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The Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018

Type Statutory-Instrument

Publication 2018-10-11

Last updated 2021-10-01

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

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(4) The administrator must give five business days’ notice of the venue of a meeting to each member of the creditors’ committee (or a member’s representative, if designated for that purpose), except where the requirement for notice has been waived by or on behalf of a member.

(5) Waiver may be signified either at or before the meeting.

The chair at meetings

3.82

The chair at a meeting of a creditors’ committee must be the administrator or an appointed person.

Quorum

3.83

A meeting of a creditors’ committee is duly constituted if due notice of it has been delivered to all the members, and at least two of the members are in attendance or represented.

Committee members' representatives

3.84

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

(2) A person acting as a committee member’s representative must hold a letter of authority entitling that person to act (either generally or specifically) and authenticated by or on behalf of the committee member.

(3) A proxy or an instrument conferring authority (in respect of a person authorised to represent a body corporate or a partnership) is to be treated as a letter of authority to act generally (unless the proxy or instrument conferring authority contains a statement to the contrary).

(4) The chair at a meeting of the committee may call on a person claiming to act as a committee member’s representative to produce a letter of authority, and may exclude that person if no letter of authority is produced at or by the time of the meeting or it appears to the chair that the authority is deficient.

(5) A committee member may not be represented by—

(a) another member of the committee;

(b) a person who is at the same time representing another committee member;

(d) a partnership;

(e) an undischarged bankrupt;

(f) a person whose estate has been sequestrated and who has not been discharged;

(g) a person who has granted a trust deed for the benefit of creditors;

(h) a person who has made a composition with creditors;

(i) a person to whom a moratorium period under a debt relief order applies;

(j) a person who is subject to a company directors disqualification order or a company directors disqualification undertaking; or

(k) a person who is subject to a bankruptcy restrictions order (including an interim order), a bankruptcy restrictions undertaking, a debt relief restrictions order (including an interim order) or a debt relief restrictions undertaking.

(6) Where a representative authenticates any document on behalf of a committee member the fact that the representative authenticates as a representative must be stated below the authentication.

Voting rights and resolutions

3.85

(1) At a meeting of the committee, each member (whether the member is in attendance or is represented by a representative) has one vote.

(2) A resolution is passed when a majority of the members attending or represented have voted in favour of it.

(3) Every resolution passed must be recorded in writing and authenticated by the chair, either separately or as part of the minutes of the meeting.

Resolutions by correspondence

3.86

(1) The administrator may seek to obtain the agreement of the creditors’ committee to a resolution by delivering to every member (or the member’s representative designated for the purpose) details of the proposed resolution.

(2) The details must be set out in such a way that the recipient may indicate agreement or dissent and where there is more than one resolution may indicate agreement to or dissent from each one separately.

(3) A member of the creditors’ committee may, within five business days from the delivery of details of the proposed resolution, require the administrator to summon a meeting of the creditors’ committee to consider the matters raised by the proposed resolution.

(4) In the absence of such a request, the resolution is passed by the creditors’ committee if a majority of the members (excluding a member or member’s representative who is to participate directly or indirectly in a transaction) deliver notice to the administrator that they agree with the resolution.

Remote attendance at meetings of creditors' committee

3.87

(1) Where the administrator considers it appropriate, a meeting of a creditors’ committee may be conducted and held in such a way that persons who are not present together at the same place may attend it.

(2) A person attends such a meeting who is able to exercise that person’s right to speak and vote at the meeting.

(3) A person is able to exercise the right to speak at a meeting when that person is in a position to communicate during the meeting to all those attending the meeting any information or opinions which that person has on the business of the meeting.

(4) A person is able to exercise the right to vote at a meeting when—

(a) that person is able to vote, during the meeting, on resolutions or determinations put to the vote at the meeting; and

(b) that person’s vote can be taken into account in determining whether or not such resolutions or determinations are passed at the same time as the votes of all the other persons attending the meeting.

(5) Where such a meeting is to be held the administrator must make whatever arrangements the administrator considers appropriate to—

(a) enable those attending the meeting to exercise their rights to speak or vote; and

(b) verify the identity of those attending the meeting and to ensure the security of any electronic means used to enable attendance.

(6) A requirement in these Rules to specify a place for the meeting may be satisfied by specifying the arrangements the administrator proposes to enable persons to exercise their rights to speak or vote where in the reasonable opinion of the administrator—

(a) a meeting will be attended by persons who will not be present together at the same place; and

(b) it is unnecessary or inexpedient to specify a place for the meeting.

(7) In making the arrangements referred to in paragraph (6) and in forming the opinion referred to in paragraph (6)(b), the administrator must have regard to the legitimate interests of the creditors’ committee members or their representatives attending the meeting in the efficient despatch of the business of the meeting.

(8) Where the notice of a meeting does not specify a place for the meeting the administrator must specify a place for the meeting if at least one member of the creditors’ committee requests the administrator to do so in accordance with rule 3.88.

Procedure for requests that a place for a meeting should be specified

3.88

(1) This rule applies to a request to the administrator under rule 3.87 to specify a place for the meeting.

(2) The request must be made within three business days of the date on which the administrator delivered the notice of the meeting in question.

(3) Where the administrator considers that the request has been properly made in accordance with this rule, the administrator must—

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

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

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

(b) fix a venue for the meeting, the date of which must be not later than seven business days after the original date for the meeting; and

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

(5) Where the administrator has specified a place for the meeting in response to a request under rule 3.87(8), the chair of the meeting must attend the meeting by being present in person at that place.

Notice requiring administrator to attend the creditors’ committee (paragraph 57(3)(a) of Schedule B1)

[Note: in an administration paragraph 57(3) of Schedule B1 enables the creditors’ committee to require the administrator to provide the committee with information]

3.89 1 This rules applies where a creditors’ committee in an administration resolves under paragraph 57(3)(a) of Schedule B1 to require the attendance of the administrator. 2 The notice delivered to the administrator requiring the administrator’s attendance must be— a accompanied by a copy of the resolution; and b authenticated by a member of the creditors’ committee. 3 A member’s representative may authenticate the notice for the member. 4 The meeting at which the administrator’s attendance is required must be fixed by the committee for a business day, and must be held at such time and place as the administrator determines. 5 Where the administrator so attends, the creditors’ committee may elect one of their number to be chair of the meeting in place of the administrator or the appointed person.

Expenses of members etc.

3.90

(1) The administrator must pay, as an expense of the administration, the reasonable travelling expenses directly incurred by members of the creditors’ committee or their representatives in attending the creditors’ committee’s meetings or otherwise on the creditors’ committee’s business.

(2) The requirement for the administrator to pay the expenses does not apply to a meeting of the committee held within six weeks of a previous meeting, unless the meeting is summoned by the administrator.

Dealings by creditors’ committee members and others

3.91

(1) Membership of the creditors’ committee does not prevent a person from dealing with the company provided that a transaction is in good faith and for value.

(2) The court may, on the application of an interested person—

(a) set aside a transaction which appears to it to be contrary to this rule; and

(b) make such other order about the transaction as it thinks just, including an order requiring a person to whom this rule applies to account for any profit obtained from the transaction and compensate the company for any resultant loss.

Formal defects

3.92

The acts of a creditors’ committee are valid notwithstanding any defect in the appointment, election or qualifications of a member of the creditors’ committee or a committee member’s representative or in the formalities of its establishment.

CHAPTER 14 — Reporting and Remuneration

Progress reports

3.93

(1) The administrator must—

(a) within six weeks after the end of each accounting period; and

(b) within six weeks after the administrator ceases to act as administrator,

send to the court and to the registrar of companies, and to each creditor, a progress report.

(2) For the purposes of this Chapter, “accounting period” in relation to an administration is to be construed as follows:

(a) the first accounting period is the period of six months beginning with the date on which the company entered administration; and

(b) any subsequent accounting period is the period of six months beginning with the end of the last accounting period except that—

(i) where the administrator and the creditors’ committee agree, or

(ii) where there is no creditors’ committee, the court determines,

the accounting period is to be such other period beginning with the end of the last accounting period as may be agreed or, as the case may be determined, it is to be that other period.

(3) An administrator who fails to deliver a progress report within the time periods referred to in paragraph (1) is guilty of an offence.

(4) The court may, on the application of the administrator, extend either or both of the periods of six weeks referred to in paragraph (1) of this rule.

Progress reports: content

3.94

(1) The administrator’s progress report must include—

(a) identification details for the insolvency proceedings;

(b) identification and contact details for the administrator;

(c) the date of appointment of the administrator and any changes in the administrator in accordance with paragraphs (4) and (5);

(d) details of any extensions to the initial period of appointment;

(e) details of progress during the period of the report in accordance with paragraph (2):

(f) details of what assets remain to be realised;

(g) where a distribution is to be made in accordance with Chapter 15 in respect of an accounting period, the scheme of division; and

(h) any other relevant information for the creditors.

(2) The details of the progress during the period of the report must include—

(a) a receipts and payments account stating what assets of the company have been realised, for what value, and what payments have been made to creditors, in the form of a summary showing—

(i) receipts and payments during the relevant accounting period, or

(ii) where the administrator has ceased to act, receipts and payments during the period from the end of the last accounting period to the time when the administrator ceased to act (or, where the administrator has made no previous progress report, receipts and payments in the period since the administrator’s appointment); or

(b) where—

(i) no claim for outlays and remuneration is submitted under rule 3.95, or

(ii) a claim for outlays and remuneration is submitted under rule 3.95 but no determination fixing the amount of outlays and remuneration in accordance with rule 3.96(1) has been made in respect of such a claim—

(aa) a receipts and payments account which meets the requirements of paragraph (2)(a),

(bb) an estimate of the remuneration due to the administrator during the accounting period together with the basis or bases set out in rule 3.97 on which the estimate is based,

(cc) where remuneration due is not yet determined from the immediately preceding accounting period, an estimate of the remuneration due during that period, and

(dd) any outlays incurred.

(3) The receipts and payments account in a final progress report must include a statement as to the amount paid to unsecured creditors by virtue of the application of section 176A.

(4) A change in the administrator is only required to be shown in the next report after the change.

(5) However if the current administrator is seeking the repayment of pre-administration expenses from a former administrator, the change in administrator must continue to be shown until the next report after the claim is settled.

(6) This rule is without prejudice to the requirements of Chapter 15.

Administrator's outlays and remuneration: claims

3.95

(1) Where an administrator intends to submit a claim for the outlays reasonably incurred by the administrator and for remuneration within two weeks after the end of an accounting period, the administrator must submit to the creditors’ committee or, if there is no creditors’ committee, make available to creditors for the purposes of a decision procedure in respect of that period—

(a) the administrator’s accounts of their intromissions with the company’s assets;

(b) where funds are available after making allowance for contingencies, a scheme of division of the divisible funds; and

(i) any outlays reasonably incurred by the administrator, and

(ii) the administrator’s remuneration.

(2) The administrator may, at any time within two weeks after the end of an accounting period, in respect of the previous accounting period, submit to a creditors’ committee, or if there is no creditors’ committee, seek approval from creditors through a decision procedure for—

(a) the administrator’s accounts of its intromissions with the company’s assets for audit (such accounts of intromissions may include or consist of a progress report in terms of rules 3.93 and 3.94);

(b) the outlays reasonably incurred by the administrator; and

(3) The administrator may, at any time before the end of an accounting period submit to the creditors’ committee or, if there is no creditors’ committee, seek approval from creditors through a decision procedure for, an interim claim in respect of that period—

(a) for the outlays reasonably incurred by the administrator; and

(b) for the administrator’s remuneration.

(4) If the administrator submits such an interim claim, the creditors’ committee, or the creditors by decision procedure as the case may be may issue an interim determination in relation to the amount of the outlays and remuneration payable to the administrator, and where they do so, they must take into account that interim determination when issuing their determination under paragraph 3.96(1)(a)(ii).

Administrator's outlays and remuneration: determination

3.96

(1) Within six weeks after the end of an accounting period—

(a) the creditors’ committee or, if there is no creditors’ committee, the creditors through a decision procedure—

(i) may audit the accounts submitted or made available under rule 3.95(1)(a), and

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

(b) the administrator must make the accounts submitted for audit, scheme of division and determination of the amount fixed under paragraph (1)(a)(ii) available for the inspection by the members of the company and the creditors.

(2) If the administrator’s remuneration and outlays have been fixed by determination of the creditors’ committee in accordance with paragraph (1)(a)(ii) and the administrator considers the amount to be insufficient, the administrator may request that it be increased by decision of the creditors by decision procedure.

(3) If the creditors’ committee fails to issue a determination in accordance with paragraph (1)(a)(ii), the administrator must seek a decision of the creditors through decision procedure (except in a case under paragraph (6)) and they must issue a determination in accordance with paragraph (1)(a)(ii).

(4) If the creditors fail to issue a determination by decision procedure in accordance with paragraph (3) then the administrator must submit the claim to the court and the court must issue a determination.

(5) In a case where the administrator has made a statement under paragraph 52(1)(b) of Schedule B1, a decision under paragraph (2) or a decision under rule 3.101 is taken to be passed if (and only if) passed by the approval of—

(a) each secured creditor of the company; or

(b) if the administrator has made, or proposes to make, a distribution to preferential creditors—

(i) each secured creditor of the company, and

(ii) a decision of the preferential creditors in a decision procedure.

(6) In a case where the administrator has made a statement under paragraph 52(1)(b) of Schedule B1, if there is no creditor’s committee, or the committee does not make the requisite determination in accordance with rule 3.96(1)(a)(ii) or 3.96(3), the administrator’s remuneration and outlays may be fixed (in accordance with this rule) by the approval of—

(a) each secured creditor of the company; or

(b) if the administrator has made, or proposes to make, a distribution to preferential creditors—

(i) each secured creditor of the company, and

(ii) a decision of the preferential creditors in a decision procedure.

(7) In fixing the amount of the administrator’s remuneration and outlays in respect of any accounting period, the creditors’ committee or, as the case may be, the creditors by decision procedure, may take into account any adjustment which the creditors’ committee or the creditors may wish to make in the amount of the remuneration and outlays fixed in respect of any earlier accounting period.

Administrator's remuneration: basis of remuneration

3.97

(1) The basis of the administrator’s remuneration must be fixed—

(a) as a percentage of the value of the company’s property with which the administrator has to deal;

(b) by reference to the work which was reasonably undertaken by the administrator and the administrator’s staff in attending to matters arising in the administration; or

(2) The basis of remuneration may be one or a combination of the bases set out in paragraph (1) and different bases or percentages agreed may be fixed in respect of different things done by the administrator or administrator’s staff.

Former administrator's outlays and remuneration

3.98

For the purposes of paragraph 99 of Schedule B1, the former administrator’s outlays and remuneration comprise those items set out in rule 3.51.

Appeal against fixing of remuneration.

3.99

(1) If the administrator considers that the remuneration or outlays fixed for the administrator by the creditors’ committee, or by decision of the creditors (including remuneration or outlays fixed under rule 3.96(6)) is insufficient, the administrator may apply to the court for an order increasing their amount or rate.

(2) The administrator must give at least 14 days’ notice of the administrator’s application to the members of the creditors’ 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 creditors’ committee, the administrator’s notice of the administrator’s application must be sent to such one or more of the company’s creditors as the court may direct, which creditors may nominate one or more of their number to appear or be represented and heard.

(4) The court may order the expenses of the administrator’s application, including the expenses of any member of the creditors’ committee appearing or being represented on it, or any creditor so appearing or being represented, to be paid as an expense of the administration.

Creditor's claim that remuneration is excessive

3.100

(1) If the administrator’s remuneration and outlays have been fixed by the creditors’ committee or by the creditors, any creditor or creditors of the company representing in value at least 25 percent of the creditors may apply to the court not later than eight weeks after the end of an accounting period for an order that the administrator’s remuneration or outlays be reduced on the grounds that they are, in all the circumstances, excessive.

(2) The court may make an order fixing the remuneration or outlays at a reduced amount or rate.

(3) The court may order the expenses of the creditor making the application to be paid as an expense of the administration.

Remuneration of joint administrators

3.101

Where there are joint administrators—

(a) it is for them to agree between themselves as to how the remuneration or outlays payable should be apportioned;

(b) if they cannot agree as to how the remuneration or outlays payable should be apportioned, any one of them may refer the issue for determination—

(i) by the court, or

(ii) by resolution of the creditors’ committee or a meeting of creditors.

CHAPTER 15 — Claims by and distributions to Creditors

Application and interpretation of Chapter

3.102

(1) This Chapter applies in any case where the administrator proposes to make a distribution to creditors or any class of them.

(2) Where the distribution is to a particular class of creditors, references in this Chapter are to be treated as, so far as the context requires, references to that class of creditors only.

Payments of dividends

3.103

(1) On the final determination of the remuneration under rules 3.95 to 3.100 the administrator must, subject to rule 3.117, pay to the creditors their dividends in accordance with the scheme of division.

(2) Any dividend—

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

(b) dependent on a claim in respect of which an amount has been set aside under rule 3.117(7) or (8);

must be held by the administrator in an appropriate bank or institution in the name of the Accountant of Court and the deposit receipts transmitted to the Accountant of Court.

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

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

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

New administrator appointed

3.104

(1) If a new administrator is appointed in place of another, the former administrator must, as soon as reasonably practicable, transmit to the new administrator all the creditors’ claims which the former administrator has received, together with an itemised list of them.

(2) The new administrator must authenticate the list by way of receipt for the creditors’ claims and return it to the former administrator.

(3) From then on, all creditors’ claims must be sent to and retained by the new administrator.

Submission of claims

3.105

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

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

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

(b) documentary evidence of debt.

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

(3) The statement of claim must—

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

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

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

(e) state the total amount as at the date of the administration order claimed in respect of all debts;

(f) state whether or not the claim includes any outstanding uncapitalised interest;

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

(h) contain particulars of any security held, the date on which it was given and the value which the creditor puts on it;

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

(j) state the nature and amount of any preference under Schedule 6 to the Act⁵² claimed in respect of the debt;

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

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

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

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

(5) A creditor who has submitted a claim may at any time submit a further claim specifying a different amount for the claim, provided that a secured creditor is not entitled to produce a further claim specifying a different value for the security at any time after the administrator has required the creditor to discharge, or convey or assign, the security under rule 3.113.

False claims or evidence

3.106

(1) If a creditor produces under rule 3.105 a statement of claim or documentary evidence of debt or other evidence which is false—

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

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

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

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

Evidence of claims

3.107

(1) The administrator, for the purpose of being satisfied as to the validity or amount of a claim submitted by a creditor under rule 3.105, may require—

(a) the creditor to produce further evidence; or

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

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

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

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

(5) At any private examination under paragraph (2) or where the court grants a commission to take the examination under paragraph (4), a solicitor or counsel may act on behalf of the administrator, or the administrator may appear on the administrator’s own behalf.

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

(7) A person who fails without reasonable excuse to comply with an order made under paragraph (2) is guilty of an offence.

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

(a) a trust;

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

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

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

Adjudication of claims

3.108

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

(a) not later than four weeks before the end of the period, accept or reject every claim submitted or deemed to have been re-submitted under rule 3.105; and

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

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

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

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

(a) the amount of the claim accepted;

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

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

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

Entitlement to draw a dividend

3.109

(1) A creditor who has had that creditor’s claim accepted in whole or in part by the administrator under rule 3.108(1) or on appeal under rule 3.108(5) is entitled to payment out of the company’s assets of a dividend in respect of the accounting period for the purposes of which the claim is accepted.

(2) Such entitlement to payment arises only in so far as the company has funds available to make that payment, having regard to rule 3.115.

Liabilities and rights of obligants

3.110

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

(a) the dissolution of the company; or

(b) any composition with creditors.

(2) Paragraph (3) applies where—

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

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

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

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

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

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

Amount which may be claimed generally

3.111

(1) Subject to the provisions of this rule and rules 3.112 and 3.113 the amount in respect of which a creditor is entitled to claim is the accumulated sum of principal and any interest which is due on the debt as at the date on which the company entered administration.

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

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

(4) The rate of interest referred to in paragraph (2) is to be whichever is the greater of—

(a) the official rate at the date the company entered administration; or

(b) the rate applicable to that debt apart from the administration.

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

Debts depending on contingency

3.112

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

(2) On an application by the creditor—

(a) to the administrator; or

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

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

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

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

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

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

Secured debts

3.113

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

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

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

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

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

Claims in foreign currency

3.114

(1) A creditor may state the amount of his or her claim in a currency other than sterling where—

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

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

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

Order of priority in distribution

3.115

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

(a) the expenses of the administration;

(b) any preferential debts within the meaning of section 386⁵³ (excluding any interest which has been accrued thereon to the date on which the company entered administration);

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

(d) interest at the official rate, between the date on which the company entered administration and the date of payment, on—

(i) the preferential debts, and

(ii) the ordinary debts; and

(e) any postponed debt.

(2) In paragraph (1)—

(a) “postponed debt” means—

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

(ii) a claim arising by virtue of section 382(1)(a) of the Financial Services and Markets Act 2000⁵⁴ (restitution orders), unless it is also a claim arising by virtue of sub-paragraph (b) of that section (a person who has suffered loss etc.), or

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

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

(3) The expenses of the administration mentioned in paragraph (1)(a) are payable in the order of priority mentioned in rule 3.116.

(4) Subject to section 175—

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

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

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

(6) Nothing in this rule affects—

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

(b) any preference of the holder of a lien over a title deed or other document which the administrator has taken into his or her possession or control in accordance with paragraph 67 of Schedule B1.

Order of priority of expenses of administration

3.116

(1) Subject to rule 3.51 the expenses of the administration are payable out of the assets in the following order of priority—

(a) any outlays properly chargeable or incurred by the administrator in carrying out its functions in the administration, except those outlays specifically mentioned in the following sub-paragraphs;

(b) the cost, or proportionate cost, of any caution provided by an administrator in accordance with the Act or these Rules;

(c) the expenses of the applicant in the administration, and of any person appearing in the petition whose expenses are allowed by the court;

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

(e) the remuneration of the administrator determined in accordance with rules 3.95 to 3.101;

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

Estate to be distributed in respect of the accounting periods

3.117

(1) The administrator must make up accounts of the administrator’s intromissions with the company’s assets in respect of each accounting period.

(2) In this rule, “accounting period” is to be construed as follows—

(a) the first accounting period is the period of six months beginning with the date on which the company entered administration; and

(b) any subsequent accounting period is the period of six months beginning with the end of the last accounting period except that—

(i) where the administrator and the creditors’ committee agree; or

(ii) where there is no creditors’ committee, the court determines,

the accounting period is to be such other period beginning with the end of the last accounting period as may be agreed or, as the case may be determined, it is to be that other period.

(3) An agreement or determination under paragraph (2)(b)—

(a) may be made in respect of one or more than one accounting period;

(b) may be made before the beginning of the accounting period in relation to which it has effect and, in any event, is not to have effect unless made before the day on which such accounting period would, but for the agreement or determination, have ended;

(4) The administrator may make a distribution to secured or preferential creditors or, where the administrator has the permission of the court, to unsecured creditors only if-

(a) the administrator has sufficient funds for the purpose;

(b) the administrator does not intend to give notice pursuant to paragraph 83 of Schedule B1⁵⁵;

(c) the administrator’s statement of proposals, as approved by the creditors under paragraph 53(1) or 54(5) of Schedule B1⁵⁶, contains a proposal to make a distribution to the class of creditors in question, and

(d) the payment of a dividend is consistent with the functions and duties of the administrator and any proposals made by the administrator or which the administrator intends to make.

(5) The administrator may pay—

(a) the expenses of the administration mentioned in rule 3.116(1)(a), other than the administrator’s own remuneration, at any time;

(b) the preferential debts within the meaning of section 386 at any time but only with the consent of the creditors’ committee or, if there is no creditors’ committee, of the court.

(6) If the administrator—

(a) is not ready to pay a dividend in respect of an accounting period; or

(b) considers it would be inappropriate to pay such a dividend because the expenses of doing so would be disproportionate to the amount of the dividend,

the administrator may postpone such payment to a date not later than the time for payment of a dividend in respect of the next accounting period.

(7) Where an appeal is taken under rule 3.108(5) against the acceptance or rejection of a creditor’s claim, the administrator must at the time of payment of dividends and until the appeal is determined, set aside an amount which would be sufficient, if the determination in the appeal were to provide for the claim being accepted in full, to pay a dividend in respect of that claim.

(8) Where a creditor—

(a) has failed to produce evidence in support of a claim earlier than eight weeks before the end of an accounting period on being required by the administrator to do so under rule 3.107; and

(b) has given a reason for such failure which is acceptable to the administrator,

the administrator must set aside, for such time as is reasonable to enable the creditor to produce that evidence or any other evidence that will enable the administrator to be satisfied under rule 3.107 an amount which would be sufficient, if the claim were accepted in full, to pay a dividend in respect of that claim.

(9) Where a creditor submits a claim to the administrator later than eight weeks before the end of an accounting period but more than eight weeks before the end of a subsequent accounting period in respect of which, after making allowance for contingencies, funds are available for the payment of a dividend, the administrator must, if accepting the claim in whole or in part, pay to the creditor—

(a) the same dividend or dividends as has or have already been paid to creditors of the same class in respect of any accounting period or periods; and

(b) whatever dividend may be payable to that creditor in respect of the said subsequent accounting period

provided that paragraph (a) above is without prejudice to any dividend which has already been paid.

(10) In the declaration of and payment of a dividend, no payments are to be made more than once by virtue of the same debt.

(11) Subject to any notification by the person entitled to a dividend given to the administrator that the person wishes the dividend to be paid to another person, or has assigned that entitlement to another person, where both a creditor and a member State liquidator have had a claim accepted in relation to the same debt, payment is only to be made to the creditor.

Small debts

3.118

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

(a) the debt is a small debt;

(b) notice has been delivered to the creditor under rule 3.119; and

(2) In this rule “small debt” means a debt (being the total amount owed to a creditor) which does not exceed £1,000 (which amount is prescribed for the purposes of paragraph 13A⁵⁷ of Schedule 8 to the Act and paragraph 18A⁵⁸ of Schedule 9 to the Act.

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

3.119

(1) The administrator may treat a debt, which is a small debt according to the accounting records or the statement of affairs of the company, as if it were accepted under rule 3.108 for the purpose of paying a dividend.

(2) Where the administrator intends to treat such a debt as if it were accepted under rule 3.108 for the purpose of payment of a dividend, the administrator must not later than 12 weeks before the end of the accounting period deliver to the creditor a notice.

(3) The notice must—

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

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

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

(d) inform the creditor that where the creditor advises the administrator that the amount of the debt is incorrect the creditor must also submit not later than eight weeks before the end of the accounting period a statement of claim and documentary evidence of debt (see rule 3.105) in order to receive a dividend.

PART 4 — BLOCK TRANSFER OF PROCEEDINGS

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

Power to make a block transfer order

4.1

(1) Part 4 applies where it is expedient to transfer some or all of the cases in which an outgoing office-holder (“the outgoing office-holder”) holds office to one or more office-holders (“the replacement office-holder”) in a single transaction where the outgoing office-holder—

(a) dies;

(b) retires from practice; or

(2) In a case to which this Part applies the Court of Session has the power to make an order (“a block transfer order”) appointing a replacement office-holder in the place of the outgoing office-holder to be—

(a) administrator in any administration; or

(b) supervisor of a CVA.

(3) The replacement office-holder must be qualified to act as an insolvency practitioner in relation to the company.

Application for a block transfer order

4.2

(1) An application for a block transfer order may be made to the Court of Session for—

(a) the removal of the outgoing office-holder by the exercise of any of the powers in paragraph (2);

(b) the appointment of a replacement office-holder by the exercise of any of the powers in paragraph (3); or

(c) such other order or direction as may be necessary or expedient in connection with the matters referred to in sub-paragraphs (a) and (b).

(2) The powers referred to in paragraph (1)(a) are those in—

(a) section 7(5) and paragraph 39(6) of Schedule A1; and

(b) paragraph 88 of Schedule B1 and rule 4.1(2).

(3) The powers referred to in paragraph (1)(b) are those in —

(a) section 7(5) and paragraph 39(6) of Schedule A1; and

(b) paragraphs 63, 91 and 95 of Schedule B1 and rule 4.12(2).

(4) Subject to paragraph (5), the application may be made by any of the following—

(a) the outgoing office-holder (if able and willing to do so);

(b) any person who holds office jointly with the outgoing office-holder;

(d) any creditor in a case subject to the application;

(e) the recognised professional body which was the source of the outgoing office-holder’s authorisation (immediately before the application is made); or

(f) the Secretary of State.

(5) Where one or more of the outgoing office-holders in the schedule required by paragraph (8) is an administrator, an application may not be made unless the applicant is a person permitted to apply to replace the outgoing office-holder under section 13 or paragraph 63, 91 or 95 of Schedule B1 or such a person is joined as applicant in relation to the replacement of the outgoing office-holder.

(6) An applicant (other than the Secretary of State) must deliver a notice of the intended application to the Secretary of State on or before the date the application is made.

(7) The application must be served on—

(a) the outgoing office-holder (if not the applicant or deceased);

(b) any person who holds office jointly with the outgoing office-holder; and

(8) The application must contain a schedule setting out—

(a) identification details for the insolvency proceedings; and

(b) the capacity in which the outgoing office-holder was appointed.

(9) The application must be supported by evidence—

(a) setting out the circumstances as a result of which it is expedient to appoint a replacement office-holder; and

(b) exhibiting the consent to act of each person who is proposed to be appointed as replacement office-holder.

Action following application for a block transfer order

4.3

(1) In cases relating to the appointment of a supervisor of a CVA, in deciding to what extent (if any) the costs of making an application under rule 4.2 should be paid as an expense of the CVA proceedings to which the application relates, the factors to which the Court of Session must have regard include—

(a) the reasons for the making of the application;

(b) the number of cases to which the application relates;

(d) the nature and extent of the costs involved.

(2) Where an application relates to the appointment of an administrator and is made by a person under section 13 or paragraph 63, 91 or 95 of Schedule B1, the costs of making that application are to be paid as an expense of the administration to which the application relates unless the Court of Session directs otherwise.

(3) Notice of any appointment made under rule 4.2 must be delivered by the replacement office-holder—

(a) to the Secretary of State as soon as reasonably practicable; and

(b) to—

(i) the creditors in the first progress report following such appointment,

(ii) such other persons as the Court of Session may direct, in such manner as the court may direct.

PART 5 — DECISION MAKING

CHAPTER 1 — Application of Part

Application of Part

5.1

In this Part—

(a) Chapters 2 to 9 apply where the Act or these Rules require a decision to be made by a qualifying decision procedure or permit a decision to be made by the deemed consent procedure; and

(b) Chapter 10 applies to company meetings.

CHAPTER 2 — Decision procedures

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

Interpretation

5.2

(1) In these Rules—

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

“decision procedure” means a qualifying decision procedure prescribed by rule 5.3;

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

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

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

(2) The decision date is to be set at the discretion of the convener, but must be not less than 14 days from the date of delivery of the notice, except where the table in rule 5.11 requires a different period or the court directs otherwise.

The prescribed decision procedures

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

5.3 1 The following decision procedures are prescribed for the purpose of section 246ZE⁵⁹ by which a convener may seek a decision under the Act or these Rules from creditors— a correspondence; b electronic voting; c virtual meeting; d physical meeting; e any other decision making procedure which enables all creditors who are entitled to participate in the making of the decision to participate equally.

Electronic voting

5.4

Where the decision procedure uses electronic voting—

(a) the notice delivered to creditors in accordance with rule 5.8 must give them any necessary information as to how to access the voting system including any password required;

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

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

Virtual meetings

5.5

Where the decision procedure uses a virtual meeting the notice delivered to creditors in accordance with rule 5.8 must contain—

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

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

Physical meetings

5.6

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

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

(3) Where the prescribed proportion of creditors require a physical meeting the convener must summon the meeting by giving notice which complies with rule 5.8 so far as applicable and which must also contain a statement that the meeting may be suspended or adjourned by the chair of the meeting (and must be adjourned if it is so resolved at the meeting).

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

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

(6) The convener—

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

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

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

(8) For the purpose of determining whether the thresholds under section 246ZE(7) are met, the convener must calculate the value of the creditor’s debt by reference to rule 5.28.

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

5.7 1 This rule makes further provision about the deemed consent procedure to that set out in section 246ZF. 2 A notice seeking deemed consent must, in addition to the requirements of section 246ZF, comply with the requirements of rule 5.8 so far as applicable and must also contain— a a statement that in order to object to the proposed decision a creditor must have delivered a notice, stating that the creditor so objects, to the convener not later than the decision date together with a statement of claim and documentary evidence of debt in accordance with these Rules, failing which the objection will be disregarded; b a statement that it is the convener’s responsibility to aggregate any objections to see if the threshold is met for the decision to be taken as not having been made; and c a statement that if the threshold is met the deemed consent procedure will terminate without a decision being made and if a decision is sought again on the same matter it will be sought by a decision procedure. 3 In this rule, the threshold is met where the appropriate number of relevant creditors (as defined in section 246ZF(7)) have objected to the proposed decision. 4 For the purpose of aggregating objections, the convener may presume the value of relevant creditors’ claims to be the value of claims by those creditors who, in the convener’s view, would have been entitled to vote had the decision been sought by a decision procedure in accordance with this Part, even where those creditors had not already met the criteria for such entitlement to vote. 5 Rules 5.28, 5.29 and 5.30 apply to the admission or rejection of a claim for the purpose of the convener deciding whether or not an objection should count towards the total aggregated objections. 6 A decision of the convener on the aggregation of objections under this rule is subject to appeal under rule 5.32 as if it were a decision under Chapter 7 of this Part.

CHAPTER 3 — Notices, voting and venues for decisions

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

Notices to creditors of decision procedure

5.8

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

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

(3) The notice must contain the following—

(a) identification details for the insolvency proceedings;

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

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

(d) a statement of the decision date;

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

(f) a statement that a creditor whose debt is treated as a small debt in accordance with rule 3.118 must still deliver a statement of claim and documentary evidence of debt if that creditor wishes to vote;

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

(h) in the case of a decision in relation to a proposed CVA, a statement of the effects of the relevant provisions of the following—

(i) rule 5.26 about creditors’ voting rights,

(ii) rule 5.28 about the calculation of creditors’ voting rights, and

(iii) rule 5.31 about the requisite majority of creditors for making decisions;

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

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

(k) in the case of a meeting, a statement that, where applicable, a complaint may be made in accordance with rule 5.35 and the period within which such a complaint may be made; and

(l) a statement that a creditor may appeal a decision in accordance with rule 5.32, and the relevant period under rule 5.32 within which such an appeal may be made.

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

(5) Where the decision procedure is a meeting the notice must be accompanied by a blank proxy complying with rule 6.3.

(6) This rule does not apply if the court orders under rule 5.12 that notice of a decision procedure be given by advertisement only.

Voting in a decision procedure

5.9

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

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

(b) in the case of a vote cast by a creditor—

(i) in a CVA, be accompanied by written notification of the creditor’s debt unless such a notification has already been given to the convener;

(ii) in an administration, be accompanied by a statement of claim and documentary evidence of debt (where the requirement to provide the latter is not dispensed with under rule 5.26(2)) unless already given to the convener.

(2) In an administration, a vote must be disregarded if—

(a) a statement of claim and, where required, documentary evidence of debt are not received by the convener on or before the decision date or, in the case of a meeting, at or before the meeting (unless under rule 5.24 the chair is content to accept them before resumption of the adjourned meeting); or

(b) the convener decides, in the application of Chapter 7 of this Part, that the creditor is not entitled to cast the vote.

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

Venue for the decision procedure

5.10

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

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

5.11 1 Notices of decision procedures, and notices seeking deemed consent, must be delivered in accordance with the following table. ProceedingsDecisionsPersons to whom notice must be deliveredMinimum notice required administrationdecisions of creditorsthe creditors who had claims against the company at the date when the company entered administration (except for those who have subsequently been paid in full)14 daysproposed CVAdecisions of creditorsthe creditors7 days for a decision on proposed modifications to the proposal from the company’s directors under paragraph 31(7) of Schedule A1; 7 days for consideration of proposal where physical meeting requisitioned; in other cases, 14 daysmain proceedings in another member Stateapproval under Article 36(5) of the EU Regulation of proposed undertaking offered by a member State liquidatorall the local creditors in the United Kingdom14 days 2 This rule does not apply where the court orders under rule 5.12 that notice of a decision procedure be given by advertisement only.

Notice of decision procedure by advertisement only

5.12

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

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

(3) The advertisement must meet the requirements for a notice under rule 5.8(3), and must also state—

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

(b) the date of the court’s order.

Gazetting and advertisement

5.13

(1) In an administration, where a decision is being sought in a meeting the convener must gazette a notice stating—

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

(b) the venue for the meeting;

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

(2) The notice must also state—

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

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

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

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