The Insolvency (Amendment) Rules 1987

• Citation: S.I. 1987/1919
• Sections: 162

Section 1 Citation and commencement

These Rules may be cited as the Insolvency (Amendment) Rules 1987 and shall come into force on 11th January 1988, and that day is referred to in these Rules as “ the commencement date ”.

Section 2 Interpretation

(1) In these Rules references to “the principal Rules” are to the Insolvency Rules 1986 and a Rule or Schedule or Form referred to by number means the Rule or Schedule or Form so numbered in the principal Rules.

(2) These Rules shall be read and construed as one with the principal Rules.

Section 3 Application

(1) Subject to paragraph (2), the principal Rules have effect in relation to insolvency proceedings to which the principal Rules apply by virtue of Rule 13.14 with the amendments set out in the Schedule to these Rules.

(2) The principal Rules as so amended apply to all such proceedings on and after the commencement date whenever those proceedings were commenced.

(3) Rule 4.223-CVL as so amended also applies to any winding up as is mentioned in paragraph 4(1) of Schedule 11 to the Insolvency Act 1986 on and after the commencement date.

Section 1 Amendment of Rule 0.2

For Rule 0.2 there shall be substituted the following:—

Construction and interpretation

(0.2)

(1) In these Rules—

“the Act” means the Insolvency Act 1986 (any reference to a numbered section being to a section of that Act);

“the Companies Act” means the Companies Act 1985;

“the Rules” means the Insolvency Rules 1986.

(2) Subject to paragraph (1), Part 13 of the Rules has effect for their interpretation and application.

Section 2 Amendment of Rule 0.3

In paragraph (2) of Rule 0.3 there shall be inserted at the beginning the words “Rule 3.1 applies to all receivers to whom Part III of the Act applies and the remainder of”.

Section 3 Amendment of Rule 1.10

In subparagraph (a) of paragraph (1) of Rule 1.10 after the word “them” there shall be inserted the words “, with the addition, where the company is subject to an administration order, of the names and addresses of the company’s preferential creditors (defined in section 4(7)), with the amounts of their respective claims”.

Section 4 Amendment of Rule 1.12

In paragraph (3) of Rule 1.12 after the words “Rule 1.3” there shall be inserted the words “(and, where relevant, Rule 1.10)”.

Section 5 Amendment of Rule 1.20

In paragraph (1) of Rule 1.20 after the words “one-half” there shall be inserted the words “in value” and there shall be added the following subparagraph:—

The value of members is determined by reference to the number of votes conferred on each member by the company’s articles.

Section 6 Amendment of Rule 2.6

For subparagraph (a) of paragraph (2) of Rule 2.6 there shall be substituted the following:—

(a) on any person who has appointed, or is or may be entitled to appoint, an administrative receiver of the company;

Section 7 Insertion of Rule 2.6A

After Rule 2.6 there shall be inserted the following rule:—

Notice to sheriff, etc

(2.6A) The petitioner shall forthwith after filing the petition give notice of its presentation to—

(a) any sheriff or other officer who to his knowledge is charged with an execution or other legal process against the company or its property, and

(b) any person who to his knowledge has distrained against the company or its property.

Section 8 Amendment of Rule 2.7

(1) In paragraph (4) of Rule 2.7 there shall be inserted at the beginning the words “Subject to paragraph (4A),”.

(2) After paragraph (4) of Rule 2.7 there shall be inserted the following paragraph:—

(4A) In the case of a person who—

(a) is an authorised institution or former authorised institution within the meaning of the Banking Act 1987,

(b) has appointed, or is or may be entitled to appoint, an administrative receiver of the company, and

(c) has not notified an address for service,

the proper address is the address of an office of that person where, to the knowledge of the petitioner, the company maintains a bank account or, where no such office is known to the petitioner, the registered office of that person, or, if there is no such office, his usual or last known address.

Section 9 Amendment of Rule 2.9

For subparagraph (c) of paragraph (1) of Rule 2.9 there shall be substituted the following:—

(c) any person who has appointed, or is or may be entitled to appoint, an administrative receiver of the company;

Section 10 Amendment of Rule 2.10

For subparagraph (a) of paragraph (3) of Rule 2.10 there shall be substituted the following:—

(a) to any person who has appointed, or is or may be entitled to appoint, an administrative receiver of the company;

Section 11 Amendment of Rule 2.11

(1) In paragraph (1) of Rule 2.11 for the word “If” there shall be substituted the word “Where”.

(2) In paragraph (4) of Rule 2.11 for the words “instructions for” to the end there shall be substituted the words “the forms required for the preparation of the statement of affairs”.

Section 12 Amendment of Rule 2.16

(1) In Rule 2.16 the existing paragraph shall be numbered (1) and for subparagraph (f) of that paragraph there shall be substituted the following:—

(f) the manner in which the affairs and business of the company—

(i) have, since the date of the administrator’s appointment, been managed and financed, and

(ii) will, if the administrator’s proposals are approved, continue to be managed and financed; and

(2) In Rule 2.16 after the existing paragraph there shall be added the following paragraph:—

(2) Where the administrator intends to apply to the court under section 18 for the administration order to be discharged at a time before he has sent a statement of his proposals to creditors in accordance with section 23(1), he shall, at least 10 days before he makes such an application, send to all creditors of the company (so far as he is aware of their addresses) a report containing the information required by paragraph (1)(a)—(f)(i) of this Rule.

Section 13 Amendment of Rule 2.19

(1) In paragraph (4) of Rule 2.19 the words “At least 21 days'” shall be omitted.

(2) After paragraph (4) of Rule 2.19 there shall be inserted the following paragraph:—

(4A) Except in relation to a meeting summoned under section 23(1) or 25(2), at least 21 days' notice of the meeting shall be given.

Section 14 Amendment of Rule 2.28

(1) In paragraph (1) of Rule 2.28 there shall be inserted at the beginning the words “Subject to paragraph (1A),”.

(2) After paragraph (1) of Rule 2.28 there shall be inserted the following paragraph:—

(1A) Any resolution is invalid if those voting against it include more than half in value of the creditors to whom notice of the meeting was sent and who are not, to the best of the chairman’s belief, persons connected with the company.

Section 15 Amendment of Rule 2.29

For Rule 2.29 there shall be substituted the following:—

Reports and notices under sections 23 and 25

(2.29) Any report or notice by the administrator of the result of a creditors' meeting held under section 23 or 25 shall have annexed to it details of the proposals which were considered by the meeting and of the revisions and modifications to the proposals which were so considered.

Section 16 Amendment of Rule 2.33

For paragraph (2) of Rule 2.33 there shall be substituted the following:—

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

(2A) The administrator’s certificate of the committee’s due constitution shall not issue unless and until at least 3 of the persons who are to be members of the committee have agreed to act.

Section 17 Amendment of Rule 2.37

In paragraph (2) of Rule 2.37 there shall be added at the end the words “, and for this purpose any proxy or any authorisation under section 375 of the Companies Act in relation to any meeting of creditors of the company shall, unless it contains a statement to the contrary, be treated as a letter of authority to act generally signed by or on behalf of the committee-member”.

Section 18 Amendment of Rule 2.43

In paragraph (2) of Rule 2.43 for the words from “a statement incorporating” to the end there shall be substituted the words “a copy of any proposed resolution on which a decision is sought, which shall be set out in such a way that agreement with or dissent from each separate resolution may be indicated by the recipient on the copy so sent”.

Section 19 Insertion of Rule 2.46A

After Rule 2.46 there shall be inserted the following rule:—

Formal defects

(2.46A) The acts of the creditors' committee established for any administration are valid notwithstanding any defect in the appointment, election or qualifications of any member of the committee or any committee-member’s representative or in the formalities of its establishment.

Section 20 Amendment of Rule 2.47

For paragraph (7) of Rule 2.47 there shall be substituted the following:—

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

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

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

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

Section 21 Amendment of Rule 2.49

In paragraph (4) of Rule 2.49 after the word “appearing” in both places where it occurs there shall be inserted the words “or being represented”.

Section 22 Amendment of Rule 2.55

In Rule 2.55 for the words “original appointment of an administrator” there shall be substituted the words “administration order”.

Section 23 Amendment of Rule 3.1

For Rule 3.1 there shall be substituted the following:—

Acceptance and confirmation of acceptance of appointment

(3.1)

(1) Where two or more persons are appointed as joint receivers or managers of a company’s property under powers contained in an instrument, the acceptance of such an appointment shall be made by each of them in accordance with section 33 as if that person were a sole appointee, but the joint appointment takes effect only when all such persons have so accepted and is then deemed to have been made at the time at which the instrument of appointment was received by or on behalf of all such persons.

(2) Subject to the next paragraph, where a person is appointed as the sole or joint receiver of a company’s property under powers contained in an instrument, the appointee shall, if he accepts the appointment, within 7 days confirm his acceptance in writing to the person appointing him.

(3) Paragraph (2) does not apply where an appointment is accepted in writing.

(4) Any acceptance or confirmation of acceptance of appointment as a receiver or manager of a company’s property, whether under the Act or the Rules, may be given by any person (including, in the case of a joint appointment, any joint appointee) duly authorised for that purpose on behalf of the receiver or manager.

(5) In confirming acceptance the appointee or person authorised for that purpose shall state—

(a) the time and date of receipt of the instrument of appointment, and

(b) the time and date of acceptance.

Section 24 Amendment of Rule 3.2

In paragraph (2) of Rule 3.2 for the word “notice” there shall be substituted the words “notices sent to the company and the creditors”.

Section 25 Amendment of Rule 3.3

(1) In paragraph (1) of Rule 3.3 for the word “If” there shall be substituted the word “Where”.

(2) In paragraph (4) of Rule 3.3 for the words “instructions for” to the end there shall be substituted the words “the forms required for the preparation of the statement of affairs”.

Section 26 Omission of Rule 3.13

Rule 3.13 shall be omitted.

Section 27 Amendment of Rule 3.17

For paragraph (2) of Rule 3.17 there shall be substituted the following:—

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

(2A) The receiver’s certificate of the committee’s due constitution shall not issue unless and until at least 3 of the persons who are to be members of the committee have agreed to act.

Section 28 Amendment of Rule 3.21

In paragraph (2) of Rule 3.21 there shall be added at the end the words “, and for this purpose any proxy or any authorisation under section 375 of the Companies Act in relation to any meeting of creditors of the company shall, unless it contains a statement to the contrary, be treated as a letter of authority to act generally signed by or on behalf of the committee-member”.

Section 29 Amendment of Rule 3.27

In paragraph (2) of Rule 3.27 for the words from “a statement incorporating” to the end there shall be substituted the words “a copy of any proposed resolution on which a decision is sought, which shall be set out in such a way that agreement with or dissent from each separate resolution may be indicated by the recipient on the copy so sent”.

Section 30 Insertion of Rule 3.30A

After Rule 3.30 there shall be inserted the following rule:—

Formal defects

(3.30A) The acts of the creditors' committee established for any administrative receivership are valid notwithstanding any defect in the appointment, election or qualifications of any member of the committee or any committee-member’s representative or in the formalities of its establishment.

Section 31 Amendment of Rule 3.33

In paragraph (1) of Rule 3.33:—

(a) the word “and” shall be omitted at the end of subparagraph (a), and

(b) there shall be added at the end of subparagraph (b) the words:—

, and

(c) in any case, to the members of the creditors' committee (if any)

Section 32 Amendment of Rule 3.34

In Rule 3.34:—

(a) the word “and” shall be omitted at the end of subparagraph (a), and

(b) there shall be added at the end of subparagraph (b) the words:—

, and

(c) in any case, to the members of the creditors' committee (if any)

Section 33 Amendment of Rule 3.35

In paragraph (1) of Rule 3.35 for subparagraph (a) there shall be substituted the following:—

(a) to the company or, if it is in liquidation, the liquidator, and

and in subparagraph (b) the words “in any case,” shall be omitted.

Section 34 Amendment of Rule 4.1

(1) For paragraph (1) of Rule 4.1 there shall be substituted the following:—

(1) In a members' voluntary winding up, the Rules in this Part do not apply, except as follows—

(a) Rule 4.3 applies in the same way as it applies in a creditors' voluntary winding up;

(b) Rule 4.72 (additional provisions concerning meetings in relation to Bank of England and Deposit Protection Board) applies in the winding up of authorised institutions or former authorised institutions within the meaning of the Banking Act 1987, whether members' or creditors' voluntary or by the court;

(c) Chapters 9 (proof of debts in a liquidation), 10 (secured creditors), 15 (disclaimer) and 18 (special manager) apply wherever, and in the same way as, they apply in a creditors' voluntary winding up;

(d) Section F of Chapter 11 (the liquidator) applies only in a members' voluntary winding up, and not otherwise;

(e) Section G of that Chapter (court’s power to set aside certain transactions; rule against solicitation) applies in any winding up, whether members' or creditors' voluntary or by the court;

(f) Rule 4.182A applies only in a members' voluntary winding up, and not otherwise; and

(g) Rule 4.223-CVL (liquidator’s statements) applies in the same way as it applies in a creditors' voluntary winding up.

(2) After the words “creditors' voluntary” in line 3 of paragraph (2) of Rule 4.1 there shall be inserted the words “winding up”.

(3) In paragraph (3) of Rule 4.1—

(a) after the line beginning “Chapter 19” there shall be inserted in a separate line the words “Chapter 11 (Section F)—The liquidator in a members' voluntary winding up;”; and

(b) there shall be added at the end in a separate line the words “Chapter 21 (Section C)—Dissolution after winding up”.

Section 35 Amendment at head of Rule 4.2

At the head of Rule 4.2 there shall be inserted the words “(NO CVL APPLICATION)”.

Section 36 Amendment of Rule 4.7

(1) In subparagraph (e) of paragraph (4) of Rule 4.7 for the words from “(i) a recognised bank” to “were licensed” there shall be substituted the words “an authorised institution or former authorised institution within the meaning of the Banking Act 1987”.

(2) After paragraph (6) of Rule 4.7 there shall be added the following paragraphs:—

(7) Where a petition is filed at the instance of a company’s administrator the petition shall—

(a) be expressed to be the petition of the company by its administrator,

(b) state the name of the administrator, the number of the petition on which the administration order was made and the date of that order, and

(c) contain an application under section 18 requesting that the administration order be discharged and that the court make any such order consequential upon that discharge as it thinks fit.

(8) Any petition filed in relation to a company in respect of which there is in force an administration order or a voluntary arrangement under Part I of the Act shall be presented to the court which made the administration order or, as the case may be, to which the nominee’s report under section 2 was submitted.

(9) Any petition such as is mentioned in paragraph (7) above or presented by the supervisor of a voluntary arrangement under Part I of the Act in force for the company shall be treated as if it were a petition filed by contributories, and Chapter 4 in this Part of the Rules shall apply accordingly.

(10) Where a petition contains a request for the appointment of a person as liquidator in accordance with section 140 (appointment of former administrator or supervisor as liquidator) the person whose appointment is sought shall, not less than 2 days before the return day for the petition, file in court a report including particulars of—

(a) a date on which he notified creditors of the company, either in writing or at a meeting of creditors, of the intention to seek his appointment as liquidator, such date to be at least 10 days before the day on which the report under this paragraph is filed, and

(b) details of any response from creditors to that notification, including any objections to his appointment.

Section 37 Amendment of Rule 4.8

(1) For paragraph (4) of Rule 4.8 there shall be substituted the following:—

(4) If for any reason service at the registered office is not practicable, or the company has no registered office or is an unregistered company, the petition may be served on the company by leaving it at the company’s last known principal place of business in such a way that it is likely to come to the attention of a person attending there, or by delivering it to the secretary or some director, manager or principal officer of the company, wherever that person may be found.

(2) In paragraph (6) of Rule 4.8 after the words “the court may” there shall be inserted the words “approve or”.

Section 38 Amendment of Rule 4.10

In paragraph (4) of Rule 4.10 for the words from “a recognised bank” to “were a licensed institution” there shall be substituted the words “an authorised institution or former authorised institution within the meaning of the Banking Act 1987”.

Section 39 Insertion of Rule 4.21A

After Rule 4.21 there shall be inserted the following rule:—

Expenses of voluntary arrangement

(4.21A) Where a winding-up order is made and there is at the time of the presentation of the petition in force for the company a voluntary arrangement under Part I of the Act, any expenses properly incurred as expenses of the administration of the arrangement in question shall be a first charge on the company’s assets.

Section 40 Amendment of Rule 4.22

(1) In paragraph (1) of Rule 4.22 the words “and the nature of the relief which is sought by the petitioner,” shall be omitted.

(2) After paragraph (1) of Rule 4.22 there shall be inserted the following paragraph:—

(1A) No petition shall be filed unless there is produced with it the receipt for the deposit payable on presentation.

Section 41 Amendment of Rule 4.24

(1) In Rule 4.24 the word “and” at the end of the line beginning “Rule 4.20” shall be omitted.

(2) At the end of Rule 4.24 there shall be added the words:—

; and

Rule 4.21A (expenses of voluntary arrangement)

Section 42 Insertion of Rule 4.25A

After Rule 4.25 there shall be inserted the following rule:—

Notice of appointment

(4.25A)

(1) Where a provisional liquidator has been appointed the court shall forthwith give notice of the fact to the official receiver.

(2) A copy of that notice shall at the same time be sent by the court to the provisional liquidator where he is not the official receiver.

Section 43 Amendment of Rule 4.30

(1) In paragraph (3) of Rule 4.30 for the words from the beginning to “accordingly)” there shall be substituted the words:—

Without prejudice to any order the court may make as to costs, the provisional liquidator’s remuneration (whether the official receiver or another) shall be paid to him, and the amount of any expenses incurred by him (including the remuneration and expenses of any special manager appointed under section 177) reimbursed—

if a winding-up order is not made, out of the property of the company

(2) After paragraph (3) of Rule 4.30 there shall be inserted the following paragraph:—

(3A) Unless the court otherwise directs, in a case falling within paragraph (3)(a) above the provisional liquidator may retain out of the company’s property such sums or property as are or may be required for meeting his remuneration and expenses.

Section 44 Amendment of Rule 4.31

Paragraph (3) of Rule 4.31 shall be omitted.

Section 45 Amendment of Rule 4.34-CVL

For paragraph (3) of Rule 4.34-CVL there shall be substituted the following:—

(3) Where it is made out by the directors under section 99(1) the statement of affairs shall be delivered by them to the liquidator in office following the creditors' meeting summoned under section 98 forthwith after that meeting has been held; and he shall, within 7 days, deliver it to the registrar of companies.

(4) A statement of affairs under section 99(1) may be made up to a date not more than 14 days before that on which the resolution for voluntary winding up is passed by the company.

Section 46 Insertion of Rule 4.34A-CVL

After Rule 4.34-CVL there shall be inserted the following rule:—

Copy statement of affairs

(4.34A-CVL)

Where a liquidator is nominated by the company at a general meeting held on a day prior to that on which the creditors' meeting summoned under section 98 is held, the directors shall forthwith after his nomination or the making of the statement of affairs, whichever is the later, deliver to him a copy of the statement of affairs.

Section 47 Amendment of Rule 4.43

In Rule 4.43 the existing paragraph shall be numbered “(1)” and there shall be added after it the following paragraph:—

(2) The official receiver shall file in court a copy of any report sent under this Chapter.