied that more than one complainant in paragraph (4) is an excluded person, the relevant person must have regard to the combined effect of the intended votes. (7) A complaint must be made as soon as reasonably practicable and, in any event, by 4 p.m. on the business day following— (a) the day on which the person was excluded; or (b) where an indication is requested under Rule 1.16D, the day on which the complainant received the indication. (8) The relevant person must notify the complainant in writing of any decision. (9) A complainant who is not satisfied by the action of the relevant person may apply to the court for a direction to be given to the relevant person as to the action to be taken in respect of the complaint, and any application must be made no more than 2 business days from the date of receiving the decision of the relevant person.

28

In Rule 1.17(3) before “days” insert “business”.

29

In Rule 1.17(4) for “immediately” substitute “as soon as reasonably practicable”.

30

In Rule 1.18(1) for “may”, where it first occurs, substitute “must”.

31

In Rule 1.18A(5) for “7” substitute “5 business”.

32

In paragraphs (4)(b) and (5) of Rule 1.20 for “7” substitute “5 business”.

33

For Rule 1.21 substitute—

(1.21) (1) This Rule applies where the voluntary arrangement authorises or requires the supervisor— (a) to carry on the business of the company or trade on its behalf or in its name; (b) to realise assets of the company; or (c) otherwise to administer or dispose of any of its funds. (2) The supervisor must keep accounts and records of the supervisor’s acts and dealings in, and in connection with, the arrangement, including in particular records of all receipts and payments of money. (3) The supervisor must preserve any accounts and records in paragraph (2) which— (a) were kept by any other person who has acted as supervisor of the arrangement; and (b) are in the supervisor’s possession. (1.21A) (1) Subject to paragraph (2), the supervisor must, in respect of each period of 12 months ending with the anniversary of the commencement of the arrangement, send within 2 months of the end of that period a report on the progress and prospects for the full implementation of the voluntary arrangement to— (a) the registrar of companies; (b) the company; (c) all of the company’s creditors who are bound by the voluntary arrangement of whose address the supervisor is aware; (d) subject to paragraph (4) below, the members of the company; and (e) if the company is not in liquidation, the company’s auditors (if any) for the time being. (2) The supervisor is not required to send a report under paragraph (1), if an obligation to send a final report under Rule 1.23 arises in the period of 2 months mentioned in paragraph(1). (3) Where the supervisor is authorised or required to do any of the things mentioned in Rule 1.21 (1)(a) to (c), the report required to be sent pursuant to paragraph (1), must include or be accompanied by— (a) an abstract of receipts and payments required to be recorded by virtue of Rule 1.21(2); or (b) where there have been no such receipts and payments, a statement to that effect. (4) The court may, on application by the supervisor, dispense with the sending under this Rule of abstracts or reports to members of the company, either altogether or on the basis that the availability of the abstract or report to members is to be advertised by the supervisor in a specified manner.

34

In Rule 1.27(1)—

• (a) for “no later than 7 days after” substitute “at the same time as”; and

• (b) omit “or such longer time as he may allow”.

35

In Rule 1.27(4)—

• (a) for “their” substitute “the relevant director’s”; and

• (b) for “two or more directors of the company, or by the company secretary and at least one director (other than the secretary himself)” substitute “one director”.

36

After Rule 1.30(2) insert—

(2A) In addition to the standard content, notices published under paragraph (2) must state— (a) the nature of the business of the company; (b) that a moratorium under section 1A[^f00006] has come into force; and (c) the date upon which the moratorium came into force.

37

In Rule 1.30(3) for “he” substitute “and address the nominee”.

38

In Rule 1.31(2) for “certified copy interlocutor” substitute “copy”.

39

After Rule 1.32(1) insert—

(1A) In addition to the standard content, notices published under paragraph (2) must state— (a) the nature of the business of the company; (b) that a moratorium under section 1A has come to an end; and (c) the date upon which the moratorium came to an end.

40

In Rule 1.32(2) for “he” substitute “and address the nominee”.

41

In Rule 1.35(d) for “he” substitute “and address the nominee”.

42

In paragraphs (1) and (2) of Rule 1.36 for “7” substitute “5 business”.

43

In Rule 1.36(3) for “his consent to act” substitute “that the replacement nominee—

• (a) consents to act; and

• (b) is qualified to act as an insolvency practitioner in relation to the company or is an authorised person in relation to the company.

44

In Rule 1.38 for “7” substitute “5 business”.

45

In Rule 1.39 omit paragraph (1).

46

For Rule 1.39(2) substitute—

(2) Subject to the provisions in this section of this Chapter, Rules 1.14, 1.14ZA, 1.14A, 1.14AA, 1.15, 1.15AA, 1.16A(3) to (7) and 1.16B to 1.16E shall apply with regard to meetings summoned pursuant to paragraph 29(1) of Schedule A1 to the Act as they apply to meetings of the company and creditors which are summoned under section 3 of the Act.

47

In Rule 1.40(2) for “he” substitute “the nominee”.

48

For Rule 1.40(4) substitute—

(4) Each notice sent under this Rule must— (a) in addition to the standard content, specify— (i) the court in which the documents relating to the obtaining of the moratorium were lodged; and (ii) the court reference; and (b) state the effect of Rule 1.43. (4A) With each notice there must be sent— (a) a copy of the directors’ proposal; (b) a copy of the statement of the company’s affairs or, if the nominee thinks fit, a summary of it (the summary to include a list of creditors and the amount of their debts); (c) the nominee’s comments on the proposal; and (d) forms of proxy.

49

In Rule 1.43 for paragraphs (1) and (2) substitute—

(1) Subject as follows, a resolution is passed at a creditors’ meeting when a majority (in value) of those present and voting in person or by proxy have voted in favour of it. (2) A resolution to approve the proposal or a modification is passed when a majority of three quarters or more (in value) of those present and voting in person or by proxy have voted in favour of it.

50

After Rule 1.44(1) insert—

(1A) During a meeting, the chairman may, in the chairman’s discretion and without an adjournment, declare the meeting suspended for any period up to one hour.

51

For Rule 1.46(1) substitute—

(1) Where a member State liquidator proposes to apply to the court for conversion of a voluntary arrangement into winding-up proceedings, an affidavit complying with Rule 1.47 must be prepared and filed in court in support of the application. (1A) In this Rule, and in Rules 1.47 and 1.48, “conversion into winding-up proceedings” means an order under Article 37 of the EC Regulation (conversion of earlier proceedings) that the voluntary arrangement is converted into— (a) administration proceedings whose purposes are limited to the winding up of the company through administration and are to exclude the purpose contained in paragraph 3(1)(a) of Schedule B1 to the Act[^f00007]; (b) a creditors’ voluntary winding up; or (c) a winding up by the court.

52

In Rule 1.47(1)(b)—

• (a) for “deponent’s belief” substitute “belief of the person making the statement”; and

• (b) for “a winding up” substitute “winding-up proceedings”.

53

For Rule 1.47(1)(c) substitute—

(c) the opinion of the person making the statement as to whether the company ought to enter voluntary winding up or be wound up by the court; and

54

In paragraphs (1), (2) and (4) of Rule 1.48 for “winding up” substitute “winding-up proceedings”.

55

After Rule 1.49, insert—

(1.50) The court, on the application of the nominee, the directors or any person appearing to it to have an interest, may direct that specified information may be omitted from any statement of affairs required to be sent to the creditors where the disclosure of such information would be likely to prejudice the conduct of the voluntary arrangement or might reasonably be expected to lead to violence against any person.

56

In Rule 2.1(1)(d) after the entry “—Chapter 5: Process of administration;” insert—

• Chapter 5A: The Giving of Notice and Supply of Documents;

57

After Rule 2.19(1) insert—

(1A) In addition to the standard content, notices published under paragraph (1) must state— (a) that an administrator has been appointed, (b) the date of the appointment; and (c) the nature of the business of the company.

58

In Rule 2.22(1) after “administration” insert “or might be reasonably expected to lead to violence against any person”.

59

In Rule 2.23(3) for “out of the assets” substitute “as an expense of the administration”.

60

In Rule 2.24(1)—

• (a) for “the company’s affairs” substitute “affairs of the company”; and

• (b) for “out of his receipts” substitute “as an expense of the administration”.

61

After paragraph 2.25(1)(j) insert—

(ka) a statement complying with paragraph (1B) of any pre-administration costs charged or incurred by the administrator or, to the administrator’s knowledge, by any other person qualified to act as an insolvency practitioner;

62

For Rule 2.25(1)(l) substitute—

(l) a statement (which must comply with paragraph (1C) where that paragraph applies) of how it is envisaged the purpose of the administration will be achieved and how it is proposed that the administration shall end;

63

Omit paragraph 2.25(1)(m).

64

After Rule 2.25(1) insert—

(1A) In this Part— (a) “pre-administration costs” are— (i) fees charged, and (ii) expenses incurred, by the administrator, or another person qualified to act as an insolvency practitioner, before the company entered administration but with a view to its doing so; and (b) “unpaid pre-administration costs” are pre-administration costs which had not been paid when the company entered administration. (1B) A statement of pre-administration costs complies with this paragraph if it includes— (a) details of any agreement under which the fees were charged and expenses incurred, including the parties to the agreement and the date on which the agreement was made, (b) details of the work done for which the fees were charged and expenses incurred, (c) an explanation of why the work was done before the company entered administration and how it would further the achievement of an objective in sub-paragraph (1) of paragraph3 in accordance with sub-paragraphs (2) to (4) of that paragraph, (d) a statement of the amount of the pre-administration costs, setting out separately– (i) the fees charged by the administrator, (ii) the expenses incurred by the administrator, (iii) the fees charged (to the administrator’s knowledge) by any other person qualified to act as an insolvency practitioner (and, if more than one, by each separately), and (iv) the expenses incurred (to the administrator’s knowledge) by any other person qualified to act as an insolvency practitioner (and, if more than one, by each separately), (e) a statement of the amounts of unpaid pre-administration costs (set out separately as under sub-paragraph (d), (f) the identity of the person who made the payment or, if more than one person made the payment, the identity of each such person and of the amounts paid by each such person set out separately as under sub-paragraph (d), (g) a statement of the amounts of unpaid pre-administration costs (set out separately as under sub-paragraph (d)), and (h) a statement that the payment of unpaid pre-administration costs as an expense of the administration is— (i) subject to approval under Rule 2.39C, and (ii) not part of the proposals subject to approval under paragraph 53. (1C) This paragraph applies where it is proposed that the administration will end by the company moving to a creditors’ voluntary liquidation; and in that case, the statement required by Rule 2.25(1)(l) must include— (a) details of the proposed liquidator; (b) where applicable, the declaration required by section 231 (appointment to office of two or more persons); and (c) a statement that the creditors may, before the proposals are approved, nominate a different person as liquidator in accordance with paragraph 83(7)(a) and Rule2.47.

65

After Rule 2.25(3) insert—

(3A) Where proposals are deemed under paragraph (3) to have been approved, the administrator must, as soon as reasonably practicable after the expiry of the period set out in Rule 2.31, give notice of the date on which they were deemed to have been approved to the registrar of companies, the court and the creditors in the form required by Rule 7.30 and Schedule 5; and a copy of the proposals must be attached to the notice given to the court and to creditors who have not previously received them.

66

In Rule 2.25(5) for “10” substitute “7 business”.

67

For Rule 2.25(6A) substitute—

(6A) A notice published under Rule 2.25(6) must include the standard content and must state— (a) that members can write to request that a copy of the statement of proposals be provided free of charge; and (b) the address to which to write.

68

After Rule 2.25 insert—

(2.25A) (1) Where the administrator thinks that it would prejudice the conduct of the administration or might reasonably be expected to lead to violence against any person for any of the matters specified in Rule 2.25(1)(h) and (i) to be disclosed, the administrator may apply to the court for an order of limited disclosure in respect of any specified part of the statement under paragraph 49 containing such matter. (2) The court may, on such application, order that some or all of the specified part of the statement must not be sent to the registrar of companies or to creditors or members of the company as otherwise required by paragraph 49(4). (3) The administrator must as soon as reasonably practicable send to the persons specified in paragraph 49(4) the statement under paragraph 49 (to the extent provided by the order) and an indication of the nature of the matter in relation to which the order was made. (4) The administrator must also send a copy of the order to the registrar of companies. (5) A creditor who seeks disclosure of a part of a statement under paragraph 49 in relation to which an order has been made under this Rule may apply to the court for an order that the administrator disclose it. The application must be supported by written evidence in the form of an affidavit. (6) The court may make any order for disclosure subject to any conditions as to confidentiality, duration and scope of the order in the event of any change of circumstances, or other matters as it sees just. (7) If there is a material change in circumstances rendering the limit on disclosure or any part of it unnecessary, the administrator must, as soon as reasonably practicable after the change, apply to the court for the order or any part of it to be discharged or varied. (8) The administrator must, as soon as reasonably practicable after the making of an order under paragraph (7), send to the persons specified in paragraph 49(4) a copy of the statement under paragraph 49 to the extent provided by the order. (2.25B) (1) Subject to paragraph (2), this Chapter applies where a notice or other document is required to be given, delivered or sent under this Part of these Rules. (2) This Chapter does not apply to— (a) the lodging of any application, or other document, with the court; (b) the service of any application, or other document, lodged with the court; (c) the service of any order of the court; or (d) the submission of documents to the registrar of companies. (2.25C) (1) Unless in any particular case some other form of delivery is required by the Act or these Rules or any order of the court, a notice or other document may be given, delivered or sent by electronic means provided that the intended recipient of the notice or other document has— (a) consented (whether in the specific case or generally) to electronic delivery (and has not revoked that consent); and (b) provided an electronic address for delivery. (2) Where an administrator gives, sends or delivers a notice or other document to any person by electronic means, it must contain or be accompanied by a statement that the recipient may request a hard copy of the notice or document, and specify a telephone number, e-mail address and postal address which may be used to make such a request. (3) Where a hard copy of the notice or other document is requested it must be sent within 5 business days of receipt of the request by the administrator, who may not make a charge for sending it in that form. (4) In the absence of evidence to the contrary, a notice or other document shall be presumed to have been delivered where— (a) the sender can produce a copy of the electronic message which— (i) contained the notice or other document, or to which the notice or other document was attached; and (ii) shows the time and date the message was sent; and (b) that electronic message was sent to the address supplied under paragraph (1)(b). (5) A message delivered electronically shall be deemed to have been delivered to the recipient at 9.00 am on the next business day after it was sent. (2.25D) (1) This Rule applies for the purpose of section 246B[^f00008]. (2) An administrator required to give, deliver or send a document to any person may (other than in a case where personal service is required) satisfy that requirement by sending that person a notice— (a) stating that the document is available for viewing and downloading on a website; (b) specifying the address of that website together with any password necessary to view and download the document from that website; and (c) containing a statement that the recipient of the notice may request a hard copy of the document, and specifying a telephone number, e-mail address and postal address which may be used to make such a request. (3) Where a notice to which this Rule applies is sent, the document to which it relates must— (a) be available on the website for a period of not less than 3 months after the date on which the notice is sent; and (b) be in such a format as to enable it to be downloaded from the website within a reasonable time of an electronic request being made for it to be downloaded. (4) Where a hard copy of the document is requested it must be sent within 5 business days of the receipt of the request by the administrator, who may not make a charge for sending it in that form. (5) Where a document is given, delivered or sent to a person by means of a website in accordance with this Rule, it is deemed to have been delivered— (a) when the document was first made available on the website, or (b) if later, when the notice under paragraph (2) was delivered to that person. (2.25E) (1) Where the court is satisfied that the expense of sending notices in accordance with Rule2.25D would, on account of the number of persons entitled to receive them, be disproportionate to the benefit of sending notices in accordance with that Rule, it may order that the requirement to give, deliver or send a relevant document to any person may (other than in a case where personal service is required) be satisfied by the administrator sending each of those persons a notice— (a) stating that all relevant documents will be made available for viewing and downloading on a website; (b) specifying the address of that website together with any password necessary to view and download the document from that site; and (c) containing a statement that the person to whom the notice is given, delivered or sent may at any time request that hard copies of all, or specific, relevant documents are sent to that person, and specifying a telephone number, e-mail address and postal address which may be used to make that request. (2) A document to which this Rule relates must— (a) be available on the website for a period of not less than 12 months from the date when it was first made available on the website or, if later, from the date upon which the notice was sent, and (b) be in such a format as to enable it to be downloaded from the website within a reasonable time of an electronic request being made for it to be downloaded. (3) Where hard copies of relevant documents have been requested, they must be sent by the administrator— (a) within 5 business days of the receipt by the administrator of the request to be sent hard copies, in the case of relevant documents first appearing on the website before the request was received, or (b) within 5 business days from the date a relevant document first appears on the website, in all other cases. (4) An administrator must not require a person making a request under paragraph (3) to pay a fee for the supply of the document. (5) Where a relevant document is given, delivered or sent to a person by means of a website in accordance with this Rule, it is deemed to have been delivered— (a) when the relevant document was first made available on the website, or (b) if later, when the notice under paragraph (1) was delivered to that person. (6) In this Rule a relevant document means any document which the administrator is first required to give, deliver or send to any person after the court has made an order under paragraph(1).

69

In Rule 2.26A—

• (a) for paragraphs (1) and (2) substitute—

(1) The administrator shall publish notice of all meetings of the company’s creditors or members in the Edinburgh Gazette and in such other manner as the administrator thinks fit to ensure the meeting comes to the notice of any persons who are entitled to attend.

; and

• (b) in paragraph (3) for “paragraphs (1) and (2)” substitute “paragraph (1)”.

70

After Rule 2.26A insert—

(2.26B) (1) This Rule applies to a request to the administrator under section 246A(9)[^f00009] to specify a place for the meeting. (2) The request must be accompanied by— (a) in the case of a request by creditors, a list of the creditors making (or concurring with) the request and the amounts of those creditors’ respective debts in the insolvency proceedings in question, (b) in the case of a request by members, a list of the members making (or concurring with) the request and those members’ voting rights, and (c) from each person concurring, written confirmation of that person’s concurrence. (3) The request must be made within 7 business days of the date on which the administrator sent the notice of the meeting in question. (4) Where the administrator considers that the request has been properly made in accordance with the Act and these Rules, the administrator must – (a) give notice (to all those previously given notice of the meeting)— (i) that the meeting is to be held at a specified place, and (ii) whether the date and time of the meeting are to remain the same or not; (b) specify a time, date and place for the meeting, the date of which must not be more than 28 days after the original date for the meeting; and (c) give at least 14 days’ notice of the time, date and place of the meeting to all those previously given notice of the meeting, and the notices required by subparagraphs (a) and (c) may be given at the same or different times. (5) Where the administrator has specified a place for the meeting in response to a request to which this Rule applies, the chairman of the meeting must attend the meeting by being present in person at that place. (6) Rule 7.6 (4), (5), (6) and (7) (expenses of summoning meetings) as applied by Rule 2.26, do not apply to the summoning and holding of a meeting at a place specified in accordance with section 246A(9). (2.26C) (1) A creditor, in order to obtain an adjudication as to entitlement— (a) to vote at any meeting of the creditors in the administration; or (b) to a dividend (so far as funds are available) out of the assets of the company in respect of any accounting period, must submit a claim to the administrator. (2) A creditor’s claim must be submitted— (a) at or before the meeting; or, as the case may be, (b) not later than 8 weeks before the end of the accounting period. (3) A creditor’s claim must— (a) be made out by, or under the direction of, the creditor; (b) have attached an account or voucher (according to the nature of the debt claimed) which constitutes prima facieevidence of the debt; and (c) state the following matters— (i) the creditor’s name and address; (ii) if the creditor is a company, its registered number; (iii) the total amount of the creditor’s claim (including value added tax) as at the date on which the company entered administration, (or if the company was in liquidation when it entered administration, the date on which it went into liquidation) less any payments that have been made to the creditor after that date in respect of that claim; (iv) whether or not the claim includes outstanding uncapitalised interest; (v) particulars of how and when the debt was incurred by the company; (vi) particulars of any security held, the date on which it was given and the value which the creditor puts on it; (vii) details of any reservation of title in respect of goods to which the debt refers; and (viii) the name, address and authority of the person making out the proof, if other than the creditor. (4) The administrator may dispense with any requirement in paragraph (3)(b) in respect of any debt or any class of debt. (5) A claim submitted by a creditor, which has been accepted in whole or in part by the administrator for the purpose of voting at a meeting, or of drawing a dividend in respect of any accounting period, shall be deemed to have been resubmitted for the purpose of obtaining an adjudication as to the creditor’s entitlement both to vote at any subsequent meeting and (so far as funds are available) to a dividend in respect of an accounting period or, as the case may be, any subsequent accounting period. (6) A creditor who has submitted a claim, may at any time submit a further claim specifying a different amount for that creditor’s claim, provided that a secured creditor shall not be entitled to produce a further claim specifying a different value for the security at any time after the administrator has required the creditor to discharge, convey or assign the security. (7) Where an administration is immediately preceded by a winding up, a creditor who has proved a debt in the winding up is deemed to have proved it in the administration.

71

In Rule 2.27(2) omit the words “once only and”.

72

In Rule 2.27 omit paragraph (4).

73

After Rule 2.27 insert—

(2.27A) (1) This Rule applies to all meetings of creditors, and Rule 7.8 does not apply. (2) If within 30 minutes from the time fixed for the commencement of the meeting those persons attending the meeting do not constitute a quorum, the chairman may adjourn the meeting to such time and place as the chairman may appoint. (3) Once only in the course of the meeting the chairman may, without an adjournment, declare the meeting suspended for any period up to one hour. (4) In the course of any meeting, the chairman may, in the chairman’s discretion, and shall, if the meeting so resolves, adjourn it to such date, time and place as seems to the chairman to be appropriate in the circumstances. (5) An adjournment under paragraph (4) must not be for a period of more than 14 days, subject to a direction from the court. (6) If there are subsequent further adjournments, the final adjournment must not be to a day later than 14 days after the date on which the meeting was originally held. (7) Where a meeting is adjourned under this Rule, proxies may be used if lodged at or before the adjourned meeting. (8) Where a meeting is adjourned under this Rule, any proxies given for the original meeting may be used at the adjourned meeting.

74

In Rule 2.28(6) for “4.15 as applied by this Part” substitute “2.26C, except where the statement of claim and account or voucher have already been submitted by the creditor to the administrator”.

75

For Rule 2.29 substitute—

(2.29) Subject to anything to the contrary in the Act and these Rules, a meeting of the members of the company must be summoned and conducted— (a) in the case of a company incorporated in a part of the United Kingdom in accordance with the law of that part including any applicable provision in or made under the Companies Act 2006; (b) in the case of a company incorporated in an EEA state other than the United Kingdom, in accordance with the law of that state applicable to meetings of the company; or (c) in any other case, in accordance with the law of Scotland, including any provision in or made under the Companies Act 2006 applicable to the company as an overseas company.

76

In Rule 2.31 for “12” substitute “8 business”.

77

In Rule 2.32(1) for “does” substitute “and (b) do”.

78

After Rule 2.32 insert—

(2.32A) (1) The court may order that notice of any meeting be given by advertisement and not by individual notice to the persons concerned. (2) In considering whether to act under this Rule, the court must have regard to the cost of advertisement, the amount of assets available and the extent of the interest of creditors, members or any particular class of either.

79

After Rule 2.34(1)(h)(iii) insert—

; and (iv) where applicable, the declaration required by section 231.

80

In Rule 2.34(2) after “5” insert “business”.

81

In Rule 2.35(1)(a) after “notice of the meeting” insert “and to the registrar of companies;”.

82

In Rule 2.35(1)(b) omit “to the registrar of companies and”.

83

After Rule 2.35 insert—

(2.35A) (1) In this Rule and Rules 2.35B and 2.35C an “excluded person” means a person who— (a) has taken all steps necessary to attend a meeting under the arrangements put in place to do so by the convener of the meeting under section 246A(6); and (b) those arrangements do not permit that person to attend the whole or part of that meeting. (2) Where the chairman becomes aware during the course of the meeting that there is an excluded person, the chairman may— (a) continue the meeting; (b) declare the meeting void and convene the meeting again; (c) declare the meeting valid up to the point where the person was excluded and adjourn the meeting. (3) Where the chairman continues the meeting, the meeting is valid unless— (a) the chairman decides in consequence of a complaint under Rule 2.35C to declare the meeting void and hold the meeting again; or (b) the court directs otherwise. (4) Without prejudice to paragraph (2), where the chairman becomes aware during the course of the meeting of an excluded person, the chairman may, in the chairman’s discretion and without an adjournment, declare the meeting suspended for any period up to one hour. (2.35B) (1) A person who claims to be an excluded person may request an indication of what occurred during the period of that person’s claimed exclusion (the “indication”). (2) A request under paragraph (1) must be made as soon as reasonably practicable, and, in any event, no later than 4 p.m. on the business day following the day on which the exclusion is claimed to have occurred. (3) A request under paragraph (1) must be made to— (a) the chairman, where it is made during the course of the business of the meeting; or (b) the administrator where it is made after the conclusion of the business of the meeting. (4) Where satisfied that the person making the request is an excluded person, the person to whom the request is made must give the indication as soon as reasonably practicable and, in any event, no later than 4. p.m. on the day following the request in paragraph (1). (2.35C) (1) Any person who— (a) is, or claims to be, an excluded person; or (b) attends the meeting (in person or by proxy) and considers that they have been adversely affected by a person’s actual, apparent or claimed exclusion, (“the complainant”) may make a complaint. (2) The person to whom the complaint must be made (“the relevant person”) is— (a) the chairman, where it is made during the course of the meeting; or (b) the administrator, where it is made after the meeting. (3) The relevant person must— (a) consider whether there is an excluded person; (b) where satisfied that there is an excluded person, consider the complaint; and (c) where satisfied that there has been prejudice, take such action as the relevant person considers fit to remedy the prejudice. (4) Paragraph (5) applies where— (a) the relevant person is satisfied that the complainant is an excluded person; (b) during the period of the person’s exclusion— (i) a resolution was put to the meeting; and (ii) voted on; and (c) the excluded person asserts how the excluded person intended to vote on the resolution. (5) Subject to paragraph (6), where satisfied that the effect of the intended vote in paragraph (4), if cast, would have changed the result of the resolution, the relevant person must— (a) count the intended vote as being cast in accordance with the complainant’s stated intention; (b) amend the record of the result of the resolution; and (c) where those entitled to attend the meeting have been notified of the result of the resolution, notify them of the change. (6) Where satisfied that more than one complainant in paragraph (4) is an excluded person, the relevant person must have regard to the combined effect of the intended votes. (7) A complaint must be made as soon as reasonably practicable and, in any event, by 4 p.m. on the business day following— (a) the day on which the person was excluded; or (b) where an indication is requested under Rule 2.35B, the day on which the complainant received the indication. (8) The relevant person must notify the complainant in writing of any decision. (9) A complainant who is not satisfied by the action of the relevant person may apply to the court for a direction to be given to the relevant person as to the action to be taken in respect of the complaint, and any application must be made no more than 2 business days from the date of receiving the decision of the relevant person.

84

For Rule 2.36 substitute—