Insolvency Act 1986

[F1 PROCESS OF ADMINISTRATIONE+W+S

Announcement of administrator’s appointmentE+W+S

46(1)This paragraph applies where a person becomes the administrator of a company.

(2)As soon as is reasonably practicable the administrator shall—

(a)send a notice of his appointment to the company, and

(b)publish a notice of his appointment in the prescribed manner.

(3)As soon as is reasonably practicable the administrator shall—

(a)obtain a list of the company’s creditors, and

(b)send a notice of his appointment to each creditor of whose claim and address he is aware.

(4)The administrator shall send a notice of his appointment to the registrar of companies before the end of the period of 7 days beginning with the date specified in sub-paragraph (6).

(5)The administrator shall send a notice of his appointment to such persons as may be prescribed before the end of the prescribed period beginning with the date specified in sub-paragraph (6).

(6)The date for the purpose of sub-paragraphs (4) and (5) is—

(a)in the case of an administrator appointed by administration order, the date of the order,

(b)in the case of an administrator appointed under paragraph 14, the date on which he receives notice under paragraph 20, and

(c)in the case of an administrator appointed under paragraph 22, the date on which he receives notice under paragraph 32.

(7)The court may direct that sub-paragraph (3)(b) or (5)—

(a)shall not apply, or

(b)shall apply with the substitution of a different period.

(8)A notice under this paragraph must—

(a)contain the prescribed information, and

(b)be in the prescribed form.

(9)An administrator commits an offence if he fails without reasonable excuse to comply with a requirement of this paragraph.

Statement of company’s affairsE+W+S

47(1)As soon as is reasonably practicable after appointment the administrator of a company shall by notice in the prescribed form require one or more relevant persons to provide the administrator with a statement of the affairs of the company.

(2)The statement must—

(a)be verified by a statement of truth in accordance with Civil Procedure Rules,

(b)be in the prescribed form,

(c)give particulars of the company’s property, debts and liabilities,

(d)give the names and addresses of the company’s creditors,

(e)specify the security held by each creditor,

(f)give the date on which each security was granted, and

(g)contain such other information as may be prescribed.

(3)In sub-paragraph (1) “relevant person” means—

(a)a person who is or has been an officer of the company,

(b)a person who took part in the formation of the company during the period of one year ending with the date on which the company enters administration,

(c)a person employed by the company during that period, and

(d)a person who is or has been during that period an officer or employee of a company which is or has been during that year an officer of the company.

(4)For the purpose of sub-paragraph (3) a reference to employment is a reference to employment through a contract of employment or a contract for services.

(5)In Scotland, a statement of affairs under sub-paragraph (1) must be a statutory declaration made in accordance with the Statutory Declarations Act 1835 (c. 62) (and sub-paragraph (2)(a) shall not apply).

48(1)A person required to submit a statement of affairs must do so before the end of the period of 11 days beginning with the day on which he receives notice of the requirement.E+W+S

(2)The administrator may—

(a)revoke a requirement under paragraph 47(1), or

(b)extend the period specified in sub-paragraph (1) (whether before or after expiry).

(3)If the administrator refuses a request to act under sub-paragraph (2)—

(a)the person whose request is refused may apply to the court, and

(b)the court may take action of a kind specified in sub-paragraph (2).

(4)A person commits an offence if he fails without reasonable excuse to comply with a requirement under paragraph 47(1).

Administrator’s proposalsE+W+S

49(1)The administrator of a company shall make a statement setting out proposals for achieving the purpose of administration.

(2)A statement under sub-paragraph (1) must, in particular—

(a)deal with such matters as may be prescribed, and

(b)where applicable, explain why the administrator thinks that the objective mentioned in paragraph 3(1)(a) or (b) cannot be achieved.

(3)Proposals under this paragraph may include—

(a)a proposal for a voluntary arrangement under Part I of this Act (although this paragraph is without prejudice to section 4(3));

(b)a proposal for a compromise or arrangement to be sanctioned under [F2Part 26 [F3or 26A] of the Companies Act 2006 (arrangements and reconstructions)].

(4)The administrator shall send a copy of the statement of his proposals—

(a)to the registrar of companies,

(b)to every creditor of the company [F4, other than an opted-out creditor,] of whose claim and address he is aware, and

(c)to every member of the company of whose address he is aware.

(5)The administrator shall comply with sub-paragraph (4)—

(a)as soon as is reasonably practicable after the company enters administration, and

(b)in any event, before the end of the period of eight weeks beginning with the day on which the company enters administration.

(6)The administrator shall be taken to comply with sub-paragraph (4)(c) if he publishes in the prescribed manner a notice undertaking to provide a copy of the statement of proposals free of charge to any member of the company who applies in writing to a specified address.

(7)An administrator commits an offence if he fails without reasonable excuse to comply with sub-paragraph (5).

(8)A period specified in this paragraph may be varied in accordance with paragraph 107.

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[F6Consideration of administrator's proposals by creditors]E+W+S

51[F7(1)The administrator must seek a decision from the company's creditors as to whether they approve the proposals set out in the statement made under paragraph 49(1).

(2)The initial decision date for that decision must be within the period of 10 weeks beginning with the day on which the company enters administration.

(3)The “initial decision date” for that decision—

(a)if the decision is initially sought using the deemed consent procedure, is the date on which a decision will be made if the creditors by that procedure approve the proposals, and

(b)if the decision is initially sought using a qualifying decision procedure, is the date on or before which a decision will be made if it is made by that qualifying decision procedure (assuming that date does not change after the procedure is instigated).]

(4)A period specified in this paragraph may be varied in accordance with paragraph 107.

(5)An administrator commits an offence if he fails without reasonable excuse to comply with a requirement of this paragraph.

52(1)Paragraph 51(1) shall not apply where the statement of proposals states that the administrator thinks—E+W+S

(a)that the company has sufficient property to enable each creditor of the company to be paid in full,

(b)that the company has insufficient property to enable a distribution to be made to unsecured creditors other than by virtue of section 176A(2)(a), or

(c)that neither of the objectives specified in paragraph 3(1)(a) and (b) can be achieved.

(2)But the administrator shall [F8seek a decision from the company's creditors as to whether they approve the proposals set out in the statement made under paragraph 49(1) if requested to do so] —

(a)by creditors of the company whose debts amount to at least 10% of the total debts of the company,

(b)in the prescribed manner, and

(c)in the prescribed period.

[F9(3)Where a decision is sought by virtue of sub-paragraph (2) the initial decision date (as defined in paragraph 51(3)) must be within the prescribed period.]

(4)The period prescribed under sub-paragraph (3) may be varied in accordance with paragraph 107.

[F10Creditors' decision]E+W+S

53[F11(1)The company's creditors may approve the administrator's proposals—

(a)without modification, or

(b)with modification to which the administrator consents.]

(2)[F12The] administrator shall as soon as is reasonably practicable report any decision taken [F13by the company's creditors] to—

(a)the court,

(b)the registrar of companies, and

(c)such other persons as may be prescribed.

(3)An administrator commits an offence if he fails without reasonable excuse to comply with sub-paragraph (2).

Revision of administrator’s proposalsE+W+S

54(1)This paragraph applies where—

(a)an administrator’s proposals have been approved (with or without modification) [F14by the company's creditors],

(b)the administrator proposes a revision to the proposals, and

(c)the administrator thinks that the proposed revision is substantial.

(2)The administrator shall—

F15(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)send a statement in the prescribed form of the proposed revision F16... to each creditor [F17who is not an opted-out creditor],

(c)send a copy of the statement, within the prescribed period, to each member of the company of whose address he is aware, and

[F18(d)seek a decision from the company's creditors as to whether they approve the proposed revision.]

(3)The administrator shall be taken to have complied with sub-paragraph (2)(c) if he publishes a notice undertaking to provide a copy of the statement free of charge to any member of the company who applies in writing to a specified address.

(4)A notice under sub-paragraph (3) must be published—

(a)in the prescribed manner, and

(b)within the prescribed period.

[F19(5)The company's creditors may approve the proposed revision—

(a)without modification, or

(b)with modification to which the administrator consents.]

(6)[F20The] administrator shall as soon as is reasonably practicable report any decision taken [F21by the company's creditors] to—

(a)the court,

(b)the registrar of companies, and

(c)such other persons as may be prescribed.

(7)An administrator commits an offence if he fails without reasonable excuse to comply with sub-paragraph (6).

Failure to obtain approval of administrator’s proposalsE+W+S

55[F22(1)This paragraph applies where an administrator—

(a)reports to the court under paragraph 53 that a company's creditors have failed to approve the administrator's proposals, or

(b)reports to the court under paragraph 54 that a company's creditors have failed to approve a revision of the administrator's proposals.]

(2)The court may—

(a)provide that the appointment of an administrator shall cease to have effect from a specified time;

(b)adjourn the hearing conditionally or unconditionally;

(c)make an interim order;

(d)make an order on a petition for winding up suspended by virtue of paragraph 40(1)(b);

(e)make any other order (including an order making consequential provision) that the court thinks appropriate.

Further creditors’ [F23decisions] E+W+S

56(1)The administrator of a company shall [F24seek a decision from the company's creditors on a matter] if—

(a)it is requested in the prescribed manner by creditors of the company whose debts amount to at least 10% of the total debts of the company, or

(b)he is directed by the court to [F25do so].

(2)An administrator commits an offence if he fails without reasonable excuse to [F26seek a decision from the company's creditors on a matter] as required by this paragraph.

Creditors’ committeeE+W+S

57(1)[F27The company's creditors may, in accordance with the rules,] establish a creditors’ committee.

(2)A creditors’ committee shall carry out functions conferred on it by or under this Act.

(3)A creditors’ committee may require the administrator—

(a)to attend on the committee at any reasonable time of which he is given at least seven days’ notice, and

(b)to provide the committee with information about the exercise of his functions.

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