The Insolvency (Amendment) Rules 2010

• Citation: S.I. 2010/686
• Sections: 637

Section 1 Citation and commencement

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

Section 2 Amendments to and revocations in the Insolvency Rules 1986

The Insolvency Rules 1986 (“the 1986 Rules”) are amended as set out in Schedule 1 to these Rules.

Section 3 Amendments to and revocations in the Insolvency Rules 1986

Schedule 2 to these Rules contains new forms substituted for existing forms as provided in paragraph 558 of Schedule 1 to these Rules.

Section 4 Amendments to and revocations in the Insolvency Rules 1986

After Part 12 to the 1986 Rules insert Part 12A as set out in Schedule 3 to these Rules.

Section 5 Amendments to and revocations in the Insolvency Rules 1986

The following Rules in the 1986 Rules are revoked—

in Part 1, Rule 1.2;

in Part 2, Rule 2.73;

in Part 3, Rules 3.36 to 3.38;

in Part 4, Rules 4.77, 4.148B, 4.175, 4.190 and 4.223;

in Part 5, Rules 5.15, 5.16 and 5.44;

in Part 6, Rules 6.20, 6.36, 6.99, 6.102 and 6.235;

in Part 7, Rules 7.2, 7.18, 7.53, 7.54, 7.57 and 7.58;

in Part 12, Rules 12.4 to 12.17, 12.19, 12.20 and 12.22.

Section 6 Transitional provisions

(1) The transitional provisions in Schedule 4 to these Rules have effect.

(2) Rule 4.54(6)(a) (notice of meeting in winding up to be gazetted) does not apply where the notice is of a meeting to be held under section 93 or 105 (annual meetings in voluntary liquidations) .

Section 7 Special administration regimes and old administrations

Schedule 5 to these Rules has effect in respect of companies and societies listed in section 249(1) of the Enterprise Act 2002 and any case in which a petition for an administration order was presented before 15th September 2003.

Section 8 Amendments to the Insolvency (Amendment) Rules 2009

(1) Rule 3 of the Insolvency (Amendment) Rules 2009 is amended as follows.

(2) In paragraph (1), for “paragraph (2)” substitute “paragraphs (1A) and (2)”.

(3) After paragraph (1) insert—

(1A) On and after 6th April 2010, the amendment made by Rule 62 of these Rules to the principal Rules applies in respect of an advertisement appearing in the Gazette or a newspaper after that date where before 6th April 2009 the conditions contained in paragraph (1)(a) or (b) of this Rule were met.

Section 1 General amendments

Except in the Forms contained in Schedule 4 to the 1986 Rules, for each word in the first column wherever it appears substitute the corresponding word in the second column.

Section 2 Amendments to Rule 0.2

(1) Rule 0.2 (construction and interpretation) is amended as follows.

(2) Omit paragraph (2).

(3) In paragraph (3), for “paragraphs (1) and (2)” substitute “paragraph (1)”.

Section 3 Amendments to Rule 1.3

(1) Rule 1.3 (contents of the proposal) is amended as follows.

(2) In paragraph (2)—

(a) in sub-paragraph (p), at the end omit “and”;

(b) after sub-paragraph (q) add—

; and

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

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

Section 4 Amendments to Rule 1.5

(1) Rule 1.5 (statement of affairs) is amended as follows.

(2) In paragraph (1)—

(a) for “within 7 days after their” substitute “at the same time as the”;

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

(3) For paragraph (4), substitute—

The statement must be verified by a statement of truth made by at least one director.

Section 5 Amendment to Rule 1.6

(1) Rule 1.6 (additional disclosure for assistance of nominee) is amended as follows.

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

Section 6 Amendments to Rule 1.8

(1) Rule 1.8 (replacement of nominee) is amended as follows.

(2) In paragraphs (1) and (2), for “7” substitute “5 business”.

Section 7 Amendments to Rule 1.9

(1) Rule 1.9 (summoning of meetings under s 3) is amended as follows.

(2) In paragraph (1) omit “less than 14, nor”.

(3) In paragraph (2)(a), for “whom he” substitute “whose address the nominee”.

(4) In paragraph (3), for “Rule 1.19(1)” substitute “Rule 1.19(2)”.

Section 8 Amendment to Rule 1.10

(1) Rule 1.10 (preparation of proposal) is amended as follows.

(2) For paragraph (1) substitute—

(1) The responsible insolvency practitioner’s proposal must specify all such matters as under Rule 1.3 (subject to paragraph (3) below) in Chapter 2 the directors of the company would be required to include in a proposal by them, with the addition, where the company is in administration or liquidation, of the nature and amount of its preferential creditors.

Section 9 Amendment to Rule 1.11

(1) Rule 1.11 (summoning of meetings under s 3) is amended as follows.

(2) In paragraph (1)(a), for “whom the insolvency practitioner is” substitute “whose address the insolvency practitioner is otherwise”.

Section 10 Amendments to Rule 1.13

(1) Rule 1.13 (summoning of meetings) is amended as follows.

(2) In paragraph (1), for “the person summoning the meeting (“the convener”) shall” substitute “the nominee must”.

(3) In paragraph (4), for “7” substitute “5 business”.

Section 11 Amendments to Rule 1.14

(1) Rule 1.14 (the chairman at meetings) is amended as follows.

(2) In paragraph (1) for “convener shall” substitute “nominee must”.

(3) In paragraph (2)(c) for “convenor” substitute “nominee”.

Section 12 Amendment to Rule 1.16

(1) Rule 1.16 (attendance by company officers) is amended as follows.

(2) In paragraph (1), for “convener” wherever it appears substitute “nominee”.

Section 13 Amendments to Rule 1.19

(1) Rule 1.19 (requisite majorities (creditors)) is amended as follows.

(2) For paragraphs (1) and (2) substitute—

(1) Subject to paragraph (2), at the creditors’ meeting, a resolution is passed when a majority (in value) of those present and voting in person or by proxy have voted in favour of it.

(2) A resolution to approve the proposal or a modification is passed when a majority of three-quarters or more (in value) of those present and voting in person or by proxy have voted in favour of it.

(3) In paragraph (3)(a), for “convener of the meeting” substitute “nominee”.

Section 14 Amendment to Rule 1.21

(1) Rule 1.21 (conduct of meetings) is amended as follows.

(2) After paragraph (4) insert —

(4A) Once only in the course of a meeting the chairman may, without an adjournment, declare it suspended for any period up to 1 hour.

Section 15 Amendment to Rule 1.22

(1) Rule 1.22 (resolutions to follow approval) is amended as follows.

(2) In paragraph (1), for “may” where it appears first substitute “must”.

Section 16 Amendment to Rule 1.22A

(1) Rule 1.22A (notice of order made under section 4A(6)) is amended as follows.

(2) In paragraph (5), for “7” substitute “5 business”.

Section 17 Amendments to Rule 1.24

(1) Rule 1.24 (report of meetings) is amended as follows.

(2) In paragraph (3), after “4” insert “business”.

(3) In the second sentence of paragraph (4), for “immediately” substitute “as soon as reasonably practicable”.

Section 18 Amendment to Rule 1.25

(1) Rule 1.25 (revocation or suspension of the arrangement) is amended as follows.

(2) In paragraphs (4)(b) and (5), for “7” substitute “5 business”.

Section 19 Substitution of Rule 1.26

For Rule 1.26 (supervisor’s accounts and reports) substitute—

Supervisor’s accounts and reports

(1.26A)

(1) Paragraph (2) applies where the voluntary arrangement authorises or requires the supervisor—

(a) to carry on the business of the company or trade on its behalf or in its name; or

(b) to realise assets of the company; or

(c) otherwise to administer or dispose of any of its funds.

(2) The supervisor must keep accounts and records of the supervisor’s acts and dealings in, and in connection with, the arrangement, including in particular records of all receipts and payments of money.

(3) The supervisor must preserve any accounts and records in paragraph (2) which—

(a) were kept by any other person who has acted as supervisor of the arrangement; and

(b) are in the supervisor’s possession.

(4) Subject to paragraph (5), the supervisor must in respect of each period of 12 months ending with the anniversary of the commencement of the arrangement send within 2 months of the end of that period a report on the progress and prospects for the full implementation of the voluntary arrangement to—

(a) the registrar of companies;

(b) the company;

(c) all those of the company’s creditors who are bound by the voluntary arrangement of whose address the supervisor is aware;

(d) subject to paragraph (7) below, the members of the company; and

(e) if the company is not in liquidation, the company’s auditors (if any) for the time being.

(5) The supervisor is released from an obligation to send a report under paragraph (4), if an obligation to send a final report under Rule 1.29 arises in the period of 2 months mentioned in paragraph (4).

(6) Where the supervisor is authorised or required to do any of the things mentioned in paragraph (1)(a) to (c), the report required to be sent pursuant to paragraph (4) must include or be accompanied by—

(a) an abstract of receipts and payments required to be recorded by virtue of paragraph (2); or

(b) where there have been no such receipts and payments, a statement to that effect.

(7) The court may, on application by the supervisor dispense with the sending under this Rule of abstracts or reports to members of the company, either altogether or on the basis that the availability of the abstract or report to members is to be advertised by the supervisor in a specified manner.

Section 20 Amendment to Rule 1.27

(1) Rule 1.27 (production of accounts and records to Secretary of State) is amended as follows.

(2) In paragraph (1)(b), for “1.26” substitute “1.26A”.

Section 21 Amendments to Rule 1.31

(1) Rule 1.31 (application for conversion into winding up) is amended as follows.

(2) For paragraph (1) substitute—

(1) Where a member State liquidator proposes to apply to the court for conversion of a voluntary arrangement into winding-up proceedings, a witness statement complying with Rule 1.32 must be prepared and filed in court in support of the application.

(1A) In this Rule, and in Rules 1.32 and 1.33, “ conversion into winding-up proceedings ” means an order under Article 37 of the EC Regulation (conversion of earlier proceedings) that the voluntary arrangement is converted into—

(a) administration proceedings whose purposes are limited to the winding up of the company through administration and are to exclude the purpose contained in paragraph 3(1)(a) of Schedule B1 to the Act ;

(b) a creditors’ voluntary winding up; or

(c) a winding up by the court.

(3) In paragraph (3), for “affidavit” substitute “witness statement”.

Section 22 Amendments to Rule 1.32

(1) Rule 1.32 (contents of affidavit) is amended as follows.

(2) In the heading, for “affidavit” substitute “witness statement”.

(3) In paragraph (1)—

(a) for “affidavit” substitute “witness statement”;

(b) in sub-paragraph (b)—

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

(ii) for “a winding up” substitute “winding-up proceedings”;

(c) for sub-paragraph (c) substitute—

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

(4) In paragraph (2)—

(a) for “An affidavit” substitute “A witness statement”; and

(b) for “sworn” substitute “made”.

Section 23 Amendment to Rule 1.33

(1) Rule 1.33 (power of court) is amended as follows.

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

Section 24 Amendments to Rule 1.37

(1) Rule 1.37 (particulars in statement) is amended as follows.

(2) In paragraph (1)—

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

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

(3) For paragraph (4), substitute—

The statement of affairs must be verified by a statement of truth made by at least one director.

Section 25 Amendment to Rule 1.39

(1) Rule 1.39 (documents submitted to the court to obtain moratorium) is amended as follows.

(2) In paragraph (1), for “working” substitute “business”.

Section 26 Amendments to Rule 1.40

(1) Rule 1.40 (notice and advertisement of beginning of a moratorium) is amended as follows.

(2) After paragraph (2), insert—

(2A) In addition to the standard contents, the notice under paragraph (2) must state—

(a) the nature of the business of the company;

(b) that a moratorium under section 1A has come into force; and

(c) the date upon which the moratorium came into force.

(3) In paragraph (3)—

(a) for “claim he” substitute “address the nominee”, and

(b) at the end add—

and the court at which the documents to obtain the moratorium were filed

Section 27 Amendments to Rule 1.42

(1) Rule 1.42 (notice and advertisement of end of moratorium) is amended as follows.

(2) After paragraph (1) insert—

(1A) In addition to the standard contents, the notice under paragraph (1) must state—

(a) the nature of the business of the company;

(b) that a moratorium under section 1A has come to an end; and

(c) the date upon which the moratorium came to an end.

(3) In paragraph (2), for “claim he” substitute “address the nominee”.

Section 28 Amendment to Rule 1.44

(1) Rule 1.44 (withdrawal of nominee’s consent to act) is amended as follows.

(2) In subparagraph (d) for “he” substitute “and address the nominee”.

Section 29 Amendments to Rule 1.45

(1) Rule 1.45 (replacement of nominee by court) is amended as follows.

(2) In paragraphs (1) and (2), for “7” substitute “5 business”.

(3) In paragraph (3) for “his consent to act” substitute—

that the replacement nominee—

(a) consents to act; and

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

Section 30 Amendment to Rule 1.47

(1) Rule 1.47 (application to court under paragraph 26 or 27 of Schedule A1 to the Act ) is amended as follows.

(2) For “7” substitute “5 business”.

Section 31 Amendments to Rule 1.48

(1) Rule 1.48 (summoning of meetings; procedure at meetings etc.) is amended as follows.

(2) For paragraph (4) substitute—

(4) Each notice sent under this Rule must—

(a) specify—

(i) the court in which the documents relating to the obtaining of the moratorium were filed and

(ii) the court reference; and

(b) state the effect of paragraphs (2) to (4) of Rule 1.52 (requisite majorities (creditors)).

(4A) With each notice there must be sent—

(a) a copy of the directors’ proposal;

(b) a copy of the statement of affairs or, if the nominee thinks fit, a summary of it (the summary to include a list of creditors and the amount of their debts); and

(c) the nominee’s comments on the proposal.

Section 32 Amendments to Rule 1.52

(1) Rule 1.52 (requisite majorities (creditors)) is amended as follows.

(2) For paragraphs (1) and (2) substitute—

(1) Subject to paragraph (2), at the creditors’ meeting, a resolution is passed when a majority (in value) of those present and voting in person or by proxy have voted in favour of it.

(2) A resolution to approve the proposal or a modification is passed when a majority of three-quarters or more (in value) of those present and voting in person or by proxy have voted in favour of it.

(3) In paragraph (4)(a) for “convener of the meeting” substitute “nominee”.

Section 33 Amendment to Rule 1.53

(1) Rule 1.53 (requisite majorities (members) and proceedings to obtain agreement on the proposal) is amended as follows.

(2) After paragraph (4) insert —

(4A) Once only in the course of a meeting the chairman may, without an adjournment, declare it suspended for any period up to 1 hour.

Section 34 New Chapters in Part 1

After Rule 1.54 add—

TIME RECORDING INFORMATION

Provision by nominee or supervisor of information about time spent on a proposal or voluntary arrangement

(1.55)

(1) Subject as set out in this Rule, a person (“ the relevant person ”) who has acted or is acting as—

(a) a nominee in respect of a proposed voluntary arrangement; or

(b) a supervisor in respect of a voluntary arrangement

must, on request in writing by any person mentioned in paragraph (2), supply free of charge to that person a statement of the kind described in paragraph (3).

(2) The persons referred to in paragraph (1) are—

(a) any director of the company;

(b) where the proposal has been approved, any creditor or member of the company in respect of the arrangement.

(3) The statement referred to in paragraph (1)—

(a) must cover the period beginning with the date of the appointment of the relevant person as nominee or supervisor, as the case may be, and ending—

(i) with the date next before the date of making the request on which the relevant person has completed any period as nominee or supervisor, or both, which is a multiple of 6 months or,

(ii) where the relevant person has ceased to act as nominee or supervisor, the date upon which the person so ceased; and

(b) must comprise the following details—

(i) the total number of hours spent on the voluntary arrangement by the relevant person whether as nominee or supervisor, or both, and any staff assigned to the voluntary arrangement during that period;

(ii) for each grade of individual so engaged, the average hourly rate at which any work carried out by individuals in that grade is charged; and

(iii) the number of hours spent by each grade of staff during that period.

(4) No request pursuant to this Rule may be made where more than 2 years has elapsed since the relevant person ceased to act in any capacity in relation to the proposal or any voluntary arrangement arising out of the approval of the proposal.

(5) Any statement required to be provided to any person under this Rule must be supplied within 28 days of the date of the receipt of the request by the person required to supply it.

OMISSION OF INFORMATION FROM STATEMENT OF AFFAIRS

Omission of Information from Statement of Affairs

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

Section 35 Amendments to Rule 2.2

(1) Rule 2.2 (affidavit in support of administration application) is amended as follows.

(2) In the heading, for “Affidavit” substitute “Witness statement”.

(3) In paragraph (1)—

(a) for “an affidavit” substitute “a witness statement”; and

(b) omit “and sworn,”.

(4) In paragraphs (2) and (3), for “affidavit” wherever it appears substitute “witness statement”.

Section 36 Amendments to Rule 2.4

(1) Rule 2.4 (contents of application) is amended as follows.

(2) In the heading, for “affidavit” substitute “witness statement”.

(3) In paragraph (2), for “an affidavit” substitute “a witness statement”.

(4) In paragraphs (3) and (4), for “affidavit” substitute “witness statement”.

(5) In paragraph (4), after “main proceedings” insert “, secondary proceedings”.

Section 37 Amendment to Rule 2.6

(1) Rule 2.6 (service of application) is amended as follows.

(2) In paragraph (1), for “affidavit in support of it” substitute “witness statement required by Rule 2.4”.

Section 38 Amendments to Rule 2.8.

(1) Rule 2.8 (manner in which service to be effected) is amended as follows.

(2) In paragraph (1), after “5” insert “business”.

(3) Omit paragraph (6).

Section 39 Amendments to Rule 2.9

(1) Rule 2.9 (proof of service) is amended as follows.

(2) For paragraph (1) substitute—

(1) Service of the application must be verified by a certificate of service.

(1A) The certificate of service must be sufficient to identify the application served and must specify—

(a) the name and registered number of the company,

(b) the address of the registered office of the company,

(c) the name of the applicant,

(d) the court to which the application was made and the court reference number,

(e) the date of the application,

(f) whether the copy served was a sealed copy,

(g) the date on which service was effected, and

(h) the manner in which service was effected.

(3) In paragraph (2)—

(a) for “affidavit of service, with a sealed copy of the application exhibited to it,” substitute “certificate of service”;

(b) after “1” insert “business”.

Section 40 Amendments to Rule 2.11

(1) Rule 2.11 (application where company in liquidation) is amended as follows.

(2) In paragraph (1), for “affidavit in support of the administration application” substitute “witness statement required by Rule 2.4”.

(3) In paragraph (2), for “affidavit” substitute “witness statement required by Rule 2.4”.

Section 41 Amendments to Rule 2.19

(1) Rule 2.19 (appointment taking place out of court business hours) is amended as follows.

(2) In paragraph (1), for “in accordance with paragraph (3)” substitute “or sending it as an attachment to an e-mail in accordance with paragraphs (3) and (3A)”.

(3) For paragraph (3) substitute—

(3) The notice must be—

(a) faxed to a designated telephone number, or

(b) sent as an attachment by e-mail to a designated e-mail address,

which must be provided by the Court Service for that purpose.

(3A) The Secretary of State must publish the designated telephone number and e-mail address on The Insolvency Service website and, on request to The Insolvency Service, make them available in writing.

(4) In paragraph (4)—

(a) after “ensure that” insert “(a)”;

(b) after “date of the fax transmission” insert “and the telephone number to which the notice was faxed”;

(c) at the end add—

,or

(b) a hard copy of the e-mail is created detailing the time and date of the e-mail and the address to which it was sent and containing a copy of the document sent as an attachment,

as the case may be; and the appointor must retain the report or hard copy.

(5) In paragraph (5), for “that fax transmission” substitute “the fax transmission or sending of the e-mail”.

(6) In paragraph (6), for “received by the Court Service fax machine” substitute “, or the e-mail (or a hard copy of the e-mail) containing the notice of appointment, as (in either case) received by the Court Service,”.

(7) In paragraph (7), for the words from “showing the date” to “designated telephone number” substitute “or hard copy required by paragraph (4)”.

(8) In paragraph (9)—

(a) after “transmission report” insert “or hard copy of the e-mail”;

(b) after “faxed” insert “or sent”.

(9) In paragraph (11), after “transmission report” insert “or hard copy of the e-mail”.

Section 42 Amendment to Rule 2.20

(1) Rule 2.20 (notice of intention to appoint) is amended as follows.

(2) In paragraph (3), for “2.8(6)” substitute “2.8(5)”.