[F1Recognised bodies]U.K.

(2)A liquidator[F2, administrator] or trustee of a defaulter or, in Scotland, a [F3trustee in the sequestration of the] estate of the defaulter shall not—

(a)declare or pay any dividend to the creditors, or

(b)return any capital to contributories,

unless he has retained what he reasonably considers to be an adequate reserve in respect of any claims arising as a result of the default proceedings of [F4the recognised body] concerned.

(3)The court may on an application by a relevant office-holder make such order as it thinks fit altering or dispensing from compliance with such of the duties of his office as are affected by the fact that default proceedings are pending or could be taken, or have been or could have been taken.

(4)Nothing in [F5section 126, 128, 130, 185 or 285 of, or paragraph [F640, 41,] 42 or 43 ([F7including those paragraphs as applied by paragraph 44]) of Schedule B1 to, the Insolvency Act 1986] (which restrict the taking of certain legal proceedings and other steps), and nothing in any rule of law in Scotland to the like effect as the said section 285, in the Bankruptcy (Scotland) Act M1 [F82016] or in the Debtors (Scotland) Act M2 as to the effect of sequestration, shall affect any action taken by [F9a recognised body] for the purpose of its default proceedings.