APPENDIX 5
Produced by the
Association of Business Recovery Professionals
Version 2
November 2004
TABLE
OF CONTENTS FOR STANDARD CONDITIONS 1
INDIVIDUAL VOLUNTARY ARRANGEMENTS
TABLE OF CONTENTS
PART I: INTERPRETATION
1 Miscellaneous definitions
2 The Conditions
PART II: COMMENCEMENT,
EFFECT, AND
3 Commencement of Arrangement
4 Nature and effect of the Arrangement
5 Existing proceedings against Debtor
6 Existing execution against Debtor’s assets
7 Mutual credit and set-off
8 Duration of Arrangement
9 Completion of Arrangement
10 Substantial Compliance
11 Termination of Arrangement
PART III: SUPERVISOR’S
FUNCTIONS, POWERS ETC
12 Supervisor’s functions
13 Supervisor’s powers
14 Supervisor’s powers upon completion/termination
15 Exercise of Supervisor’s functions and powers
16 Restriction upon Supervisor’s duty and liability
17 Supervisor’s fees, costs and expenses
18 Supervisor’s resignation
19 Removal of Supervisor from office
20 Vacation of Office by Supervisor
21 Vacancy in the office of Supervisor
PART IV: DEBTOR’S
WARRANTY, DUTIES & OBLIGATIONS
22 Debtor’s warranty
23 Debtor’s duties in relation to Supervisor
24 Further Documents
25 Debtor’s acknowledgement
PART V: ARRANGEMENT ASSETS
26 Arrangement assets
27 After-acquired assets
28 Trust of Arrangement assets
29 Restriction on dispositions
PART VI: CLAIMS
30 Notice to submit claims
31 Submission of claims
32 Variation of claims
33 Production of documents
34 Affidavit substantiating claim
35 Supervisor to allow inspection of claims
36 Admission and rejection of claims for Dividend
37 Appeal against decision on claim
38 Debts of uncertain value
39 Secured Creditors
40 Foreign currency Debts
41 Debts payable at future time
42 Interest on Debts
43 Cost of submitting
claims
PART VII CREDITORS WHO DO
NOT HAVE NOTICE
44 Claims arising where funds available
45 Claims arising where no funds available
46 Effect of claims on debtor
47 Notification of claims to Creditors
48 Claims arising after termination
PART VIII: PAYMENT OF
DIVIDENDS
49 Distribution by Dividend
50 Notice of intended Dividend
51 Notice of declaration
52 Claim altered after payment of Dividend
53 Secured Creditors
54 Assignment of Debts or rights to Dividend
55 Debts payable at future time
56 Debts of unpaid Creditors
PART IX: PRIORITY OF
PAYMENTS AND DISTRIBUTIONS
57 Costs and Expenses of the Arrangement
58 Priority of Debts and application of surplus
PART X: THE CREDITORS COMMITTEE
& MEETINGS OF CREDITORS
59 The Creditors’ Committee
60 Power to call/requisition meetings of Creditors
61 Calling Creditors’ meetings
62 Cost of summoning meetings
63 Entitlement to vote
64 Admission and rejection of claim
65 Majorities required to pass resolutions
66 Chairman of meeting as proxy-holder
67 Suspension/adjournment of meeting
68 Record of proceedings
69 Postal resolutions
PART XI: PROVISIONS
FOLLOWING BREACH OF THE ARRANGEMENT
70 Breach by the Debtor of the terms of the Arrangement
71 Procedure following breach
72 Retention of funds by Supervisor
PART XII: CONDITIONS WHERE TAX AUTHORITIES ARE
CREDITORS
73 Inland Revenue claims
74 Income commencing after approval
75 Post approval statutory returns and payments
76 Overdue accounts and returns
77 Funds to be paid to Supervisor
78 Restriction on payment of dividend
79 Set-off of repayments
PART XIII: MISCELLANEOUS
PROVISIONS
80 Third Party obligations
81 Variation of the Arrangement
82 Tax liabilities arising on realisations
83 Invalidity and/or illegality
1 In
the Arrangement, except where the context otherwise demands:
(a)
“the Act” means
the Insolvency Act 1986 as amended;
(b)
“the Arrangement”
means the Proposal and the Conditions read together;
(c)
“Associate” shall
have the meaning given to it in section 435 of the Act;
(d)
“the Conditions”
are these Conditions;
(e)
“the Court” means
any court having jurisdiction in respect of the Arrangement;
(f)
“Creditor” is a
person bound by the Arrangement to whom a Debt is owed;
(g)
“Debt” has the
meaning given to it in section 382 of the Act with the modifications necessary
to refer to a voluntary arrangement;
(h)
“the Debtor” means
the person who makes the Proposal;
(i)
“Dividend” means a distribution to
Creditors;
(j)
“Excluded Assets”
are those assets identified in the Proposal as being excluded from the
Arrangement;
(k)
“Paragraphs” are
Paragraphs of these Conditions; and Sub-paragraph shall be construed
accordingly;
(l)
“Preferential Creditor” is a Creditor with a
Debt falling within section 386 of the Act and “Preferential Debt” shall be construed accordingly;
(m)
“Property” has
the meaning given to it in section 436 of the Act;
(n)
“the Proposal” is
the document annexed hereto together with modifications and documents
incorporated thereto, being a proposal under Part VIII of the Act;
(o)
“the Rules” means
the Insolvency Rules 1986 as amended;
(p)
“Security” has the meaning given to it in section 383 of the Act;
and “Secured Creditor” shall be construed accordingly;
(q)
“the Supervisor”
is the person or persons for the time being appointed to supervise the
implementation of the Arrangement;
The
Conditions are an integral part of the Arrangement. In the event of any
ambiguity or conflict between the Conditions and the Proposal and any
modifications to it, the Proposal as modified shall prevail.
DURATION OF ARRANGEMENT
The
Arrangement shall come into effect upon the approval thereof by the Creditors
pursuant to the provisions of the Act and Rules.
4(1) [Nature of Arrangement] The Arrangement is a
proposal under Part VIII of the Act for a scheme of arrangement of the Debtor’s
affairs or a composition in full and final satisfaction of the Debtor’s Debts.
4(2) [Claims against third parties] Unless the Proposal
indicates to the contrary, nothing in the Arrangement shall be construed as
effecting a composition or satisfaction of any Debt owed by a person other than
the Debtor, whether that Debt is owed jointly by the Debtor or otherwise.
4(3) [Restriction on Creditors’ rights] After the commencement of
the Arrangement, no Creditor shall, in respect of any Debt which is subject to
the Arrangement:
(a) have any remedy against the
property or person of the Debtor;
(b) commence or continue any action or other legal proceeding
against the Debtor.
4(4) [Saving for
certain rights] Nothing in this Paragraph or elsewhere in the Conditions shall be
construed as affecting the following rights:
(a)
the right of any Secured Creditor to enforce his Security,
except with the Secured Creditor’s consent;
(b)
the right of the Supervisor or any Creditor to present a bankruptcy
petition under section 264(1)(c) of the Act for default in connection with the
Arrangement
(c)
the right of any Creditor to bring or continue legal
proceedings against the Debtor and to obtain a judgment against the Debtor in
the full amount of its Debt for the sole purpose of making a claim against an
insurer of the Debtor by virtue of the Third Party (Rights Against Insurers)
Act 1930.
5(1) [Discontinuance of existing proceedings] Legal proceedings against
the Debtor in existence at the commencement of the Arrangement in respect of
Debts which are subject to the Arrangement shall, unless they are of a type
contemplated by Paragraph 4(4), be discontinued by the Creditor as soon after
the commencement of the Arrangement as is practicable.
5(2) [Costs of existing proceedings] Legal costs of a Creditor
in proceedings other than bankruptcy referred to in Sub-paragraph (1) shall be
a Debt falling within the Arrangement.
5(3) [Costs of bankruptcy proceedings] Petition costs of a Creditor who presented a
bankruptcy petition against the Debtor prior to the commencement of the
Arrangement shall be treated as an expense of the Arrangement to rank after the
costs of the Nominee but before those of the Supervisor.
5(4) [Prior distress] Where any person has distrained on the goods or effects of the Debtor in
the period of three months prior to the making of the interim order, those
goods or effects, or the proceeds of their sale, shall be charged with the
Preferential Debts of the Debtor to the extent that the assets of the
Arrangement are insufficient for meeting those debts.
6(1) [Partly-completed execution] A Creditor who, before
the commencement of the Arrangement, has issued execution against the goods or
land of the Debtor in respect of a Debt which is subject to the Arrangement, or
has attached a Debt due to the Debtor from another person in respect of such a
Debt shall, unless the execution or attachment was completed before the commencement
of the Arrangement, discontinue the execution or attachment as soon after the
commencement of the Arrangement as is practicable.
6(2) [Completion
of execution or attachment] For the purposes of Sub-paragraph (1):
(a)an execution against
goods is completed by seizure and sale or by the making of a charging order
absolute under section 1 of the Charging Orders Act 1979;
(b)an execution against
land is completed by seizure, by the appointment of a receiver or by the making
of a charging order absolute under section 1 of the Charging Orders Act 1979;
an attachment of a Debt is completed by the receipt of the Debt.
7(1) [Application] This Paragraph applies where before
the commencement of the Arrangement there have been mutual credits, mutual
Debts or other mutual dealings between the Debtor and any Creditor other than
in the circumstances to which Paragraph 79 of these Conditions apply.
7(2) [Account to be taken] An account shall be taken
of what is due from each party to the other in respect of the mutual dealings
and the sums due from one party shall be set-off against the sums due from the
other.
7(3) [No account where Creditor has notice] Sums due from the Debtor
to another party shall not be included in the account taken under Sub-paragraph
(2) if that other party had notice at the time they became due that a
bankruptcy petition relating to the Debtor was pending or that an interim order
was made in relation to the Debtor.
7(4) [Restriction on post-commencement set-off] Other than as provided
for in this Paragraph, set-off shall not be available in respect of any Debt or
item of Property.
7(5) [Balance provable or to be paid] Only the balance (if any)
of the account taken under Sub-paragraph (2) is provable in the Arrangement or,
as the case may be, to be paid to the Debtor or, if the Proposal so provides,
to the Supervisor.
8(1) [General rule] Unless extended under the provisions
of these Conditions, the Arrangement shall continue until the end of the period
stated in the Proposal.
8(2) [Extension of duration by Supervisor] The Supervisor may, if he
thinks fit for the purposes of finalising the administration of the
Arrangement, extend the duration of the Arrangement by sending a notice to this
effect (“an Extension Notice”) to the Debtor and all Creditors. This may be
done on up to 2 occasions: for a period of up to 6 months in the first instance
and for a period of up to 3 months in the second instance.
8(3) [Extension Notice] An Extension Notice shall
be sent not less than 7 days prior to the date upon which the Arrangement is
otherwise due to complete and must state the reason or reasons for the
extension.
8(4) [Effect of
extension]
In the event of an Extension Notice being sent, the Arrangement shall continue
for the period specified therein, or for the maximum allowable period for that
extension (being 6 months for a first extension and 3 months for a second
extension) commencing on the date immediately after that on which the
Arrangement would otherwise have been completed, whichever is sooner.
8(5) [Supervening
notice calling a meeting of Creditors] In the event that a meeting of
Creditors has been called by the Supervisor for a time after the Arrangement
would otherwise have expired, the duration of the Arrangement shall be extended
to the date of that meeting and of any adjournment thereof.
8(6) [Further extension] Any extension for a period longer
than that provided for under Paragraph 8(2) shall require approval as a
variation in accordance with Paragraph 81.
9(1) [The Completion Certificate] Upon the expiration of the
Arrangement, the Supervisor shall, if the Debtor has complied with his
obligations under the Arrangement, issue a certificate (“the Completion Certificate”)
stating that the Proposal has been fully implemented.
9(2) [Effect of Completion Certificate] Save to the extent
provided in Paragraph 4(4), upon the issue by the Supervisor of a Completion
Certificate, the Debtor shall be released from all Debts which are subject to
the Arrangement.
9(3) [Notification of issue of Completion
Certificate] Copies of the Completion Certificate issued under this Paragraph shall
be sent by the Supervisor to the Debtor, the Creditors, the Secretary of State
for Trade and Industry and the Court together with the Supervisor’s report
under Rule 5.34 (completion or termination of Arrangement).
10(1) [Issue of certificate where substantial
compliance] The Supervisor may, if he thinks fit, issue a Completion Certificate
notwithstanding the fact that the Debtor has not complied with all of his
obligations under the Arrangement provided that the Debtor has:
(a)
made all payments required of him under the terms of the
Arrangement;
(b)
provided a full explanation of any breach of the terms of
the Arrangement required by the
Supervisor;
(c)
paid to the Supervisor such sum (if any) as the Supervisor
shall reasonably have required to compensate the Creditors for any reduction in
Dividend caused by the Debtor’s breach of the terms of the Arrangement.
10(2) [Notification to creditors] Where the Supervisor
proposes to issue a Completion Certificate under Sub-paragraph 1 he shall
notify the Creditors accordingly and invite them to submit any comments within
21 days from the date of notification.
10(3) [Treatment as full implementation] If the Supervisor issues a
Completion Certificate under Sub-paragraph (1), the Arrangement shall be
treated as fully implemented for the purposes of Rule 5.34.
11(1) [Termination in certain circumstances] The
Arrangement shall terminate upon:
(a)
the Supervisor issuing a Certificate of Termination under
Paragraph 71;
(b)
the making of a bankruptcy order against the Debtor;
(c)
the Debtor’s death,
none of which circumstances
shall affect the trusts created under Paragraph 28.
11(2) [Notice of
termination] The Supervisor shall, on discovering the occurrence of a terminating
event, but in any event not more than 28 days after such discovery, give notice
of such termination and the reason therefor to the Debtor (or, if the Debtor
has died, his representative) and Creditors.
12(1) [Primary
function]
The Supervisor’s primary function is to supervise the Debtor’s performance of
his obligations under the Arrangement and to administer the Arrangement.
12(2) [Other
functions]
The Supervisor shall also undertake such functions as are given to him in the
Proposal, Act and Rules.
13 Subject to those powers
more particularly given to him in the Arrangement, Act and Rules, the
Supervisor shall have the following powers:
(1) [Getting in assets] power to take possession of, collect, get in and
hold any or all of the assets which, under the terms of the Arrangement, he is
to hold as trustee;
(2) [Realisation of assets] power to sell or otherwise dispose of any
asset referred to in Sub-paragraph (1) in such manner as may seem to him
expedient;
(3) [Putting funds on deposit] power to place money coming into his
hands during the course of the Arrangement on deposit with any established
United Kingdom clearing bank or building society;
(4) [Appointing agents] power to engage legal representatives,
managers, agents and other persons to assist the Supervisor in the performance
of his functions under the Arrangement;
(5) [Delegation] power to delegate to his firm and any appropriate
partner, employee or agent thereof any or all of his duties and functions under
the Arrangement save those which by law he is required to perform personally;
(6) [Insurance] power to effect and maintain insurances in respect of
any asset subject to the Arrangement;
(7) [Power to claim] power to prove, rank, claim and draw a Dividend in
respect of such Debts owed to the Debtor as fall within the Arrangement;
(8) [Power to direct Debtor] power, in the event that the Supervisor is
unable or it is impracticable for him to do any act or thing which he is
empowered to do himself, to direct the Debtor to do that act or thing on his behalf;
(9) [Ancillary power] power to
do any other act or thing which is necessary or expedient for the purposes of
exercising the above powers or for carrying out his functions under the
Arrangement.
14(1) [Exercise of powers after
completion/termination] Completion and/or termination of the Arrangement shall not
affect the Supervisor’s power to carry out such of his functions and to
exercise such of his powers as are necessary for him to fully carry out his
duties, obligations and responsibilities under the Arrangement, Act and Rules
and to resolve such matters as may have arisen during the course of the
Arrangement.
14(2) [Retention of funds by Supervisor] Upon completion and/or
termination of the arrangement, the Supervisor shall be entitled to retain for
such period as he reasonably deems necessary from any funds under his control
such moneys as he reasonably thinks fit on account of his fees, costs, charges,
liabilities and expenses, and shall advise Creditors and the Debtor in writing
of the quantum of the funds so retained and the reasons why.
15(1) [Application of bankruptcy provisions] In the event that the
Arrangement does not provide guidance to the Supervisor as to what action he
should take in any given situation, the Supervisor shall apply the provisions
of the Act and Rules in so far as they relate to bankruptcy with necessary
modifications.
15(2) [Consultation of Creditors] If the Supervisor is
uncertain as to what action he should take in any situation, or wishes to
ascertain the wishes of Creditors on a matter concerning the Arrangement, he
may seek the advice and/or direction of the Creditors’ Committee and/or the
majority or most material of the Creditors and he may act upon such advice
and/or direction.
15(3) [Directions from the
Court] This
Paragraph is without prejudice to the Supervisor’s right to refer matters
concerning the Arrangement to the Court for guidance and/or directions if, in his
discretion, he shall think fit.
16(1) [Supervisor’s duty] The Supervisor shall be
under no obligation to perform any act or carry out any function save for those
expressly provided for in the Arrangement, the Act or Rules.
16(2) [Supervisor’s liability] Neither the Supervisor,
his firm or any of his agents or employees shall incur any personal liability
in negligence or otherwise for any act or omission carried out by him or any of
them in connection with the Arrangement, unless such act or omission
constitutes one of dishonesty or a breach of the Supervisor’s obligations under
the Act, Rules or the Arrangement.
17(1) [Amount of fees] The Supervisor shall be entitled to
charge fees for his services in accordance with the time actually and
reasonably expended by him and his staff in carrying out the Supervisor’s
functions under the Arrangement by reference to the ordinary hourly rates of
the Supervisor and his staff as shall apply from time to time.
17(2) [Payment of fees, costs and expenses] The fees, costs, charges
and expenses of the Supervisor shall be paid out of the assets of the
Arrangement from time to time as the Supervisor thinks fit. The Supervisor shall provide such information
to any Creditors’ committee appointed in relation to the Arrangement as is
reasonably necessary to explain how the fees, costs, charges and expenses were
determined or incurred, as the case may be.
17(3) [Supervisor’s right of recourse to Court] If the Supervisor is
dissatisfied with a determination of the Creditors Committee or a meeting of
Creditors on a matter involving his fees, costs, charges and/or expenses, he
shall have the right to refer the matter to the Court, whose decision on the
matter shall bind all parties.
18(1) [Methods of resignation] A Supervisor may resign
from office with the approval of a meeting of Creditors or with the leave of
the Court.
18(2) [Grounds of Supervisor’s resignation] The Supervisor may only
resign from office on one or more of the following grounds:
(a)
ill health;
(b)
cessation of practice as an insolvency practitioner;
(c)
change of circumstances rendering it impracticable for him
to continue in office;
(d)
impracticability to have the present number of persons
acting as Supervisor to the Arrangement.
18(3) [Report of Supervisor’s administration] The notice to Creditors
convening a meeting for the purpose of receiving his resignation shall specify
the grounds upon which the Supervisor wishes to resign and shall be accompanied
by a report of the Supervisor’s administration of the Arrangement which
includes an up to date summary of his receipts and payments.
19(1) [Methods of removal] On cause being shown, the
Supervisor may be removed from office by the Court or by a resolution of a
meeting of Creditors.
19(2) [Notice of requisitioned meeting] Any notice served by a
Creditor upon the Supervisor under Paragraph 60(2) (notice requisitioning
meeting) for the purpose of convening a meeting of Creditors to remove the
Supervisor from office must set out the grounds upon which his removal is
sought.
19(3) [Report of Supervisor’s administration] The notice sent out by
the Supervisor to Creditors convening such a requisitioned meeting shall
specify the grounds upon which his removal is sought and shall be accompanied
by a report of the Supervisor’s administration of the Arrangement including an
up to date summary of his receipts and payments.
20(1) [Resignation/removal of Supervisor where more
than one acting] If the Creditors resolve to accept the resignation of a Supervisor, or
to remove a Supervisor from office, and there will be another person in the
office of Supervisor for the time being, the Supervisor who is resigning or
being removed shall vacate office immediately.
20(2) [Resignation/removal of Supervisor where no
other acting] If the Creditors resolve to accept a Supervisor’s resignation or to
remove a Supervisor from office, and there is no other person in the office of
Supervisor for the time being, that resignation and/or removal shall not take
effect and the Supervisor shall not vacate office unless and until a meeting of
Creditors or the Court appoints a replacement Supervisor.
20(3) [Loss of qualification] The Supervisor shall
vacate office immediately if he ceases to be a person who is for the time being
qualified to act as Supervisor.
20(4) [Notice of vacation of office] A Supervisor who, for any
reason, vacates office shall forthwith give notice of that fact to the Court,
the Debtor the Creditors and the Secretary of State for Trade and Industry.
20(5) [Duties of Supervisor upon vacation of office] A Supervisor who, for any
reason, vacates office shall, as soon as practicable, deliver up to his
successor Supervisor or Supervisors all books, records and papers relating to
the Arrangement and his administration thereof together with all assets of
which he is a trustee under the terms of the Arrangement.
20(6) [Continuing duty of former Supervisor] Former Supervisors shall
be obliged to give such assistance to the Supervisor of the Arrangement from
time to time as he may reasonably require for ascertaining what transpired
during the tenure of office by the former Supervisor.
21(1) [Meeting of Creditors to fill vacancy] If, for any reason, there
is a vacancy in the office of Supervisor, that vacancy may be filled by a
meeting of Creditors or by the Court.
21(2) [Convening a meeting where no Supervisor
acting]
If no Supervisor is in office, such a meeting of Creditors may be convened by
the Debtor, any Creditor, any person who was in partnership with the Supervisor
immediately before the vacancy occurred, or by the former Supervisor’s
authorising body.
21(3) [Chairman where no Supervisor acting] In the event that a
meeting of Creditors is called when no Supervisor is in office, the person who
convened the meeting shall act as chairman of that meeting.
22(1) [Disclosure in Proposal] The Debtor warrants that
he has disclosed in the Proposal full and complete particulars of all matters
required of him under the Act and Rules including (without prejudice to the generality
of the foregoing) particulars of all of his assets, Debts and liabilities,
whether actual, contingent or prospective.
22(2) [Accuracy of Proposal] The Debtor warrants that
the contents of the Proposal are true and accurate in all material respects as
at the date of the commencement of the Arrangement, subject only to those
qualifications that may be disclosed by the Debtor at the meeting of Creditors
held to approve the arrangement, which qualifications shall be recorded by the
Supervisor in his report to the Court under Rule 5.27 (report of Creditors’
meeting).
22(3) [Disclosure of third party information] The Debtor authorises any
creditor to disclose to the Supervisor such information relating to the Debtor,
his dealings or property as may reasonably be required to assist in the
implementation of the Arrangement.
23(1) [Duty to co-operate with Supervisor] The Debtor undertakes and
agrees that during the subsistence of the Arrangement he will:
(a)give to the
Supervisor such information as to his assets, liabilities and other affairs;
(b)attend on the
Supervisor, his agents, representatives or nominees at such times; and
(c)do all such other
things;
as the Supervisor shall
reasonably require for the purpose of carrying out his functions and duties
under the Arrangement.
23(2) [Duty to submit accounts] The Debtor undertakes
and agrees to furnish the Supervisor with accounts relating to his affairs of
such nature, as at such date and for such period as the Supervisor may
reasonably require.
23(3) [Notice of after-acquired assets and increased
income]
Where at any time during the subsistence of the Arrangement After-Acquired
Property of a description falling within Paragraph 27 is acquired by or
devolves upon the Debtor, or there is an increase in the Debtor’s income if the
Debtor is under an obligation to make contributions out of income, the Debtor
shall forthwith give the Supervisor notice of the property or, as the case may
be, of the increase.
Without
prejudice to the generality of the Debtor’s other duties under the Arrangement,
the Debtor shall, at the request of the Supervisor, execute such Mortgages,
Charges, Deeds, Transfers, Trusts, Powers of Attorney or other documents as may
reasonably be required by the Supervisor for the protection and/or realisation
of assets, to secure the Debtor’s compliance with his obligations under the
Arrangement, or otherwise to facilitate the implementation of the Arrangement.
Property
other than Excluded Assets belonging to or vested in the Debtor at the date of
commencement of the Arrangement which would form part of the Debtor’s estate in
a bankruptcy shall be subject to the Arrangement and be an asset thereof.
27(1) [After-acquired
property subject to Arrangement] Subject to the following
Sub-paragraphs, the Supervisor may claim as an asset of the Arrangement any
Property acquired by the Debtor between the commencement date of the
Arrangement and the date of its completion and/or termination which would have
been capable of being an asset of the Arrangement if it belonged to or was
vested in the Debtor at the date of commencement of the Arrangement
(“After-Acquired Assets”). Any such
asset shall be subject to the Arrangement and be an asset thereof.
27(2)[Limit
on assets which may be claimed] Sub-paragraph (1) shall not apply to:
(a)such equipment, stock or other
effects as are necessary to the debtor for use personally by him in his
employment, business or vocation;
(b)such clothing, bedding, furniture,
household equipment and provisions as are necessary for supplying the domestic
needs of the debtor and his family.
27(3) [Proviso for excess assets] After-Acquired Assets
shall only be sold or realised to the extent necessary to repay the Creditors
in full together with interest, if any, to which Creditors are entitled
pursuant to the Arrangement.
28(1) [Assets in the possession of the Debtor] Property constituting an
asset of the Arrangement in the possession, custody or control of the Debtor
shall be held by the Debtor upon trust for the purposes of the Arrangement
until realisation thereof (if so provided) in accordance with the Arrangement.
28(2) [Assets in the
possession of the Supervisor] Property constituting an asset of the Arrangement in
the possession, custody or control of the Supervisor shall be held by the
Supervisor upon trust for the purposes of the Arrangement.
28(3) [Trusts to
survive termination of Arrangement] The trusts referred to in
Sub-paragraphs (1) and (2) shall not come to an end upon termination of the
Arrangement. Instead those assets shall be got in and realised by the
Supervisor, and any proceeds applied and distributed in accordance with the
terms of the Arrangement.
As soon as practicable
after the commencement of the Arrangement, and provided no application under
Section 262 of the Act (challenge of meeting’s decision) or an appeal under
Rule 5.22(3) (appeal from chairman’s decision) is pending, the Supervisor shall
send a notice (“a Notice to Submit Claims”) to every Creditor and other person
to whom the Debtor may be indebted of whom he has notice requiring them to
provide such details of their claims as the Supervisor thinks fit.
Creditors
shall submit their claims in writing to the Supervisor in the form, if any,
required by the Supervisor, or one which is substantially similar.
Creditor’s claim may at any time be
withdrawn or varied.
The
Supervisor may call for any document or other evidence to be produced to him,
where he thinks it necessary, for the purpose of substantiating the whole or
any part of the claim.
The Supervisor may, if he thinks it
necessary, require a claim to be verified by affidavit.
The
Supervisor shall, so long as claims lodged with him are in his hands, allow
them to be inspected, at all reasonable times on any business day, by:
(a)any
Creditor who has submitted his claim
(unless that claim has been wholly rejected for the purposes of Dividend or
otherwise); and
(b)the Debtor.
36(1) [Admission] A claim may be admitted for Dividend
either for the whole of the amount claimed by the Creditor, or for part of that
amount.
36(2) [Rejection] If the Supervisor rejects a claim in
whole or in part, he shall prepare a written statement of his reasons for so
doing and send it to the Creditor.
337(1) [Application by Creditor] If a Creditor is
dissatisfied with the Supervisor’s decision with respect to his claim or its
ranking he may apply to the Court, within 21 days (or such longer period as the
Court shall, in the special circumstances, allow) of receiving the statement
sent under Paragraph 36(2) for the decision to be reversed or varied.
37(2) [Application by Debtor or other Creditor] The Debtor or any other
Creditor may, if dissatisfied with the Supervisor’s decision admitting or
rejecting the whole or any part of a claim, make such an application within 21
days (or such longer period as the Court shall, in the special circumstances,
allow) of becoming aware of the Supervisor’s decision.
37(3) [Costs of appeal] The Supervisor is not personally
liable for the costs incurred by any person in respect of an appeal under this
Paragraph unless the Court so orders.
38(1) [Estimation of Debt or liability] The Supervisor shall
estimate the value of any Debt which, by reason of its being subject to a
contingency or for any other reason, does not bear a certain value.
38(2) [Notification to Creditor] The Supervisor shall
notify the Creditor in writing of any such estimate. If the Creditor is dissatisfied with the
Supervisor’s decision he may exercise his rights under paragraph 37.
38(3) [Claim of Debts of uncertain value] Where the value of any
Debt is estimated by the Supervisor under Sub-paragraph (1), the amount
provable in the Arrangement shall be the amount of the estimate.
39(1) [Proving for balance of Debt] A Secured Creditor may
claim for the balance of his Debt (if any), after deducting the value of his
Security.
39(2) [Voluntary surrender of Security] If a Secured Creditor
voluntarily surrenders his Security for the general benefit of the Creditors,
he may claim for his whole Debt, as if it were unsecured.
39(3) [Altering value of Security] A Secured Creditor may,
with the agreement of the Supervisor or the leave of the Court, at any time
alter the value which he has, in his claim, put upon his Security.
39(4) [Test of Security’s value] If the Supervisor is
dissatisfied with the value which a Secured Creditor puts on his Security
(whether in his claim or by way of re-valuation), he may require the Security
to be professionally valued by a person agreed as between the Creditor and the
Supervisor, or in default of such agreement by the Court.
39(5) [Professional valuation treated as amended
valuation] Where
a professional valuation has been carried out under the previous Sub-paragraph,
that valuation shall be treated as an amended valuation of the Creditor.
39(6) [Realisation of Security] If a Creditor who has
valued his Security subsequently realises it:
(a)the Creditor shall forthwith
notify the Supervisor and shall give the Supervisor
such information relating
thereto as he may reasonably require;
(b)the
net amount realised shall be substituted for the value previously put by the
Creditor on the Security, and
(c)that amount shall be treated in
all respects as an amended valuation by him.
40(1) [Conversion into
sterling]
For the purpose of claiming for a Debt incurred or payable in a currency other
than sterling, the amount of the Debt shall be converted into sterling at the
official exchange rate prevailing on the date of the commencement of the
Arrangement.
40(2) [The official
exchange rate] The official exchange rate is the middle exchange rate on the London
Foreign Exchange Market at the close of business, as published for the date in question.
In the absence of any such published rate, it is such rate as the Supervisor
and Creditor agree or, in default of such agreement, the Court determines.
Subject
to Paragraph 55 (adjustment of Dividend where payment made before time) a
Creditor may claim for a Debt of which payment was not yet due at the date of
commencement of the Arrangement.
Where
a Debt bears interest, that interest may be claimed as part of the Debt except
in so far as it is payable in respect of any period after the commencement of
the Arrangement.
43(1) [Creditor bears
cost of submitting claim] Every Creditor bears the cost of submitting his own claim,
including such cost as may be incurred in obtaining valuations, providing
documents, affidavits or other evidence to the Supervisor.
43(2) [Supervisor’s costs] Costs incurred by the
Supervisor in estimating the value of a Debt of uncertain value shall be an
expense of the Arrangement.
If at the time the claim is notified to the Supervisor
the arrangement is still in force and the Supervisor is holding sufficient
funds to make a distribution or Dividend to such Creditor or Creditors, then
the Supervisor will, subject to agreement of the claim, forthwith pay to the
Creditor a Dividend or distribution of an amount which is on the same basis as
the Dividends and distributions already paid.
Such payments will be made before any further payments to any other
Creditors and will be paid so as to bring about an equalisation in Dividends or
distributions between Creditors who fall within section 260 (2) (b) (i) on the
one hand and section 260 (2) (b) (ii) on the other hand.
If the claims are notified to the Supervisor at a time
when he is holding no funds available for distribution then as and when any
funds are received the Supervisor will subject to agreement of the claim, out
of such funds, first make such payment to such Creditors so as to bring about
an equalisation as aforesaid.
46(1)[Claim not to constitute
default] The
notification to the Supervisor of any such claim or claims shall not constitute
an act of default unless the failure to give notice to such Creditor was a
deliberate act on the part of the Debtor.
46(2)[Obligation to provide further
funds]
Unless the Proposal otherwise provides there shall be no obligation upon the
Debtor to pay to the Supervisor any further sums of money or make any further
assets available (other than already provided for in the Proposal) so as to
meet the claim falling to be dealt with under Rule 5.3 (2) (g) unless the
Proposal as agreed provides for a minimum Dividend to be paid to Creditors.
On receipt of any such claim the
Supervisor will notify all Creditors bound of such receipt, the name of the
Creditor, the amount claimed, and will provide such other information as may be
relevant including particulars as to the Debtor’s explanation why the Creditor
was not given notice, and also the impact which such claim is likely to have on
the outcome of the Arrangement. Such
notification may, if the Supervisor considers it appropriate, be included in
the annual report to Creditors given pursuant to Rule 5.31 provided that such
report is due to be circulated within a period of 3 months from the date on
which the claim is notified. Where, in the opinion of the Supervisor, the claim,
whether taken alone or in conjunction with other such claims, will not
materially reduce the amount of the estimated Dividend, he may defer
notification and include it in his next annual report under Rule 5.31.
If the claim is notified to the Supervisor after the date on
which the Arrangement ceases to have effect, then the Creditor shall be
entitled to rely upon section 260 (2A) of the Act and shall be entitled to
recover from the Debtor such sum as the Creditor would have received had the
claim been notified to the Supervisor prior to the date on which the
Arrangement ceased to have effect and the Supervisor had been able to include
the claim in the Arrangement for the purpose of payment of Dividends or
distributions. The Supervisor shall be
under no obligation to agree any such claim or take any action in respect
thereof other than to furnish the Creditor who relies on section 260 (2A) with
a certificate as to the Dividend or distribution the Creditor would have received
had the claim been included in the Arrangement for Dividend or distribution
purposes and on the assumption that the claim would have been agreed in the sum
claimed.
49(1) [Duty to
declare and distribute Dividends] At the time or times specified in
the Proposal or, if none, whenever the Supervisor has sufficient funds in hand
for the purpose, the Supervisor shall, subject to the retention of such sums as
he considers necessary for payment of the expenses of the Arrangement, declare
and distribute Dividends among the Creditors in respect of those of their
claims which have been admitted.
49(2) [Calculation and distribution of Dividend] In the calculation and
distribution of a Dividend the Supervisor shall make provision:
(a)for any Debts which are the
subject of claims which have not yet been determined; and
(b)for disputed claims.
50(2) [Last date for submitting claims] Any notice sent out to
Creditors under Sub-paragraph (1) shall specify a date (“the Last Date for
Submitting Claims”) up to which claims may be lodged. The Last date for
Submitting Claims shall be the same for all Creditors, and not less than 21
days from the date of the notice.
51(1)[Notice to Creditors who have claimed] The Supervisor shall give
notice of the Dividend to all Creditors who have submitted their claims.
51(2)[Particulars in notice] The notice shall include
the following particulars:
(a)amounts
realised from the sale of assets subject to the Arrangement and/or amounts paid
by the Debtor to the Supervisor under the Arrangement;
(b)payments made by the
Supervisor during the course of the Arrangement;
(c)provision (if any) made
for unsettled claims, and funds (if any) retained for particular purposes;
(d)the total amount to be
distributed, and the rate of Dividend;
(e)whether, and if so
when, any further Dividend is expected to be declared.
51(3)[Simultaneous distribution] The Dividend may be distributed
simultaneously with the notice declaring it.
51(4)[Method of payment] Payment of Dividend may be made by
post, or arrangements may be made with any Creditor for it to be paid in
another way, or held for his collection.
51(5)[Endorsement in negotiable instrument] Where a Dividend is paid
on a bill of exchange or other negotiable instrument, the amount of the
Dividend shall be endorsed on the instrument, or on a certified copy of it, if
required to be produced by the holder for that purpose.
52(1)[Amount claimed increased] If, after payment of Dividend, the
amount claimed by a Creditor is increased, the Creditor is not entitled to
disturb the distribution of the Dividend; but he is entitled to be paid, out of
any money for the time being available for the payment of any further Dividend,
any Dividend or Dividends which he has failed to receive before that money is
applied to the payment of any such further Dividend.
52(2)[Claim
withdrawn, disallowed, reduced] If, after a Creditor’s claim has been admitted, the
claim is withdrawn or disallowed, or the amount of it is reduced, the Creditor
shall repay to the Supervisor any amount overpaid by way of Dividend.
53(1)[Application of Paragraph] The following applies where a
Creditor re-values his Security at a time when a Dividend has been declared.
53(2)[Reduction in unsecured claim] If the re-valuation
results in a reduction of his unsecured claim ranking for Dividend, the
Creditor shall, as soon as practicable, repay to the Supervisor any amount
received by him as Dividend in excess of that to which he would be entitled
having regard to the re-valuation of the Security.
53(3)[Increase of unsecured claim] If the re-valuation
results in an increase of his unsecured claim, the Creditor is entitled to
receive from the Supervisor, out of any money for the time being available for
the payment of a further Dividend, before any such Dividend is paid, any
Dividend or Dividends which he has failed to receive, having regard to the
re-valuation of the Security. However, the Creditor is not entitled to disturb
any Dividend declared (whether or not distributed) before the date of the
revaluation.
54(1)[Notice of assignment] If a person entitled to a Dividend
gives notice to the Supervisor that he wishes the Dividend to be paid to
another person, or that he has assigned his entitlement or Debt to another
person, the Supervisor shall pay the Dividend to that other person accordingly.
54(2)[Contents of notice] A notice given under this Paragraph
must specify the name and address of the person to whom payment is to be made.
55(1)[Entitlement to Dividend] Where a Creditor has claimed for a
Debt of which payment is not due at the date of the declaration of Dividend, he
is entitled to Dividend equally with other Creditors, but subject as follows.
55(2)[Calculation of amount of reduction] For the purpose of
Dividend (and for no other purpose), the amount of the Creditor’s admitted
claim (or, if a distribution has previously been made to him, the amount
remaining outstanding in respect of his admitted claim) shall be reduced by a
percentage calculated as follows:
I x M
12
where I is 5 per cent and
M is the number of months (expressed, if need be, as or as including, fractions
of months) between the declaration of Dividend and the date when payment of the
Creditor’s Debt would otherwise be due.
5611)[Creditors not entitled to Dividend] Creditors who do not claim
in the Arrangement shall not be entitled to receive any Dividend.
56(2)[Unclaimed Dividends paid to Debtor] Dividends due to Creditors
who have claimed in the Arrangement but who have not claimed or been paid their
Dividends shall, at the end of the Arrangement, be paid to the Debtor.
56(13)[Debtor liable for unclaimed Dividends] Once a Dividend has been
paid to the Debtor under the previous Sub-paragraph, the Creditor must claim it
from the Debtor and no other person.
57(1)[Expenses
to be paid first] Subject to Paragraphs 5(3) and 72 the fees, costs, charges,
expenses and liabilities properly charged or incurred by or on behalf of the
Nominee or the Supervisor are expenses of the Arrangement and shall be paid in
priority to all other charges, expenses, liabilities and Debts.
57(2)[Charge in relation to expenses] The Supervisor shall
have a charge on the assets subject to the Arrangement in respect of the
expenses of the Arrangement.
58(1)[Priority of preferential Debts] In the distribution of
sums due to be paid to Creditors under the terms of the Arrangement,
Preferential Debts shall be paid in priority to other Debts.
58(2)[Ranking of preferential Debts] Preferential Debts rank
equally between themselves after the expenses of the Arrangement.
58(3)[Ranking of ordinary Debts] Debts other than Preferential Debts
rank equally between themselves and, after the Preferential Debts, shall be
paid in full unless the sums due to be paid to Creditors are insufficient for
meeting them, in which case they abate in equal proportions between themselves.
58(4)[Surplus after payment] Any surplus remaining after the
payment of the Preferential and other Debts shall first be applied in paying
interest on those Debts in respect of the periods during which they have been
outstanding since the commencement of the Arrangement (for this purpose
interest on Preferential Debts ranks equally with interest on Debts other than
Preferential Debts) and thereafter returned to the Debtor.
58(5)[Interest rate on surplus] The rate of interest payable under
Sub-paragraph (4) in respect of any Debt is whichever is the greater of the
following:
(a)the rate specified in section 17 of the Judgments Act
1838 at the commencement of the Arrangement; and
(b)the rate applicable to
that Debt apart from the Arrangement.
59(1)[Establishment] Any meeting of Creditors may
establish a committee (“the Creditors’ Committee”), consisting of not less than
3 and not more than 5 members to represent the interests of the Creditors and
to provide such assistance and guidance to the Supervisor as he may reasonably
require.
59(2)[Eligibility] All the members of the Creditors’
Committee must be Creditors of the Debtor; and any Creditor (other than one who
is fully secured) may be a member, so long as:
(a)he has lodged a claim,
and
(b)his claim has neither
been wholly disallowed for voting purposes, nor wholly rejected for the
purposes of distribution or Dividend.
59(3)[Application of Rules] The Rules relating to the Creditors’
Committee in a bankruptcy contained in Rules 6.151 to 6.163 shall apply to the
Arrangement with the modifications necessary to apply those rules to a
voluntary arrangement.
59(4)[Expenses of members] The reasonable travelling expenses
directly incurred by any member of the Creditors’ Committee or their
representatives in respect of their attendance at the meetings of the
Creditors’ Committee, or otherwise on the Creditors’ Committee’s business,
shall rank as an expense of the Arrangement.
60(1)[Supervisor’s power to call meetings] The Supervisor may, if he
thinks it desirable, summon and conduct meetings of Creditors for any purpose
connected with the Arrangement.
60(2)[Power to requisition a meeting] If requested in writing by
the Debtor, or by Creditors with not
less than one-quarter in value of the total amount of Debts subject to the
Arrangement, the Supervisor shall, unless relieved by the Court from so doing,
convene a meeting of Creditors within 21 days from the receipt of such request.
60(3)[Content of notice requisitioning meeting] A notice served upon the
Supervisor under Sub-paragraph (2) shall state the purpose for which the
meeting is to be held.
61(1)[Notice of meeting] Notice of a Creditor’s meeting shall
be given by the person convening the meeting to the Debtor and every Creditor
whose address is known to him or identified in the Proposal at least 14 days
before the date fixed for the meeting, or such shorter period as the Court may
allow.
61(2)[Contents of notice] The notice to Creditors shall specify
the purpose for which the meeting is convened and a time and date (not earlier
than 4.00 p.m. on the business day before the meeting) by which Creditors must
lodge proxies and those who have not already lodged claims must do so, in order
to be entitled to vote at the meeting.
61(3)[Forms of proxy] With every notice convening a
Creditors’ meeting there shall be sent out forms of proxy.
61(4)[Venue of meeting] In fixing the venue for a meeting of
Creditors, the person convening it shall have regard to the convenience of the
parties who may wish to attend.
61(5)[Time of meeting] Meetings of Creditors shall be
convened for commencement between the hours of 10.00 and 16.00 on a business
day, unless the Court otherwise directs.
61(6)[Chairman of meeting] Unless Paragraph 21(3) (chairman
where no Supervisor acting) applies, the Supervisor, or a person experienced in
insolvency matters and nominated by him, shall be chairman of the meeting.
62(1)[Security for payment of expenses] Subject to Sub-paragraph
(3) below, the cost of summoning and holding a meeting of Creditors at the
instance of the Debtor or Creditors under Paragraph 60(2) shall be paid by that
person or persons, who shall deposit security for their payment with the
Supervisor.
62(2)[Appropriate security] The sum to be deposited shall be such
as the Supervisor determines to be appropriate; and the Supervisor shall be
under no obligation to act without the deposit having been paid.
623)[Vote for cost to be an expense of arrangement] Where a meeting is so
summoned, it may vote that the expenses of convening and holding it shall rank
as an expense of the Arrangement.
62(4)[Repayment of deposit] To the extent that any deposit made
under this Paragraph is not required for the payment of expenses of convening
and holding the meeting, it shall be repaid to the person who made it.
63(1)[Conditions
for voting] Subject as follows, at a meeting of Creditors a person is entitled to
vote as a Creditor only if:
(a)
he has duly lodged his claim by the time and date stated in
the notice of the meeting, and
(b)
the claim has been admitted under the next Paragraph for the
purpose of entitlement to vote, and there has been lodged, by that time and
date, any proxy requisite for that entitlement.
63(2)[Unliquidated
and unascertained claims] A Creditor shall not vote in respect of a Debt for an
unliquidated amount, or any Debt whose value is not ascertained, except where
the Chairman agrees to put upon the Debt an estimated minimum value for the
purpose of entitlement to vote.
63(3)[Secured Creditors] A Secured Creditor is entitled to
vote only in respect of the balance (if any) of his Debt after deducting the
value of his Security as estimated by him.
64(1)[Chairman’s discretion] The chairman has power to admit or
reject a Creditor’s claim for the purpose of his entitlement to vote, and the
power is exercisable with respect to the whole or any part of the claim.
64(2)[Appeal from chairman’s decision] The chairman’s decision on
entitlement to vote is subject to appeal to the Court by any Creditor, or by
the Debtor, within 21 days of the meeting of Creditors at which the decision
was made, or such longer period as the Court shall, in the special
circumstances, allow.
64(3)[Voting subject to objection] If the chairman is in
doubt whether a claim should be admitted or rejected, he shall mark it objected
to and allow the Creditor to vote, subject to his vote being subsequently
declared invalid if the objection to the claim is sustained.
64(4)[Where chairman’s decision reversed] If, on an appeal, the
chairman’s decision is reversed or varied, or a Creditor’s vote is declared
invalid, the Court may order another meeting to be summoned, or make such other
order as it thinks fit, provided that the Court considers the matter is such as
to give rise to unfair prejudice or a material irregularity.
64(5)[Costs of appeal] The chairman is not personally liable
for the costs incurred by any person in respect of an appeal under this
Paragraph unless the Court so orders.
65(1)[Resolutions by majority in value] Subject as follows, at a
meeting of Creditors a resolution is passed when a majority in value of
Creditors present and voting, in person or by proxy, have voted in favour of
the resolution.
65(2)[Resolutions varying terms of Arrangement] In the case of a
resolution varying the terms of the Arrangement, a majority in excess of
three-quarters in value of those present and voting, in person or by proxy, is
required to pass the resolution.
65(3)[Votes rendering resolution
invalid] Any
resolution is invalid if those voting against it include more than half in
value of the Creditors who are not, to the best of the chairman’s belief,
Associates of the Debtor.
65(4)[Resolution for the appointment of Supervisor] In the case of a
resolution for the appointment of a Supervisor:
(a)
if on any vote there are 2 nominees for appointment, the
person who obtains the most support is appointed, provided that such support
represents a majority in value of all those present (in person or by proxy) at
the meeting and entitled to vote; and
(b)
if there are 3 or more nominees, and one of them has a clear
majority over both or all of the others together, that one is appointed; and
(c) in any other case, the chairman shall
continue to take votes (disregarding at each vote any nominee who has withdrawn
and, if no nominee has withdrawn, the nominee who obtained the least support
last time), until a clear majority is obtained for any one nominee.
65(5)[Resolution for joint appointment] The chairman may at any
time put to the meeting a resolution for the joint appointment of any 2 or more
nominees if he thinks it appropriate.
Where
the chairman at a meeting holds a proxy for a Creditor which requires him to
vote for a particular resolution, and no other person proposes that resolution,
he shall himself propose it
67(1)[Suspension] Once only in the course of any
meeting, the chairman may, in his discretion and without an adjournment,
declare the meeting suspended for any period up to one hour.
67(2)[Adjournment] The chairman at any meeting may, in
his discretion, and shall, if the meeting so resolves, adjourn it to such time
and place as seems to him to be appropriate in the circumstances; provided that
if the chairman is the Supervisor and a resolution has been proposed for his
removal, the chairman shall not adjourn the meeting without the consent of at
least one half in value of the Creditors present (in person or by proxy) and
entitled to vote.
67(3)[Period of adjournment] An adjournment under this Paragraph
shall not be for a period of more than 21 days, or such longer period as the
Court may allow.
67(4)[Use of claims and proxies at adjourned meeting] Where a meeting is
adjourned under this Paragraph, claims and proxies may be used if lodged at any
time up to 4.00 p.m. on the business day immediately before the adjourned
meeting.
68(1)[Minutes of proceedings] The chairman of any Creditors’
meeting shall cause minutes of the proceedings at the meeting, signed by him,
to be retained as part of the records of the Arrangement.
68(2)[List of Creditors attending] The chairman shall also
cause to be made and kept a list of all the Creditors who attended the meeting
either in person or by proxy and the amount of their claims for voting
purposes.
68(3)[Record of resolutions] The minutes of the meeting shall
include a record of the resolutions which were taken at the meeting and the
decision on each one.
68(4)[List of creditors to
be circulated]The list of Creditors referred to in Sub-paragraph (2) shall be sent
with the chairman’s report to Creditors, the Debtor and the Court.
69(1)[Application of procedure] The following procedure
may be utilised by the Supervisor, if he thinks fit, for the purposes of
ascertaining the wishes of Creditors on any matter concerning the Arrangement
other than the removal of the Supervisor.
69(2)[Notice of proposed resolution] The Supervisor may send to
the Debtor and every Creditor whose address is known to him or identified in
the Proposal a notice containing a copy of any proposed resolution on which a
decision is sought, which shall be set out in a such a way that agreement with
or dissent from each separate resolution may be indicated by the recipient on
the copy so sent.
69(3)[Contents of notice] The notice must specify a date (“the
Last Date for Voting”), not less that 21 days after the date of sending
thereof, by which Creditors must lodge their votes with the Supervisor and
those who have not already lodged claims must do so, in order to be entitled to
vote.
69(4)[Creditors requiring meeting] Creditors with one-quarter
in value of the total amount of Debts subject to the Arrangement may, within 14
days from the date upon which the Supervisor sent out the resolution, request
the Supervisor in writing to summon a meeting of Creditors to consider the
matters raised by the resolution and, if they so request, the Supervisor shall
call a meeting of Creditors for that purpose.
69(5)[Deemed passing of resolution] In the absence such a request,
the resolution is deemed to have been carried at a duly convened meeting of
Creditors, if, of the written votes received by the Supervisor by the end of
the Last Date for Voting, a sufficient majority of Creditors as defined in
Paragraph 61 entitled to vote on the resolution have indicated their consent to
the resolution in writing.
69(6)[Application of voting rights and majorities] The provisions of
Paragraphs 63(entitlement to vote), 64 (admission and rejection of claims) and
65 (majorities required to pass resolutions) shall apply to postal votes as
they do to votes at meetings of Creditors.
69(7)[Copy of resolutions] A copy of every resolution taken
under this Paragraph, together with copies of the votes of Creditors received
by the Supervisor endorsed by the Supervisor with the date upon which the vote
was received by him, shall be kept with the records of the Arrangement.
70 The Debtor shall be regarded as in
breach of the Arrangement if:
(a)
he fails to comply with any of his obligations under the
Arrangement;
(b)
information which was false or misleading in any material
particular or contains any material omissions:
(i)
was contained in any statement of affairs or other document
supplied by the Debtor under Part VIII under the Act to any person, or
(ii)
was otherwise made available by the Debtor to his Creditors
at or in connection with any meeting of Creditors held, or any postal
resolution taken, in connection with the
Arrangement, or
(c)
the Debtor fails to do all such things as may for the
purposes of the Arrangement have been reasonably required of him by the
Supervisor.
71(1)[Notice of Breach] If, at any time, it appears
to the Supervisor that the Debtor is in breach of the Arrangement, then, unless
such breach is remedied forthwith, he shall as soon as practicable issue to the
Debtor a notice (“Notice of Breach”) identifying the breach and requiring the
Debtor within one month of sending the notice:
(a) to remedy the breach if it is capable of
being remedied, and, if he thinks fit
(b) to give a full explanation of the
breach.
71(2)[Remedy
of breach] If,
within the one month period referred to in Sub-paragraph (1), or such longer
period not exceeding a further one month as the Supervisor shall reasonably
allow, the Debtor:
(a) remedies
his breach of the Arrangement;
(b) if
so required in the Notice of Breach, provides a full explanation of the breach,
and
(c) pays
to the Supervisor such sum (if any) as the Supervisor may reasonably require to
compensate the Creditors for any reduction in Dividend caused by the Debtor’s
breach,
no further action shall be
taken against the Debtor save that the Supervisor shall report the breach to
the Creditors when he next sends his comments to Creditors on the progress and
efficacy of the Arrangement under Rule 5.31 (Supervisor’s accounts and
reports), or on the next convenient occasion, if earlier.
71(3)[Certificate
of Termination/bankruptcy petition] If the Debtor has not done those
things specified in Sub-paragraph (2) by the time specified or allowed, the
Supervisor shall as soon as practicable convene a meeting of Creditors to
resolve whether or not to do the following things:
(i) issue
a certificate (“Certificate of Termination”) terminating the Arrangement by
reason of the Debtor’s breach;
(ii) present
a petition for the Debtor’s bankruptcy;
(iii) vary
the terms of the arrangement under Paragraph 81;
(iv) take
no action.
71(4)[Supervisor’s
duty] If
the Creditors resolve to issue a Certificate of Termination and/or to present a
bankruptcy petition against the Debtor, the Supervisor shall do so as soon as
practicable.
71(5)[Copies
of Certificate of Termination] A copy of any Certificate of Termination issued by
the Supervisor shall be sent to the Debtor and Creditors together with the
notice under Paragraph 11.
The
Supervisor shall, at all times during the course of the Arrangement, retain
sufficient of the funds coming into his hands as represents his best estimate
of the costs of petitioning for the Debtor’s bankruptcy should the Creditors so
direct under the previous Paragraph hereof.
Such costs shall be provided for in priority to any other costs of the
Arrangement.
73(1) The Inland Revenue provisional claim in the
Arrangement will include (i) any tax credit overpayment and (ii) Self-Assessment
payments on account due for the tax year which the Arrangement is approved,
PAYE/SC/NIC deductions due to the date of approval, plus any other earlier
unpaid liabilities
73(2) The Inland Revenue final claim in the Arrangement will
additionally include the Self-Assessment balancing adjustment for the tax year
in which the Arrangement is approved due with the Self-Assessment Return on the 31 January of the following year.
The debtor shall be
responsible for payment of Self-Assessment/NIC on any source of income that
commences after the date of approval of the Arrangement.
All
statutory returns and payments due to the Inland Revenue and Customs &
Excise post approval shall be provided on or before the date they fall due.
All
statutory accounts and returns overdue at the date of the creditors’ meeting
must be provided to the Inland Revenue and/or Customs and Excise within 3
months of the approval date together with any other information or explanations
required.
The
debtor’s monthly provision for income tax/NIC as it appears in the income and
expenditure statement shall, from the date of approval of the Arrangement to
the 5 April ending the tax year in which the Arrangement is approved, be paid
to the Supervisor for the benefit of the arrangement.
No
non preferential Dividend will be made until (i) the Inland Revenue Self-Assessment
return for the tax year in which the Arrangement is approved (ii) a VAT or
other levy or duty return due to Customs & Excise to the date of the
meeting, has been filed or (iii) an Inland Revenue Determination and/or a
Customs assessment has been made and the Supervisor has admitted their final
claims.
During
the currency of the Arrangement, any tax/excise/VAT or other repayments that
become due to the Debtor by Inland Revenue or Customs and Excise for periods
for which claims may arise under the Arrangement, shall be offset against either
department’s claims in the Arrangement.
Any remaining surplus shall be similarly applied to the claims of other
government departments before being offered to the Supervisor for the benefit
of the Arrangement. Any repayments for
any later periods shall be offset against any post approval debts due to Inland
Revenue or Customs and Excise. Any remaining surplus will then be treated as a
windfall and offered to the Supervisor for the benefit of the Arrangement.
80(1)[Application of Paragraph] This Paragraph applies where the
Proposal includes any obligation on the part of a person other than the
Supervisor or Debtor to pay moneys, transfer assets or do any other thing.
80(2)[Evidence of agreement] The third party shall sign the
Proposal or such other document evidencing his agreement to be bound by the
obligation as the Supervisor shall reasonably require.
80(3)[Enforcement of obligation] The obligations of the third party
shall be enforceable by the Supervisor, or by the Debtor at the direction of
the Supervisor.
80(4)[Failure a default of arrangement] The failure by the third
party to carry out the obligation when due shall constitute a breach of the
arrangement.
81(1)[Variation with Creditors’ approval] The provisions of this
Arrangement may be amended with the
approval of a meeting of Creditors.
81(2)[Consent of Debtor/third party to variation required] No variation of the
terms of the Arrangement shall be of any effect unless made with the consent of
the Debtor and any third party affected thereby.
81(3)[Saving for certain rights] No variation which
restricts the following rights shall be of effect:
(a)
the right of any Secured Creditor to enforce his Security,
except with the Secured Creditor’s consent;
(b)
the right of any Creditor to present a bankruptcy petition
under section 264(1)(c) of the Act for default in connection with Arrangement;
(c)
the right of a Preferential Creditor to be paid in priority
to other Creditors, except with that Creditor’s consent;
(d)
the right of a Preferential Creditor to be paid pro rata
with other Preferential Creditors, except with that Creditor’s consent.
81(4)[Unfair prejudice and material irregularity] No variation shall be of
effect if it unfairly prejudices the rights of any Creditor or if there has
been any material irregularity in the operation of the provisions of this
Paragraph.
81(5)[Restriction on variation] No variation shall be of effect if it
causes the Arrangement to cease to be a voluntary arrangement within Part VIII
of the Act.
82(1)[Tax to be paid out of proceeds] Taxation liabilities of the Debtor arising on the sale or other
realisation of any asset subject to the Arrangement shall, in so far as those
proceeds are sufficient, be discharged out of the sale proceeds of the asset in
question.
If
any provision or part of the Arrangement is found to be contrary to the Act or
Rules, illegal, invalid or contrary to public policy, that will not affect the
validity of the remainder of the Arrangement and the provision or part of the
Arrangement in question shall be construed accordingly.