The Building Society Insolvency (England and Wales) Rules 2010

• Citation: S.I. 2010/2581
• Sections: 286

Section 1 Citation and commencement

These Rules may be cited as the Building Society Insolvency (England and Wales) Rules 2010 and come into force on 15th November 2010.

Section 2 Extent

These Rules extend to England and Wales only.

Section 3 Application of Rules, construction and interpretation

(1) These Rules apply in relation to a building society undergoing the procedure in Part 2 of the Banking Act 2009 , as applied and modified by section 90C of the Building Societies Act 1986 and by any order made under section 130 of the Banking Act, known as building society insolvency.

(2) In these Rules—

“the 1986 Rules” means the Insolvency Rules 1986 including all amendments to them up to and including those made by the Insolvency (Amendment)(No. 2) Rules 2009 ;

“the 2009 Order” means the Building Societies (Insolvency and Special Administration) Order 2009;

“the 2010 Rules” mean these Rules;

“the Banking Act” means the Banking Act 2009;

“the Building Societies Act” means the Building Societies Act 1986;

“ building society ” means a building society incorporated under the Building Societies Act;

“ building society insolvency ”, “ building society insolvency order ” and “ building society liquidator ” have the same meaning as in the Building Societies Act (see section 90C(2));

“ contributory ”, in relation to a building society and subject as provided in rule 40—

means every person liable to contribute to the assets of the society in the event of its being wound up, and

for the purposes of all proceedings for determining, and all proceedings prior to the determination of, the persons who are deemed to be contributories, includes any person alleged to be a contributory, and

includes persons who are liable to pay or contribute to the payment of any debt or liability of the building society, or any sum for the adjustment of rights of members among themselves, or the expenses of the winding up,

but does not include persons liable to contribute by virtue of a declaration by the court under section 213 (fraudulent trading) or 214 (wrongful trading) of the Insolvency Act;

“CPR” means the Civil Procedure Rules 1998 ;

“ eligible depositor ” means a depositor who is eligible for compensation under the FSCS;

“the FSA” means the Financial Services Authority;

“the FSCS” means the Financial Services Compensation Scheme (established under Part 15 of the Financial Services and Markets Act 2000 ) or, where appropriate, the scheme manager of that scheme;

“the Insolvency Act” means the Insolvency Act 1986 ;

“ liquidation committee ” means the committee established pursuant to section 100 of the Banking Act;

“ Objective 1 ” has the same meaning as in Part 2 of the Banking Act (see section 99(2));

“ personal service ” has the meaning given in Part 6 of the CPR;

“ principal office ” means—

the place which is specified in the building society’s memorandum sent to the FSA under paragraph 1(1)(c) of Schedule 2 to the Building Societies Act as the address of its principal office; or

if notice has been given by the building society to the FSA under paragraph 11(2) of that Schedule (change of principal office), the place specified in that notice or, as the case may be, in the last such notice;

“ registered name ” in relation to a building society means the name of the society which is for the time being registered with the FSA; and

“ sealed ” means sealed with the seal of the court under which the application was made.

(3) Other expressions used in these Rules, where used in relation to building societies, have the same meaning as in the Building Societies Act.

(4) In these Rules—

(a) any reference to Part 2 of the Banking Act (Bank Insolvency), or to any provision in that Part, is a reference to that Part or provision as applied and modified by section 90C of the Building Societies Act and by any order made under section 130 of the Banking Act;

(b) any reference to any provision of the Insolvency Act that is not applied by Part 2 of the Banking Act, is a reference to that provision as applied and modified by section 90A of, and Schedule 15A to, the Building Societies Act;

(c) any reference to any provision of the Insolvency Act which is applied by Part 2 of the Banking Act is a reference to that provision as applied and modified by section 90C of the Building Societies Act and by any order made under section 130 of the Banking Act.

(5) These Rules consist of—

(a) the rules set out in full;

(b) in the case of a rule applying a rule in Part 4, 7, 8, 9, 11, 12 or 13 of the 1986 Rules, the rule so applied with—

(i) the modifications set out in paragraph (6),

(ii) the modifications contained in the rule applying it, and

(iii) any other necessary modification;

(c) the Schedule, which applies the relevant schedules of the 1986 Rules.

(6) The modifications are that where applicable, a reference to—

(a) any provision of the Insolvency Act that is applied by Part 2 of the Banking Act is a reference to that provision as applied and modified by section 90C of the Building Societies Act and by any order made under section 130 of the Banking Act;

(b) any provision of the Insolvency Act that is not applied by Part 2 of the Banking Act is a reference to that provision as applied and modified by section 90A of, and Schedule 15A to, the Building Societies Act;

(c) the 1986 Rules (or “the Rules”) is a reference to these Rules;

(d) an affidavit is a reference to a witness statement;

(e) ex parte is a reference to without notice;

(f) the commencement of winding up is a reference to the commencement of building society insolvency;

(g) the chairman is a reference to the chair;

(h) a company is a reference to a building society;

(i) going into liquidation is a reference to entering building society insolvency;

(j) insolvency proceedings is a reference to building society insolvency proceedings;

(k) the official receiver should be ignored unless otherwise stated;

(l) a petition for winding up is a reference to an application for building society insolvency under section 95 of the Banking Act;

(m) a petitioner is a reference to an applicant;

(n) the provisional liquidator is a reference to the provisional building society liquidator;

(o) winding up is a reference to building society insolvency;

(p) winding up by the court is a reference to a building society being placed into building society insolvency by the court;

(q) a winding–up order is a reference to a building society insolvency order;

(r) the registered office is a reference to the principal office within the meaning of these Rules;

(s) the articles is a reference to the rules of the building society;

(t) the officers, or a particular officer of a company, is a reference to the officers, or the corresponding officer, of the building society and includes a person holding themself out as such an officer;

(u) the registrar of companies or the registrar is a reference to the FSA;

(v) contributory is a reference to a contributory in relation to a building society within the meaning of these Rules.

(7) Expressions used—

(a) both in a rule set out in full and in Part 2 of the Banking Act, or

(b) both in a modification to a rule from the 1986 Rules applied by these Rules and in Part 2 of the Banking Act,

have the same meaning as in Part 2 of the Banking Act.

(8) Expressions used—

(a) both in a rule set out in full and in the Building Societies Act, or

(b) both in a modification to a rule from the 1986 Rules applied by these Rules and in the Building Societies Act,

have the same meaning as in the Building Societies Act.

(9) Where a rule applies a rule of the 1986 Rules and modifies that rule by inserting or substituting text—

(a) any reference in the modified rule to the 2010 Rules is a reference to these Rules;

(b) expressions inserted or substituted have the same meaning as in these Rules.

(10) Where a rule in the 1986 Rules (Rule A) contains a reference to another such rule (Rule B) and—

(a) both Rule A and Rule B are applied by these Rules, or

(b) Rule A is applied by and the provision in Rule B to which Rule A refers is substantially repeated in these Rules,

the reference in Rule A shall be treated, for the purpose of these Rules, as being, respectively, to the rule in these Rules that applies Rule B or the provision in these Rules that substantially repeats the provision in Rule B.

(11) Where a rule (Rule A) refers to another rule (Rule B), and Rule B applies a rule of the 1986 Rules (Rule C) with or without modifications, the reference in Rule A includes a reference to Rule C as applied by Rule B.

(12) Any notice or document required to be sent electronically pursuant to these Rules shall be treated as having been sent to the person if—

(a) it is sent by email to the person’s last known email address, and

(b) the email contains a prompt asking the person for an electronic receipt saying that the email has been read.

(13) Where these Rules provide for a witness statement (either expressly, or through the application of the 1986 Rules as modified above)—

(a) that statement is a reference to a witness statement verified by a statement of truth in accordance with Part 22 of the CPR, and

(b) if the statement is made by the building society liquidator or provisional building society liquidator, the statement should state as such and should include the address at which that person works.

Section 4 Overview

The purpose of these Rules is to provide a procedure for the appointment of a building society liquidator and the operation of building society insolvency under Part 2 of the Banking Act in England and Wales.

Section 5 Forms

(1) This rule applies where a provision of these rules—

(a) applies a provision of the 1986 Rules which requires the use of a prescribed form, or

(b) makes provision similar to that made by a provision of those Rules which requires the use of a prescribed form.

(2) The form prescribed for the purposes of those Rules is to be used with any modification that the person using the form thinks desirable to reflect the nature of building society insolvency (whether or not the modification is set out in a Practice Form issued by the Treasury for that purpose).

Section 6 Time limits

(1) Where by any provision of the Insolvency Act, the Banking Act or these Rules, the time for doing anything is limited, the court may extend the time, either before or after it has expired, on such terms, if any, as it thinks fit.

(2) If the court’s consideration of whether to extend the time for doing anything takes place before a full payment resolution has been passed, the court shall only extend the time if it considers that the resulting delay will not significantly prejudice the achievement of Objective 1.

Section 7 Filing of application

(1) The application for a building society insolvency order, verified by witness statement in accordance with rule 11, shall be filed in court.

(2) There shall be filed with the application—

(a) one copy for service on the building society,

(b) one copy to be attached to the proof of service, and

(c) further copies to be sent to the persons under rule 10.

(3) The court shall fix the venue, date and time for the hearing of the application and in doing so shall have regard to—

(a) the desirability of the application being heard as soon as is reasonably practicable, and

(b) the need to give the building society a reasonable opportunity to attend.

(4) Each of the copies issued to the applicant shall be sealed and be endorsed with the venue, date and time for the hearing.

(5) Any application filed in relation to a building society in respect of which there is in force a voluntary arrangement under Part 1 of the Insolvency Act shall be filed in accordance with this rule, but a copy of that application shall also be sent to the court to which the nominee’s report under section 2 of the Insolvency Act was submitted, if that is not the same court.

Section 8 Service of application

(1) The applicant shall serve the building society with a sealed copy of the application.

(2) The application shall be served on the building society at its principal office.

(3) Service of the application at the principal office may be effected in any of the following ways—

(a) it may be handed to a person who there and then acknowledges that they are, or, to the best of the server’s knowledge, information and belief, are, a director or other officer, or employee, of the building society, or

(b) it may be handed to a person who there and then acknowledges that they are authorised to accept service of documents on the building society’s behalf, or

(c) in the absence of such person as is mentioned in sub-paragraphs (a) and (b), it may be deposited at or about the principal office in such a way that it is likely to come to the notice of a person attending the office.

(4) If for any reason it is impracticable to effect service as provided by paragraph (2) or (3), the application may be served in such other manner as the court may approve or direct.

(5) Application for permission of the court under paragraph (4) may be made without notice to the building society, stating in a witness statement what steps have been taken to comply with paragraph (2) or (3), and the reasons why it is impracticable to effect service as there provided.

(6) If the building society or its legal representatives fail to attend the hearing, the court may make the building society insolvency order in its absence if satisfied that the application has been served in accordance with this rule.

Section 9 Proof of service

Apply rule 4.9 of the 1986 Rules.

Section 10 Other persons to receive copy of application

(1) The applicant shall send two copies of the application to—

(a) the proposed building society liquidator,

(b) the Bank of England (if it is not the applicant),

(c) the FSA (if it is not the applicant),

(d) the FSCS,

(e) any person who has given notice to the FSA in respect of the building society under section 90D of the Building Societies Act ,

(f) if there is in force for the building society a voluntary arrangement under Part 1 of the Insolvency Act, the supervisor of that arrangement, and

(g) if an administrative receiver has been appointed in relation to the building society, that receiver,

in accordance with paragraph (2).

(2) One copy shall be sent electronically as soon as practicable and the other (a sealed copy) shall be sent by first class post on the business day on which the application is served on the building society.

(3) Any of the persons in sub-paragraph (1) will have the right to attend and be heard at the hearing of the application.

Section 11 Verification of application

(1) This applies where an application has been filed in court under rule 7.

(2) A witness statement shall be attached to the application to state that the statements in the application are true, or are true to the best of the applicant’s knowledge, information and belief.

(3) The witness statement shall identify the person making the statement and shall include the capacity in which that person makes the statement and the basis for that person’s knowledge of the matters set out in the application.

(4) The witness statement is, unless proved otherwise, evidence of the statements in the application.

Section 12 Persons entitled to copy of application

(1) Every contributory or creditor of the building society is entitled to a copy of the application on request from the applicant.

(2) The applicant shall respond to any request for a copy of the application as soon as reasonably practicable after the application has been made on payment of the appropriate fee.

Section 13 Certificate of compliance

(1) Apply rule 4.14 of the 1986 Rules.

(2) In paragraph (1) the period for filing shall be as soon as reasonably practicable before the hearing of the application.

(3) In paragraph (2) , leave out the words “a copy or” to the end.

(4) After paragraph (2) insert—

(2A) A witness statement made by the proposed building society liquidator to the effect that—

(a) the person is qualified to act as an insolvency practitioner in accordance with section 390 of the Insolvency Act, and

(b) the person consents to act as the building society liquidator,

shall be filed in court with the certificate.

Section 14 Leave for the applicant to withdraw

Apply rule 4.15 of the 1986 Rules. Leave out “at least 5 days” and ignore sub–paragraph (a).

Section 15 Witness statement in opposition

(1) If the building society intends to oppose an application, the building society may (but need not) file a witness statement in opposition in court.

(2) A statement under paragraph (1) must be filed before the hearing of the application and a copy must be served on the applicant, before the hearing.

(3) The statement may be served on the applicant by personal service or by electronic means.

(4) The statement should also be sent to the persons in rule 10(1) before the hearing.

(5) The fact that the building society has not filed a statement under this rule shall not prevent the building society from being heard at the hearing.

Section 16 Making, transmission and advertisement of order

(1) The court shall not make a building society insolvency order unless the person nominated to be appointed as the building society liquidator in the application for the order has filed in court a witness statement under rule 13.

(2) When the building society insolvency order has been made the court shall immediately send five sealed copies (or such larger number as the building society liquidator may have requested) to the building society liquidator.

(3) The court shall also, if practicable, immediately send a copy of the order to the building society liquidator electronically.

(4) The building society liquidator shall serve a sealed copy of the order on the building society at its principal office and, where the building society liquidator knows the building society’s email address, shall send an electronic copy to the building society.

(5) The building society liquidator shall send two copies of the order to—

(a) the Bank of England,

(b) the FSA,

(c) the FSCS,

(d) if there is in force for the building society a voluntary arrangement under Part 1 of the Insolvency Act, the supervisor of that arrangement, and

(e) if an administrative receiver has been appointed in relation to the building society, that administrative receiver,

in accordance with paragraph (6).

(6) One copy shall be sent electronically as soon as practicable and the other (a sealed copy) shall be sent by first class post on the business day on which the order is served on the building society.

(7) The building society liquidator—

(a) shall cause notice of the order to be gazetted as soon as reasonably practicable , and

(b) may advertise notice of the order in such other manner as the building society liquidator thinks fit.

Section 17 Authentication of building society liquidator’s appointment

A sealed copy of the court’s order may in any proceedings be adduced as proof that the person appointed is duly authorised to exercise the powers and perform the duties of the building society liquidator in the building society insolvency.

Section 18 Initial duties of building society liquidation committee

(1) As soon as reasonably practicable after the making of a building society insolvency order, the liquidation committee shall meet the building society liquidator for the purpose of discussing which of the objectives, or combination of objectives, mentioned in section 102(1) of the Banking Act, the committee should recommend the building society liquidator to pursue.

(2) If the building society liquidator and every individual on the liquidation committee agree, the meeting may be held by audio or video conference.

(3) The liquidation committee shall make its recommendation to the building society liquidator at the meeting.

(4) The Bank of England shall confirm the liquidation committee’s recommendation in writing as soon as practicable after the meeting.

(5) As soon as practicable after the making of a building society insolvency order, the liquidation committee shall also pass a resolution as to the terms on which, in accordance with rule 99, the building society liquidator is to be remunerated.

(6) Until a full payment resolution has been passed, the building society liquidation committee—

(a) shall take decisions and pass resolutions by a simple majority, and

(b) for the purpose of taking decisions and passing resolutions, may communicate by any means that its members consider convenient.

Section 19 Expenses of voluntary arrangement

Apply rule 4.21A of the 1986 Rules .

Section 20 Appointment of provisional building society liquidator

(1) An application to the court for the appointment of a provisional building society liquidator under section 135 of the Insolvency Act may be made—

(a) by the Bank of England,

(b) by the FSA (with the consent of the Bank of England).

(2) The application must be supported by a witness statement stating—

(a) the grounds upon which it is proposed that the provisional building society liquidator should be appointed,

(b) that the person to be appointed has consented to act,

(c) that the person to be appointed is qualified to act as an insolvency practitioner,

(d) whether to the applicant’s knowledge—

(i) there has been proposed or is in force for the building society a voluntary arrangement under Part 1 of the Insolvency Act, or

(ii) an administrative receiver is acting in relation to the building society,

(e) the applicant’s estimate of the value of the assets in respect of which the provisional building society liquidator is to be appointed, and

(f) the functions the applicant wishes to be carried out by the provisional building society liquidator in relation to the building society’s affairs.

(3) The court may on the application, if satisfied that sufficient grounds are shown for the appointment, make it on such terms as it thinks fit.

Section 21 Notice of appointment

(1) Where a provisional building society liquidator has been appointed, the court shall notify the applicant and the person appointed.

(2) Unless the court otherwise directs, on receipt of the notification under paragraph (1), the provisional liquidator shall give notice of that appointment as soon as reasonably practicable. Such notice—

(a) shall be gazetted, and

(b) may be advertised in such other manner as the provisional liquidator thinks fit.

Section 22 Order of appointment

(1) The order of appointment shall specify the functions to be carried out by the provisional building society liquidator in relation to the building society’s affairs.

(2) The court shall, immediately after the order is made, send four sealed copies of the order (or such larger number as the provisional building society liquidator may have requested), to the provisional building society liquidator.

(3) The court shall also, if practicable, immediately send a copy of the order to the provisional building society liquidator electronically.

(4) The provisional building society liquidator shall serve a sealed copy of the order on the building society at its principal office and, where the provisional building society liquidator knows the building society’s email address, shall send an electronic copy to the building society.

(5) The provisional building society liquidator shall send two copies of the order to—

(a) the Bank of England,

(b) the FSA,

(c) the FSCS,

(d) if there is in force for the building society a voluntary arrangement under Part 1 of the Insolvency Act, the supervisor of that arrangement, and

(e) if an administrative receiver has been appointed in relation to the building society, that administrative receiver,

in accordance with paragraph (6).

(6) One copy shall be sent electronically as soon as practicable and the other (a sealed copy) shall be sent by first class post on the business day on which the order is served on the building society.

Section 23 Security

Apply rule 4.28 of the 1986 Rules .

Section 24 Failure to give or keep up security

Apply rule 4.29 of the 1986 Rules.

Section 25 Remuneration

Apply rule 4.30 of the 1986 Rules. Ignore paragraph (4).

Section 26 Termination of appointment

(1) Apply rule 4.31 of the 1986 Rules .

(2) After paragraph (2) insert—

(2A) On the making of a building society insolvency order the appointment of the provisional building society liquidator shall terminate.

Section 27 Notice requiring statement of affairs

(1) Apply rule 4.32 of the 1986 Rules. For “official receiver”, substitute “building society liquidator”.

Section 28 Verification and filing

(1) Apply rule 4.33 of the 1986 Rules. For “official receiver” substitute “building society liquidator”.

(2) For paragraph (6), substitute—

(6) The building society liquidator shall file the statement of affairs in court and shall send a copy of it to the FSA.

(3) Ignore paragraph (7).

Section 29 Limited disclosure

(1) Apply rule 4.35 of the 1986 Rules. In paragraph (1), for “official receiver”, substitute “building society liquidator”.

(2) After paragraph (1), insert—

(1A) The building society liquidator may also apply to the court for an order of limited disclosure in respect of those depositors of the building society who, at the time of the making of the statement of affairs, still have a claim against the building society in respect of their deposits.

Section 30 Release from duty to submit statement of affairs; extension of time

Apply rule 4.36 of the 1986 Rules . For “official receiver” substitute “building society liquidator.”

Section 31 Expenses of statement of affairs

Apply rule 4.37 of the 1986 Rules . For “official receiver”, substitute “building society liquidator”.

Section 32 Submission of accounts

Apply rule 4.39 of the 1986 Rules. For “official receiver”, substitute “building society liquidator”.

Section 33 Further disclosure

Apply rule 4.42 of the 1986 Rules. For “official receiver”, substitute “building society liquidator”.

Section 34 Report by building society liquidator

(1) The building society liquidator shall, at least once after the making of the building society insolvency order, make a report with respect to the proceedings in the building society insolvency and the state of the building society’s affairs.

(2) Regardless of whether the liquidation committee has passed a full payment resolution, the first report under paragraph (1) shall be, within eight weeks of the commencement of the building society insolvency, made publicly available on the building society’s website and the building society liquidator shall send a copy of it to any creditor or contributory on request .

(3) The building society liquidator shall include in the report under paragraph (1)—

(a) a statement that the proceedings are being held in the High Court and the relevant court reference number;

(b) the full registered name of the building society, any other trading names of the building society, and the address of its principal office;

(c) details relating to the building society liquidator’s appointment, including the date of appointment, and, where there are joint liquidators, details of—

(i) which functions (if any) are to be exercised by the persons appointed acting jointly, and

(ii) which functions (if any) are to be exercised by any or all of the persons appointed;

(d) the names of the directors, chief executive and secretary of the building society and details of any shares in the building society that they have;

(e) an account of the circumstances giving rise to the building society insolvency;

(f) if a statement of affairs has been submitted, a copy of that statement;

(g) if a statement of affairs has yet to be submitted—

(i) the names, addresses and details of any debts owed to the creditors, including details of any security held (or, in the case of depositors who are still creditors of the building society at the time the report is made, a single statement of their aggregate debt),

(ii) details of the shares issued by the society (including the types of shares issued and the number of each type in issue), and

(iii) details of the financial position of the building society at the latest practicable date (which must, unless the court orders otherwise, be a date not earlier than the commencement of building society insolvency);

(h) the basis upon which it has been proposed under rule 42, or, if the full payment resolution has yet to be passed, rule 18, that the building society liquidator’s remuneration be fixed;

(i) to the best of the building society liquidator’s knowledge and belief—

(i) an estimate of the value of the prescribed part (within the meaning of section 176A of the Insolvency Act) regardless of whether—

(aa) the building society liquidator proposes to make an application to the court under section 176A(5) of that Act, or

(bb) section 176A(3) of that Act applies, and

(ii) an estimate of the value of the building society’s net property;

(j) whether, and if so, why, the building society liquidator proposes to make an application to court under section 176A(5) of the Insolvency Act;

(k) a summary of —

(i) how Objective 1 is being or has been achieved and an estimate of the costs to the building society liquidator of achieving it,

(ii) the manner in which the affairs and business of the building society not involved in the achievement of Objective 1 have, since the commencement of the building society insolvency, been managed and financed, including, where any assets have been disposed of, the reasons for such disposals and the terms upon which such disposals were made, and

(iii) how the affairs and business of the building society will continue to be managed and financed; and

(l) an explanation of how it is envisaged the objectives of the building society liquidator will be achieved, including whether a dividend will be paid, an estimate as to the amount of this dividend, and how it is proposed that the building society liquidation shall end.

(4) Nothing in this rule is to be taken as requiring either estimate mentioned in paragraph (3)(i) to include any information the disclosure of which could seriously prejudice the commercial interests of the building society. If such information is excluded from the calculation the estimate shall be accompanied by a statement to that effect.

(5) The building society liquidator shall file with the court a copy of any report sent under this rule.

Section 35 Meaning of “creditors”

Apply rule 4.44 of the 1986 Rules.

Section 36 Report where statement of affairs lodged

Apply rule 4.45 of the 1986 Rules . For “official receiver”, substitute “building society liquidator”.

Section 37 Statement of affairs dispensed with

Apply rule 4.46 of the 1986 Rules. For “official receiver”, substitute “building society liquidator”.

Section 38 General rule as to reporting

Apply rule 4.47 of the 1986 Rules. For “official receiver”, substitute “building society liquidator”.

Section 39 Building society insolvency stayed

Apply rule 4.48 of the 1986 Rules. For “official receiver”, substitute “building society liquidator”.

Section 40 Meaning of “contributories”

For the purposes of this Part, “ contributories ” does not include the borrowing members of the society (see paragraph 5(2) of Schedule 2 to the Building Societies Act).

Section 41 First meeting

(1) Once the liquidation committee passes a full payment resolution the building society liquidator shall—

(a) immediately summon a meeting of the building society’s creditors and a meeting of the building society’s contributories, and

(b) fix a venue, date and time for the meetings,

and the date must be within three months of the date on which the full payment resolution was passed.

(2) When the venue, date and time of the meetings have been fixed the building society liquidator shall give notice of the meetings to—

(a) the court,

(b) every creditor who is known to the building society liquidator or is identified in the building society’s statement of affairs,

(c) every person appearing (by the building society’s books or otherwise) to be a contributory of the building society, and

(d) each member of the liquidation committee.

(3) The building society liquidator—

(a) shall gazette the notice of the meeting as soon as reasonably practicable, and

(b) may advertise it in such other manner as the building society liquidator thinks fit.

(4) In giving the notice mentioned in paragraph (2) the building society liquidator shall, if practicable, indicate whether the present intention of the FSCS is to resign from the liquidation committee at the meeting.

(5) Notice to the court and the members of the liquidation committee shall be given immediately; notice to creditors and contributories shall be given, and the advertisements placed to appear, at least 21 days before the date fixed for the meeting.

(6) The notice to creditors shall specify a time and date, not more than four days before the date fixed for the meeting, by which they must lodge proofs and (if applicable) proxies, in order to be entitled to vote at the meeting.

(7) The FSCS is entitled to be represented at the meeting and Schedule 1 to the 1986 Rules, as applied by rule 285, has effect with respect to its voting rights at such a meeting.

(8) Meetings summoned under this rule are known respectively as “the first meeting of creditors” and “the first meeting of contributories”, and jointly as “the first meetings in the building society liquidation”.

Section 42 Business at first meetings of creditors and contributories

(1) At the first meeting of creditors the FSCS shall state whether or not it is resigning from the liquidation committee.

(2) At that meeting those creditors present (or represented by proxy) may—

(a) where the FSCS has not resigned, elect two or four individuals as new members of the liquidation committee,

(b) where the FSCS has resigned, elect three or five individuals as new members of the liquidation committee,

in place of the members nominated by the Bank of England and the FSA. In accordance with section 100(6)(e) of the Banking Act, the liquidation committee ceases to exist at the end of the meeting if no individuals are elected as mentioned or if the resulting committee would have fewer than three members or an even number of members. The maximum number of committee members will be five.

(3) At the first meeting of creditors no resolutions shall be taken other than the following—

(a) if an application has been made to the court by the creditors under rule 95 for the court to direct the building society liquidator to summon a meeting of creditors for the purpose of removing the building society liquidator, and the court has directed that a resolution may be passed to that effect at the first meeting of creditors, —

(i) a resolution to remove the building society liquidator (or a resolution to remove one or more of the building society liquidators if joint liquidators were originally appointed), and

(ii) a resolution to appoint a named insolvency practitioner to be building society liquidator or two or more insolvency practitioners as joint liquidators;

(b) if no individuals have been elected to form a liquidation committee under paragraph (2), a resolution specifying the terms on which the liquidator is to be remunerated, or to defer consideration of that matter;

(c) where two or more persons are appointed jointly to act as building society liquidator, a resolution specifying which acts are to be done by both of them, all of them or by only one;

(d) a resolution to adjourn the meeting for not more than three weeks; and

(e) any other resolutions which the chair thinks it right to allow for special reasons.

(4) At the first meeting of contributories, no resolutions shall be taken other than the following—

(a) if no individuals have been elected to form a liquidation committee under paragraph (2), a resolution to form a liquidation committee (and rule 118 shall then apply);

(b) a resolution to adjourn the meeting for no more than three weeks;

(c) any other resolutions which the chair thinks it right to allow for special reasons.

(5) The FSCS shall be entitled to be a member of any liquidation committee formed where the liquidation committee has ceased to exist at the end of the first meeting of the creditors.

Section 43 General power to call meetings

(1) Apply rule 4.54 of the 1986 Rules .

(2) Where the building society liquidator has been directed to summon a meeting of creditors under section 195 of the Insolvency Act (as applied by section 109 of the Banking Act) for the purpose of removing the building society liquidator, the building society liquidator shall give notice of the meeting to the Bank of England and the FSA.

Section 44 The chair at meetings

(1) Meetings shall be chaired by the building society liquidator or a person nominated in writing by the building society liquidator.

(2) A person nominated under paragraph (1) must be—

(a) qualified to act as an insolvency practitioner in accordance with section 390 of the Insolvency Act, or

(b) an employee of the building society liquidator or of the building society liquidator’s firm who is experienced in insolvency matters.

Section 45 Requisitioned meetings: general

Apply rule 4.57 of the 1986 Rules. In rule 4.57(4)(a) for “the amount for which they may vote at any meeting” substitute “the value of the shares held by them in the society”.

Section 46 Requisitioned meetings: reforming the liquidation committee

(1) Rule 4.57 of the 1986 Rules also applies where—

(a) the liquidation committee has ceased to exist at the end of the first meeting of creditors under rule 42 and no further steps have been taken to re-establish that committee; and

(b) the building society liquidator has been requested, by no less than one-tenth in value of the building society’s creditors, to summon a meeting for the purpose of re-establishing the liquidation committee.

(2) Where a meeting is requisitioned to re-establish the liquidation committee, the time periods set out in rule 4.57 of the 1986 Rules may be expedited by the building society liquidator at the request of the building society’s creditors.

(3) The building society liquidator shall give notice of the meeting to the FSA and Bank of England.

(4) Rule 42(1) and (2) shall apply at this meeting as if it were the first meeting of creditors.

Section 47 Attendance at meetings of building society’s personnel

Apply rule 4.58 of the 1986 Rules.

Section 48 Notice of meetings by advertisement only

Apply rule 4.59 of the 1986 Rules.

Section 49 Venue

Apply rule 4.60 of the 1986 Rules.

Section 50 Expenses of summoning meetings

Apply rule 4.61 of the 1986 Rules .