The Industrial and Provident Societies and Credit Unions (Arrangements, Reconstructions and Administration) Order 2014

Distributions to creditors

51.  Rule 2.41 (distributions to creditors) has effect in relation to a proposal to make a distribution to member-depositors as if—

(a)for paragraph (1) there were substituted—

“(1) Subject to the modifications set out below and to any other necessary modifications, Chapter 9 of Part 4 (distribution of company’s assets by liquidator), except Rule 4.67 (order of priority of expenses of liquidation), applies with regard to a proposal to make a distribution to the member-depositors of a relevant society as it applies with regard to claims to a dividend out of the assets of a company in liquidation.”.

(b)for paragraph (2) there were substituted—

“(2) Subject to paragraphs (2A), (2B) and (5) below, in the application in relation to a relevant society of Chapter 9 of Part 4 or of any provision of the Bankruptcy Act as applied by Rule 4.16 or Rule 4.68 (application of the Bankruptcy Act)—

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

(b)a reference to a company is a reference to the society;

(c)a reference to a creditor does not include a reference to a member of the society to whom an amount is owed by the society if, but only in so far as, the amount concerned is owed in respect of the member’s shares;

(d)a reference to the date of commencement of winding up is a reference to the date on which the society entered administration;

(e)a reference to the liquidation is a reference to the administration;

(f)a reference to the liquidation committee is a reference to the creditors’ committee in the administration; and

(g)a reference to the liquidator is a reference to the administrator of the society.

(2A) In Rule 4.66 (order of priority in distribution)—

(a)in paragraph (1) a reference to ordinary debts includes a reference to any amount owed by the society in respect of a member’s shares where—

(i)the society is an authorised deposit taker; and

(ii)the amount concerned is owed in respect of a deposit; and

(b)in paragraph (2) the reference to section 242 (gratuitous alienations (Scotland)) is a reference to that section as applied in relation to a relevant society by an order made under section 255 of the Enterprise Act 2002(1).

(2B) In section 52 of the Bankruptcy Act (estate to be distributed in respect of accounting periods)(2), in subsection (3) a reference to a creditor includes a reference to a member-depositor of a relevant society, but only in so far as the member is owed an amount in respect of deposits.”;

(c)in paragraph (4) the reference to the administrator’s statement of proposals, as approved by the creditors, is a reference to that statement, as approved by the creditors and members of the society; and

(d)at the end there were added—

“(6) In this Rule—

“member-depositor”, in relation to a relevant society, means any member of the society to whom an amount is owed in respect of the member’s shares where—

“relevant society” has the meaning given in section 74(1) of the Industrial and Provident Societies Act 1965(3).”.