Statutory Instrument 2003 No. 1730

The Insolvency (Amendment) Rules 2003

(The document as of February, 2008)

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STATUTORY INSTRUMENTS

2003 No. 1730

INSOLVENCY, ENGLAND AND WALES

COMPANIES
INDIVIDUALS

The Insolvency (Amendment) Rules 2003

	Made	8th August 2003
	Laid before Parliament	13th August 2003
	Coming into force in accordance with Rule 1

The Lord Chancellor, in the exercise of the powers conferred on him by sections 411 and 412 of the Insolvency Act 1986[1], with the concurrence of the Secretary of State, and after consulting the committee existing for that purpose under section 413 of that Act, hereby makes the following Rules: - 

Citation and commencement
    1. - (1) These Rules may be cited as the Insolvency (Amendment) Rules 2003.

    (2) This Rule and Rules 2, 3, 4 (and Part 1 of Schedule 1), 5 (and Part 2 of Schedule 1), 6 (and Part 3 of Schedule 1), 7 (and Part 4 of Schedule 1), 11 (and Part 8 of Schedule 1, save for the amendment to Rule 7.50), 12 (and Part 9 of Schedule 1), 13 (and paragraphs 65 and 66 of Part 10 of Schedule 1), 14(1)(a), 14(1)(b), 14(1)(e), 14(2)(a) (and Part A of Schedule 2), 14(2)(b) (and Part B of Schedule 2 to the extent only of Form 12.1), 14(2)(c)(i) (and Part C of Schedule 2 to the extent only of those Forms identified in Rule 14(2)(c)(i)), 14(3) and 15 shall come into force on 15th September 2003.

    (3) The remainder of these Rules and Parts of Schedules shall come into force on 1st April 2004.

Interpretation
    2. - (1) In these Rules references to the "principal Rules" are to the Insolvency Rules 1986[2] and a Rule referred to by number alone means the Rule so numbered in the principal Rules.

    (2) These Rules shall be construed as one with the principal Rules.

    (3) References in these Rules to "the first commencement date" are to the date referred to in paragraph (2) of Rule 1 and to "the second commencement date" are to the date referred to in paragraph (3) of Rule 1.

    (4) A reference to a "pre-commencement bankruptcy" is a reference to a bankruptcy where the bankruptcy order was made before the second commencement date and the bankrupt does not receive his discharge before that date.

Amendment to Introductory Provisions
    3.For paragraph (2) of Rule 0.3 there is substituted - 

    "(2) Rule 3.1 applies to all receivers to whom Part III of the Act applies, Rule 3.39 and 3.40 apply to all receivers who are not administrative receivers, and the remainder of Part 3 of the Rules applies to administrative receivers appointed otherwise than under section 51 (Scottish Receivership).".

Amendments to Part 1 of the principal Rules
    4.Part 1 of the principal Rules has effect subject to the amendments set out in Part 1 of Schedule 1 to these Rules.

Amendments to Part 2 of the principal Rules
    5. - (1) Subject to paragraphs (2), (3) and (4), for Part 2 of the principal Rules there are substituted the provisions set out in Part 2 of Schedule 1 to these Rules.

    (2) The provisions of Part 2 of Schedule 1 to these Rules shall not apply and Part 2 of the principal Rules as it stood before the coming into force of these Rules shall continue to apply, where a petition for an administration order has been presented to the court before the first commencement date.

    (3) The former Rules shall continue to apply (with or without modification made by or under any enactment) where a provision made by or under any enactment preserves the continuing operation (with or without modification) after the first commencement date of old Part II of the Act and in such a case the provisions of Part 2 of Schedule 1 to these Rules shall not apply.

    (4) In paragraph (3) "the former Rules" means the Insolvency Rules 1986 without the amendments made by these Rules and "old Part II" means Part II of the Act without the amendments made by the Enterprise Act 2002[3].

Amendments to Part 3 of the principal Rules
    6.Part 3 of the principal Rules has effect subject to the amendments set out in Part 3 of Schedule 1 to these Rules.

Amendments to Part 4 of the principal Rules
    7.Part 4 of the principal Rules has effect subject to the amendments set out in Part 4 of Schedule 1 to these Rules.

Amendments to Part 5 of the principal Rules
    8.Part 5 of the principal Rules has effect subject to the amendments set out in Part 5 of Schedule 1 to these Rules.

Amendments to Part 6 of the principal Rules
    9. - (1) Subject to paragraphs (2) and (3), Part 6 of the principal Rules has effect subject to the amendments set out in Part 6 of Schedule 1 to these Rules.

    (2) Rule 6.50 of the principal Rules shall continue to have effect and the amendment to Rule 6.50 in paragraph 34 of Part 6 of Schedule 1 to these Rules shall not have effect in relation to a pre-commencement bankruptcy where a certificate of summary administration has been issued under section 275.

    (3) In relation to a pre-commencement bankruptcy - 

(a) Rule 6.212A shall continue to have effect;

(b) Rules 6.213 and 6.214 of the principal Rules shall continue to have effect without the amendments made by paragraphs 44 and 45 of Part 6 of Schedule 1 to these Rules;

(c) Rule 6.214A as inserted by paragraph 46 of Part 6 of Schedule 1 to these Rules shall not apply.

    (4) Rules 6.215 and 6.216 as set out in paragraphs 47 and 48 of Part 6 of Schedule 1 to these Rules shall have effect in relation to pre-commencement bankruptcies in the same way as they apply to post-commencement bankruptcies.

New Part 6A of the principal Rules
    10.After Rule 6.251 of the principal Rules there is inserted the provisions set out in Part 7 of Schedule 1 to these Rules.

Amendments to Part 7 of the principal Rules
    11.Part 7 of the principal Rules has effect subject to the amendments set out in Part 8 of Schedule 1 to these Rules.

Amendments to Part 12 of the principal Rules
    12.Part 12 of the principal Rules has effect subject to the amendments set out in Part 9 of Schedule 1 to these Rules.

Amendments to Part 13 of the principal Rules
    13.Part 13 of the principal Rules has effect subject to the amendments set out in Part 10 of Schedule 1 to these Rules.

Amendments to Schedule 4 to the principal Rules
    14. - (1) In the index to forms in Schedule 4 to the principal Rules - 

(a) for the entries (including the form number) set out under the heading "Part 2: ADMINISTRATION PROCEDURE" there are substituted the following entries - 

    "2.1BAdministration application

    2.2BStatement of proposed administrator

    2.3BAffidavit of service of administration application

    2.4BAdministration order

    2.5BNotice of intention to appoint an administrator by holder of qualifying floating charge

    2.6BNotice of appointment of an administrator by holder of qualifying floating charge

    2.7BNotice of appointment of an administrator by holder of qualifying floating charge (For use in pursuance of Rule 2.19 of the Insolvency Rules 1986)

    2.8BNotice of intention to appoint an administrator by company or director(s)

    2.9BNotice of appointment of an administrator by company or director(s) (where a notice of intention to appoint has been issued)

    2.10BNotice of appointment of an administrator by company or director(s) (where a notice of intention to appoint has not been issued)

    2.11BNotification of appointment of administrator (for newspaper and London Gazette)

    2.12BNotice of administrator's appointment

    2.13BNotice requiring submission of a statement of affairs

    2.14BStatement of affairs

    2.15BStatement of concurrence

    2.16BNotice of statement of affairs

    2.17BStatement of administrator's proposals

    2.18BNotice of extension of time period

    2.19BNotice to attend meeting of creditors

    2.20BNotice of a meeting of creditors

    2.21BCreditor's request for a meeting

    2.22BStatement of administrator's revised proposals

    2.23BNotice of result of meeting of creditors

    2.24BAdministrator's progress report

    2.25BNotice of conduct of business by correspondence

    2.26B[Amended] Certificate of constitution of creditors' committee

    2.27BNotice by administrator of a change in committee membership

    2.28BNotice of order to deal with charged property

    2.29BAffidavit of debt

    2.30BNotice of automatic end of administration

    2.31BNotice of extension of period of administration

    2.32BNotice of end of administration

    2.33BNotice of court order ending administration

    2.34BNotice of move from administration to creditors' voluntary liquidation

    2.35BNotice of move from administration to dissolution

    2.36BNotice to registrar of companies in respect of date of dissolution

    2.37BNotice of intention to resign as administrator

    2.38BNotice of resignation by administrator

    2.39BNotice of vacation of office by administrator

    2.40BNotice of appointment of replacement/additional administrator";

(b) for the entry relating to Form 4.12 there is substituted "Order for Winding Up by the Court following upon the cessation of the appointment of an administrator";

(c) after the entry for Form 5.5 there are inserted the following form numbers and titles - 

    "5.6Voting form in relation to a proposal for a voluntary arrangement under section 263A of the Insolvency Act 1986

    5.7Order of annulment under section 261 of the Insolvency Act 1986

    5.8Order of annulment under section 263D of the Insolvency Act 1986";

(d) after the entry for Form 6.80 there are inserted the following form numbers and titles - 

    "6.81Variation of income payments agreement under section 310A of the Insolvency Act 1986

    6.82Notice under section 279(2) of the Insolvency Act 1986

    6.83Notice to interested parties of a dwelling-house falling within section 283A of the Insolvency Act 1986

    6.84Certificate issued pursuant to Rule 6.237B(1) of the Insolvency Rules 1986";

(e) after the entries relating to Part 9 there shall be inserted the following heading and entry - 

"PART 12:
MISCELLANEOUS AND GENERAL
    12.1Notice to the Registrar of Companies in respect of order under section 176A".

    (2) Subject to paragraphs (3) and (4), in Schedule 4 to the principal Rules - 

(a) for Forms 2.1 to 2.23 there are substituted the Forms 2.1B to 2.40B as set out in Part A of Schedule 2 to these Rules;

(b) the Forms set out in Part B of Schedule 2 to these Rules are inserted as Forms 5.6, 5.7, 5.8, 6.81, 6.82, 6.83, 6.84 and 12.1;

(c) for Forms - 


(i) 3.2, 4.12, 4.17, 4.18, 4.19, 4.52, 5.2, 6.1, 6.2, 6.3 and 6.25; and

(ii) 5.4, 6.30, 6.72, 6.73 and 6.79A



there are substituted the forms so numbered as set out in Part C of Schedule 2 to these Rules; and

(d) Form 6.31 is omitted.

    (3) In any case to which paragraphs (2), (3) or (4) of Rule 5 of these Rules applies, paragraph (2)(a) and paragraph (2)(c)(i) (but only insofar as it relates to Form 4.12) of this Rule shall not apply and the forms prescribed for use by the principal Rules as they stood before the coming into force of these Rules shall continue to be used.

    (4) In any case to which Rule 9(2) of these Rules applies, paragraph (2)(d) of this Rule shall not apply and the forms prescribed for use by the principal Rules as they stood before the coming into force of these Rules shall continue to be used.

Amendments to Schedule 5 to the principal Rules
    15. - (1) In Schedule 5 to the principal Rules - 

(a) for the entry in column 1 relating to "Rule 2.52(4)" there is substituted "Rule 2.47(6)";

(b) after that entry there are inserted the following entries - 

"Rule 2.111(3): Administrator failing to file a notice of automatic end of administration; summary; one-fifth of the statutory maximum; one-fiftieth of the statutory maximum";

Rule 2.129(2): Administrator's duties on vacating office; summary; one-fifth of the statutory maximum; one-fiftieth of the statutory maximum".

    (2) The provisions of this Rule shall not apply and Schedule 5 to the principal Rules as it stood before the coming into force of these Rules shall continue to apply in any case to which paragraphs (2), (3) or (4) of Rule 5 of these Rules applies.


Falconer of Thoroton
C.

30th July 2003



I concur, on behalf of the Secretary of State,


Nigel Griffiths,
Parliamentary Under-Secretary of State for Small Business and Enterprise, Department of Trade and Industry

8th August 2003

SCHEDULE 1Rules 4, 5(1), 6, 7, 8, 9(1), 10, 11, 12 and 13



PART 1
AMENDMENTS TO PART 1 OF THE PRINCIPAL RULES
Amendments to Rule 1.1
    1.In Rule 1.1 - 

(a) in sub-paragraph (a)(i) of paragraph (2) for the words "an administration order (under Part II of the Act) in force in relation to it" there are substituted "the company in administration"; and

(b) in sub-paragraph (b) of paragraph (2) for the words "an administration order is in force" there are substituted "the company is in administration".

Amendments to Rule 1.3
    2. - (1) After paragraph (2)(c) of Rule 1.3 there is inserted - 

"(ca) an estimate (to the best of the directors' knowledge and belief and subject to paragraph (4)) of - 


(i) the value of the prescribed part, should the company go into liquidation if the proposal for the voluntary arrangement is not accepted, whether or not section 176A is to be disapplied; and

(ii) the value of the company's net property on the date that the estimate is made."

    (2) After paragraph (3) there is inserted - 

    "(4) Nothing in paragraph (2)(ca) is to be taken as requiring the estimate referred to in that paragraph to include any information, the disclosure of which could seriously prejudice the commercial interests of the company. If such information is excluded from the calculation the estimate shall be accompanied by a statement to that effect.".

Amendments to Rule 1.10
    3.In Rule 1.10 - 

(a) in paragraph (1)(a) - 


(i) for the words "subject to an administration order" there are substituted "in administration";

(ii) after the words "Rule 1.3" there is inserted "(subject to paragraph (3) below)"; and



(b) after paragraph (2) there is inserted - 

    "(3) The administrator or liquidator shall include, in place of the estimate required by Rule 1.3(2)(ca), a statement which contains - 


(a) to the best of the administrator or liquidator's knowledge and belief - 


(i) an estimate of the value of the prescribed part (whether or not he proposes to make an application to court under section 176A(5) or section 176A(3) applies), and

(ii) an estimate of the value of the company's net property, and



(b) whether, and, if so, why, the administrator or liquidator proposes to make an application to court under section 176A(5).



    (4) Nothing in this Rule is to be taken as requiring any such estimate to include any information, the disclosure of which could seriously prejudice the commercial interests of the company. If such information is excluded from the calculation the estimate shall be accompanied by a statement to that effect.".

Amendment to Rule 1.13
    4.For Rule 1.13 there is substituted - 

    "(1) Subject as follows, in fixing the venue for the creditors' meeting and the company meeting, the person summoning the meeting ("the convener") shall have regard primarily to the convenience of the creditors.

    (2) Meetings shall in each case be summoned for commencement between 10.00 and 16.00 hours on a business day.

    (3) The meetings may be held on the same day or on different days. If held on the same day, the meetings shall be held in the same place, but in either case the creditors' meeting shall be fixed for a time in advance of the company meeting.

    (4) Where the meetings are not held on the same day, they shall be held within 7 days of each other.

    (5) With every notice summoning either meeting there shall be sent out forms of proxy.".

Amendments to Rule 1.17
    5.In paragraph (2) of Rule 1.17 for the words "subject to an administration order" there is substituted "in administration" and for the words "of the administration order" there is substituted "when the company entered administration".

Amendments to Rule 1.23
    6.In Rule 1.23 - 

(a) in paragraph (1)(b) for the words "subject to an administration order" there is substituted "in administration";

(b) in paragraph (2) - 


(i) for the words "subject to an administration order" there is substituted "in administration"; and

(ii) in sub-paragraph (b) for the words "became subject to the administration order" there is substituted "entered administration".

Amendment to Rule 1.29
    7.After paragraph (3) of Rule 1.29 there is inserted - 

    "4) In the report under paragraph (2), the supervisor shall include a statement as to the amount paid, if any, to unsecured creditors by virtue of the application of section 176A (prescribed part).".

Amendments to Rule 1.52
    8.In Rule 1.52 - 

(a) in paragraph 6(a) for "(5)" there is substituted "(4)"; and

(b) in paragraph (7) for "1.48(4)" there is substituted "1.48(5)".

PART 2
SUBSTITUTION OF PART 2 OF THE PRINCIPAL RULES
    9.For Part 2 of the principal Rules there is substituted - 

" PART2
ADMINISTRATION PROCEDURE


CHAPTER 1
PRELIMINARY
Introductory and interpretation
    2.1. - (1) In this Part - 


(a) Chapter 2 applies in relation to the appointment of an administrator by the court;

(b) Chapter 3 applies in relation to the appointment of an administrator by the holder of a qualifying floating charge under paragraph 14;

(c) Chapter 4 applies in relation to the appointment of an administrator by the company or the directors under paragraph 22;

(d) The following Chapters apply in all the cases mentioned in sub-paragraphs (a)-(c) above:

     -  Chapter 5: Process of administration;

     -  Chapter 6: Meetings and reports;

     -  Chapter 7: The creditors' committee;

     -  Chapter 8: Disposal of charged property;

     -  Chapter 9: Expenses of the administration;

     -  Chapter 10: Distributions to creditors;

     -  Chapter 11: The administrator; 

     -  Chapter 12: Ending administration;

     -  Chapter 13: Replacing administrator;

     -  Chapter 14: EC Regulation - conversion of administration into winding up;

     -  Chapter 15: EC Regulation - member State liquidator.

    (2) In this Part of these Rules a reference to a numbered paragraph shall, unless otherwise stated, be to the paragraph so numbered in Schedule B1 to the Act.





CHAPTER 2
APPOINTMENT OF ADMINISTRATOR BY COURT
Affidavit in support of administration application
    2.2. - (1) Where it is proposed to apply to the court for an administration order to be made in relation to a company, the administration application shall be in Form 2.1B and an affidavit complying with Rule 2.4 must be prepared and sworn, with a view to its being filed with the court in support of the application.

    (2) If the administration application is to be made by the company or by the directors, the affidavit shall be made by one of the directors, or the secretary of the company, stating himself to make it on behalf of the company or, as the case may be, on behalf of the directors.

    (3) If the application is to be made by creditors, the affidavit shall be made by a person acting under the authority of them all, whether or not himself one of their number. In any case there must be stated in the affidavit the nature of his authority and the means of his knowledge of the matters to which the affidavit relates.

    (4) If the application is to be made by the supervisor of a voluntary arrangement under Part I of the Act, it is to be treated as if it were an application by the company.

Form of application
    2.3. - (1) If made by the company or by the directors, the application shall state the name of the company and its address for service, which (in the absence of special reasons to the contrary) is that of the company's registered office.

    (2) If the application is made by the directors, it shall state that it is so made under paragraph 12(1)(b); but from and after making it is to be treated for all purposes as the application of the company.

    (3) If made by a single creditor, the application shall state his name and address for service.

    (4) If the application is made by two or more creditors, it shall state that it is so made (naming them); but from and after making it is to be treated for all purposes as the application of only one of them, named in the application as applying on behalf of himself and other creditors. An address for service for that one shall be specified.

    (5) There shall be attached to the application a written statement which shall be in Form 2.2B by each of the persons proposed to be administrator stating - 


(a) that he consents to accept appointment;

(b) details of any prior professional relationship(s) that he has had with the company to which he is to be appointed as administrator; and

(c) his opinion that it is reasonably likely that the purpose of administration will be achieved.



Contents of application and affidavit in support
    2.4. - (1) The administration application shall contain a statement of the applicant's belief that the company is, or is likely to become, unable to pay its debts, except where the applicant is the holder of a qualifying floating charge and is making the application in reliance on paragraph 35.

    (2) There shall be attached to the application an affidavit in support which shall contain - 



(a) a statement of the company's financial position, specifying (to the best of the applicant's knowledge and belief) the company's assets and liabilities, including contingent and prospective liabilities;

(b) details of any security known or believed to be held by creditors of the company, and whether in any case the security is such as to confer power on the holder to appoint an administrative receiver or to appoint an administrator under paragraph 14. If an administrative receiver has been appointed, that fact shall be stated;

(c) details of any insolvency proceedings in relation to the company including any petition that has been presented for the winding up of the company so far as within the immediate knowledge of the applicant;

(d) where it is intended to appoint a number of persons as administrators, details of the matters set out in paragraph 100(2) regarding the exercise of the function of the administrators; and

(e) any other matters which, in the opinion of those intending to make the application for an administration order, will assist the court in deciding whether to make such an order, so far as lying within the knowledge or belief of the applicant.



    (3) Where the application is made by the holder of a qualifying floating charge in reliance on paragraph 35, he shall give sufficient details in the affidavit in support to satisfy the court that he is entitled to appoint an administrator under paragraph 14.

    (4) The affidavit shall state whether, in the opinion of the person making the application, (i) the EC Regulation will apply and (ii) if so, whether the proceedings will be main proceedings or territorial proceedings.

Filing of application
    2.5. - (1) The application (and all supporting documents) shall be filed with the court, with a sufficient number of copies for service and use as provided by Rule 2.6.

    (2) Each of the copies filed shall have applied to it the seal of the court and be issued to the applicant; and on each copy there shall be endorsed the date and time of filing.

    (3) The court shall fix a venue for the hearing of the application and this also shall be endorsed on each copy of the application issued under paragraph (2).

    (4) After the application is filed, it is the duty of the applicant to notify the court in writing of the existence of any insolvency proceedings, and any insolvency proceedings under the EC Regulation, in relation to the company, as soon as he becomes aware of them.

Service of application
    2.6. - (1) In the following paragraphs of this Rule, references to the application are to a copy of the application issued by the court under Rule 2.5(2) together with the affidavit in support of it and the documents attached to the application.

    (2) Notification for the purposes of paragraph 12(2) shall be by way of service in accordance with Rule 2.8, verified in accordance with Rule 2.9.

    (3) The application shall be served in addition to those persons referred to in paragraph 12(2) - 



(a) if an administrative receiver has been appointed, on him;

(b) if there is pending a petition for the winding-up of the company, on the petitioner (and also on the provisional liquidator, if any);

(c) if a member State liquidator has been appointed in main proceedings in relation to the company, on him;

(d) on the person proposed as administrator;

(e) on the company, if the application is made by anyone other than the company;

(f) if a supervisor of a voluntary arrangement under Part I of the Act has been appointed, on him.



Notice to sheriff, etc
    2.7.The applicant shall as soon as reasonably practicable after filing the application give notice of its being made to - 



(a) any sheriff or other officer who to his knowledge is charged with an execution or other legal process against the company or its property; and

(b) any person who to his knowledge has distrained against the company or its property.



Manner in which service to be effected
    2.8. - (1) Service of the application in accordance with Rule 2.6 shall be effected by the applicant, or his solicitor, or by a person instructed by him or his solicitor, not less than 5 days before the date fixed for the hearing.

    (2) Service shall be effected as follows - 



(a) on the company (subject to paragraph (3) below), by delivering the documents to its registered office;

(b) on any other person (subject to paragraph (4) below), by delivering the documents to his proper address;

(c) in either case, in such other manner as the court may direct.



    (3) If delivery to a company's registered office is not practicable, service may be effected by delivery to its last known principal place of business in England and Wales.

    (4) Subject to paragraph (5), for the purposes of paragraph (2)(b) above, a person's proper address is any which he has previously notified as his address for service; but if he has not notified any such address, service may be effected by delivery to his usual or last known address.

    (5) In the case of a person who - 



(a) is an authorised deposit-taker or former authorised deposit-taker;

(b)


(i) has appointed, or is or may be entitled to appoint, an administrative receiver of the company, or

(ii) is, or may be, entitled to appoint an administrator of the company under paragraph 14; and



(c) has not notified an address for service,



the proper address is the address of an office of that person where, to the knowledge of the applicant, the company maintains a bank account or, where no such office is known to the applicant, the registered office of that person, or, if there is no such office, his usual or last known address.

    (6) Delivery of documents to any place or address may be made by leaving them there, or sending them by first class post.

Proof of service
    2.9. - (1) Service of the application shall be verified by an affidavit of service in Form 2.3B, specifying the date on which, and the manner in which, service was effected.

    (2) The affidavit of service, with a sealed copy of the application exhibited to it, shall be filed with the court as soon as reasonably practicable after service, and in any event not less than 1 day before the hearing of the application.

Application to appoint specified person as administrator by holder of qualifying floating charge
    2.10. - (1) Where the holder of a qualifying floating charge applies to the court under paragraph 36(1)(b), he shall produce to the court - 



(a) the written consent of all holders of any prior qualifying floating charge;

(b) a written statement in the Form 2.2B made by the specified person proposed by him as administrator; and

(c) sufficient evidence to satisfy the court that he is entitled to appoint an administrator under paragraph 14.



    (2) If an administration order is made appointing the specified person, the costs of the person who made the administration application and the applicant under paragraph 36(1)(b) shall, unless the court otherwise orders, be paid as an expense of the administration.

Application where company in liquidation
    2.11. - (1) Where an administration application is made under paragraph 37 or paragraph 38, the affidavit in support of the administration application shall contain - 



(a) full details of the existing insolvency proceedings, the name and address of the liquidator, the date he was appointed and by whom;

(b) the reasons why it has subsequently been considered appropriate that an administration application should be made;

(c) all other matters that would, in the opinion of the applicant, assist the court in considering the need to make provisions in respect of matters arising in connection with the liquidation; and

(d) the details required in Rules 2.4(2) and (4).



    (2) Where the application is made by the holder of a qualifying floating charge he shall set out sufficient evidence in the affidavit to satisfy the court that he is entitled to appoint an administrator under paragraph 14.

The hearing
    2.12. - (1) At the hearing of the administration application, any of the following may appear or be represented - 



(a) the applicant;

(b) the company;

(c) one or more of the directors;

(d) if an administrative receiver has been appointed, that person;

(e) any person who has presented a petition for the winding-up of the company;

(f) the person proposed for appointment as administrator;

(g) if a member State liquidator has been appointed in main proceedings in relation to the company, that person;

(h) any person that is the holder of a qualifying floating charge;

(j) any supervisor of a voluntary arrangement under Part I of the Act;

(k) with the permission of the court, any other person who appears to have an interest justifying his appearance.



    (2) If the court makes an administration order, it shall be in Form 2.4B.

    (3) If the court makes an administration order, the costs of the applicant, and of any person whose costs are allowed by the court, are payable as an expense of the administration.

    2.13.Where the court makes an administration order in relation to a company upon an application under paragraph 37 or 38, the court shall include in the order - 



(a) in the case of a liquidator appointed in a voluntary winding-up, his removal from office;

(b) details concerning the release of the liquidator;

(c) provision for payment of the expenses of the liquidation;

(d) provisions regarding any indemnity given to the liquidator;

(e) provisions regarding the handling or realisation of any of the company's assets in the hands of or under the control of the liquidator;

(f) such provision as the court thinks fit with respect to matters arising in connection with the liquidation; and

(g) such other provisions as the court shall think fit.



Notice of administration order
    2.14. - (1) If the court makes an administration order, it shall as soon as reasonably practicable send two sealed copies of the order to the person who made the application.

    (2) The applicant shall send a sealed copy of the order as soon as reasonably practicable to the person appointed as administrator.

    (3) If the court makes an order under paragraph 13(1)(d) or any other order under paragraph 13(1)(f), it shall give directions as to the persons to whom, and how, notice of that order is to be given.





CHAPTER 3
APPOINTMENT OF ADMINISTRATOR BY HOLDER OF FLOATING CHARGE
Notice of intention to appoint
    2.15. - (1) The prescribed form for the notice of intention to appoint for the purposes of paragraph 44(2) is Form 2.5B.

    (2) For the purposes of paragraph 44(2), a copy of Form 2.5B shall be filed with the court at the same time as it is sent in accordance with paragraph 15(1) to the holder of any prior qualifying floating charge.

    (3) The provisions of Rule 2.8(2) to 2.8(6) shall apply to the sending of a notice under this Rule as they apply to the manner in which service of an administration application is effected under that Rule.

Notice of appointment
    2.16. - (1) The notice of appointment for the purposes of an appointment under paragraph 14 shall be in Form 2.6B.

    (2) The copies of the notice filed with the court, shall be accompanied by - 


(a) the administrator's written statement in Form 2.2B; and

(b) either - 


(i) evidence that the person making the appointment has given such notice as may be required by paragraph 15(1)(a); or

(ii) copies of the written consent of all those required to give consent in accordance with paragraph 15(1)(b); and



(c) a statement of those matters provided for in paragraph 100(2), if applicable.



    (3) The statutory declaration on Form 2.6B shall be made not more than 5 business days before the form is filed with the court.

    (4) Written consent may be given by the holder of a prior qualifying floating charge where a notice of intention to appoint an administrator has been given and filed with the court in accordance with Rule 2.15 above, by completing the section provided on Form 2.5B and returning to the appointor a copy of the form.

    (5) Where the holder of a prior qualifying floating charge does not choose to complete the section provided on Form 2.5B to indicate his consent, or no such form has been sent to him, his written consent shall include - 



(a) details of the name, address of registered office and registered number of the company in respect of which the appointment is proposed to be made;

(b) details of the charge held by him including the date it was registered and, where applicable, any financial limit and any deeds of priority;

(c) his name and address;

(d) the name and address of the holder of the qualifying floating charge who is proposing to make the appointment;

(e) the date that notice of intention to appoint was given;

(f) the name of the proposed administrator;

(g) a statement of consent to the proposed appointment,



and it shall be signed and dated.

    (6) This Rule and the following Rule are subject to Rule 2.19, the provisions of which apply when an appointment is to be made out of court business hours.

    2.17. - (1) Three copies of the notice of appointment shall be filed with the court and shall have applied to them the seal of the court and be endorsed with the date and time of filing.

    (2) The court shall issue two of the sealed copies of the notice of appointment to the person making the appointment, who shall as soon as reasonably practicable send one of the sealed copies to the administrator.

    2.18.Where, after receiving notice that an administration application has been made, the holder of a qualifying floating charge appoints an administrator in reliance on paragraph 14, he shall as soon as reasonably practicable send a copy of the notice of appointment to the person making the administration application and to the court in which the application has been made.

Appointment taking place out of court business hours
    2.19. - (1) The holder of a qualifying floating charge may file a notice of appointment with the court, notwithstanding that the court is not open for public business. When the court is closed (and only when it is closed) a notice of appointment may be filed with the court by faxing that form in accordance with paragraph (3). The notice of appointment shall be in Form 2.7B.

    (2) The filing of a notice in accordance with this Rule shall have the same effect for all purposes as a notice of appointment filed in accordance with Rule 2.16 with the court specified in the notice as having jurisdiction in the case.

    (3) The notice shall be faxed to a designated telephone number which shall be provided by the Court Service for that purpose. The Secretary of State shall publish the telephone number of the relevant fax machine on The Insolvency Service website and on request to The Insolvency Service, make it available in writing.

    (4) The appointor shall ensure that a fax transmission report detailing the time and date of the fax transmission and containing a copy of the first page (in part or in full) of the document faxed is created by the fax machine that is used to fax the form.

    (5) The appointment shall take effect from the date and time of that fax transmission. The appointor shall notify the administrator, as soon as reasonably practicable, that the notice has been filed.

    (6) The copy of the faxed notice of appointment received by the Court Service fax machine shall be forwarded as soon as reasonably practicable to the court specified in the notice as the court having jurisdiction in the case, to be placed on the relevant court file.

    (7) The appointor shall take three copies of the notice of appointment that was faxed to the designated telephone number, together with the transmission report showing the date and time that the form was faxed to the designated telephone number and all the necessary supporting documents listed on Form 2.7B, to the court on the next day that the court is open for business.

    (8) The appointor shall attach to the notice a statement providing full reasons for the out of hours filing of the notice of appointment, including why it would have been damaging to the company and its creditors not to have so acted.

    (9) The copies of the notice shall be sealed by the court and shall be endorsed with the date and time when, according to the appointor's fax transmission report, the notice was faxed and the date when the notice and accompanying documents were delivered to the court.

    (10) The administrator's appointment shall cease to have effect if the requirements of paragraph (7) are not completed within the time period indicated in that paragraph.

    (11) Where any question arises in respect of the date and time that the notice of appointment was filed with the court it shall be a presumption capable of rebuttal that the date and time shown on the appointor's fax transmission report is the date and time at which the notice was so filed.

    (12) The court shall issue two of the sealed copies of the notice of appointment to the person making the appointment, who shall, as soon as reasonably practicable, send one of the copies to the administrator.





CHAPTER 4
APPOINTMENT OF ADMINISTRATOR BY COMPANY OR DIRECTORS
Notice of intention to appoint
    2.20. - (1) The notice of intention to appoint an administrator for the purposes of paragraph 26 shall be in Form 2.8B.

    (2) A copy of the notice of intention to appoint must, in addition to the persons specified in paragraph 26, be given to - 


(a) any sheriff who, to the knowledge of the person giving the notice, is charged with execution or other legal process against the company;

(b) any person who, to the knowledge of the person giving the notice, has distrained against the company or its property;

(c) any supervisor of a voluntary arrangement under Part I of the Act; and

(d) the company, if the company is not intending to make the appointment.



    (3) The provisions of Rule 2.8(2) to 2.8(6) shall apply to the sending or giving of a notice under this Rule as they apply to the manner in which service of an administration application is effected under that Rule.

    2.21.The statutory declaration on Form 2.8B shall be made not more than 5 business days before the notice is filed with the court.

    2.22.The notice of intention to appoint shall be accompanied by either a copy of the resolution of the company to appoint an administrator (where the company intends to make the appointment) or a record of the decision of the directors (where the directors intend to make the appointment).

Notice of appointment
    2.23. - (1) The notice of appointment for the purposes of an appointment under paragraph 22 shall be in Form 2.9B or Form 2.10B, as appropriate.

    (2) The copies of the notice filed with the court shall be accompanied by - 



(a) the administrator's written statement in Form 2.2B;

(b) the written consent of all those persons to whom notice was given in accordance with paragraph 26(1) unless the period of notice set out in paragraph 26(1) has expired; and

(c) a statement of the matters provided for in paragraph 100(2), where applicable.



    2.24.The statutory declaration on Form 2.9B or Form 2.10B shall be made not more than 5 business days before the notice is filed with the court.

    2.25.Where a notice of intention to appoint an administrator has not been given, the notice of appointment shall be accompanied by the documents specified in Rule 2.22 above.

    2.26. - (1) Three copies of the notice of appointment shall be filed with the court and shall have applied to them the seal of the court and be endorsed with the date and time of filing.

    (2) The court shall issue two of the sealed copies of the notice of appointment to the person making the appointment who shall as soon as reasonably practicable send one of the sealed copies to the administrator.





CHAPTER 5
PROCESS OF ADMINISTRATION
Notification and advertisement of administrator's appointment
    2.27. - (1) The administrator shall advertise his appointment once in the Gazette, and once in such newspaper as he thinks most appropriate for ensuring that the appointment comes to the notice of the company's creditors. The advertisement shall be in Form 2.11B.

    (2) The administrator shall, as soon as reasonably practicable after the date specified in paragraph 46(6), give notice of his appointment - 


(a) if a receiver or an administrative receiver has been appointed, to him;

(b) if there is pending a petition for the winding up of the company, to the petitioner (and also to the provisional liquidator, if any);

(c) to any sheriff who, to the administrator's knowledge, is charged with execution or other legal process against the company;

(d) to any person who, to the administrator's knowledge, has distrained against the company or its property; and

(e) any supervisor of a voluntary arrangement under Part I of the Act.



    (3) Where, under a provision of Schedule B1 to the Act or these Rules, the administrator is required to send a notice of his appointment to any person he shall do so in Form 2.12B.

Notice requiring statement of affairs
    2.28. - (1) In this Chapter "relevant person" shall have the meaning given to it in paragraph 47(3).

    (2) The administrator shall send notice in Form 2.13B to each relevant person whom he determines appropriate requiring him to prepare and submit a statement of the company's affairs.

    (3) The notice shall inform each of the relevant persons - 



(a) of the names and addresses of all others (if any) to whom the same notice has been sent;

(b) of the time within which the statement must be delivered;

(c) of the effect of paragraph 48(4) (penalty for non-compliance); and

(d) of the application to him, and to each other relevant person, of section 235 (duty to provide information, and to attend on the administrator, if required).



    (4) The administrator shall furnish each relevant person to whom he has sent notice in Form 2.13B with the forms required for the preparation of the statement of affairs.

Verification and filing
    2.29. - (1) The statement of the company's affairs shall be in Form 2.14B, contain all the particulars required by that form and be verified by a statement of truth by the relevant person.

    (2) The administrator may require any relevant person to submit a statement of concurrence in Form 2.15B stating that he concurs in the statement of affairs. Where the administrator does so, he shall inform the person making the statement of affairs of that fact.

    (3) The statement of affairs shall be delivered by the relevant person making the statement of truth, together with a copy, to the administrator. The relevant person shall also deliver a copy of the statement of affairs to all those persons whom the administrator has required to make a statement of concurrence.

    (4) A person required to submit a statement of concurrence shall do so before the end of the period of 5 business days (or such other period as the administrator may agree) beginning with the day on which the statement of affairs being concurred with is received by him.

    (5) A statement of concurrence may be qualified in respect of matters dealt with in the statement of affairs, where the maker of the statement of concurrence is not in agreement with the relevant person, or he considers the statement of affairs to be erroneous or misleading, or he is without the direct knowledge necessary for concurring with it.

    (6) Every statement of concurrence shall be verified by a statement of truth and be delivered to the administrator by the person who makes it, together with a copy of it.

    (7) Subject to Rule 2.30 below, the administrator shall as soon as reasonably practicable send to the registrar of companies and file with the court a Form 2.16B together with a copy of the statement of affairs and any statement of concurrence.

Limited disclosure
    2.30. - (1) Where the administrator thinks that it would prejudice the conduct of the administration for the whole or part of the statement of the company's affairs to be disclosed, he may apply to the court for an order of limited disclosure in respect of the statement, or any specified part of it.

    (2) The court may, on such application, order that the statement or, as the case may be, the specified part of it, shall not be filed with the registrar of companies.

    (3) The administrator shall as soon as reasonably practicable send to the registrar of companies a Form 2.16B together with a copy of the order and the statement of affairs (to the extent provided by the order) and any statement of concurrence.

    (4) If a creditor seeks disclosure of a statement of affairs or a specified part of it in relation to which an order has been made under this Rule, he may apply to the court for an order that the administrator disclose it or a specified part of it. The application shall be supported by written evidence in the form of an affidavit.

    (5) The applicant shall give the administrator notice of his application at least 3 days before the hearing.

    (6) The court may make any order for disclosure subject to any conditions as to confidentiality, duration, the scope of the order in the event of any change of circumstances, or other matters as it sees fit.

    (7) If there is a material change in circumstances rendering the limit on disclosure or any part of it unnecessary, the administrator shall, as soon as reasonably practicable after the change, apply to the court for the order or any part of it to be rescinded.

    (8) The administrator shall, as soon as reasonably practicable after the making of an order under paragraph (7) above, file with the registrar of companies Form 2.16B together with a copy of the statement of affairs to the extent provided by the order.

    (9) When the statement of affairs is filed in accordance with paragraph (8), the administrator shall, where he has sent a statement of proposals under paragraph 49, provide the creditors with a copy of the statement of affairs as filed, or a summary thereof.

    (10) The provisions of Part 31 of the CPR shall not apply to an application under this Rule.

Release from duty to submit statement of affairs; extension of time
    2.31. - (1) The power of the administrator under paragraph 48(2) to give a release from the obligation imposed by paragraph 47(1), or to grant an extension of time, may be exercised at the administrator's own discretion, or at the request of any relevant person.

    (2) A relevant person may, if he requests a release or extension of time and it is refused by the administrator, apply to the court for it.

    (3) The court may, if it thinks that no sufficient cause is shown for the application, dismiss it without a hearing but it shall not do so without giving the relevant person at least 7 days' notice, upon receipt of which the relevant person may request the court to list the application for a without notice hearing. If the application is not dismissed the court shall fix a venue for it to be heard, and give notice to the relevant person accordingly.

    (4) The relevant person shall, at least 14 days before the hearing, send to the administrator a notice stating the venue and accompanied by a copy of the application and of any evidence which he (the relevant person) intends to adduce in support of it.

    (5) The administrator may appear and be heard on the application and, whether or not he appears, he may file a written report of any matters which he considers ought to be drawn to the court's attention.

If such a report is filed, a copy of it shall be sent by the administrator to the relevant person, not later than 5 days before the hearing.

    (6) Sealed copies of any order made on the application shall be sent by the court to the relevant person and the administrator.

    (7) On any application under this Rule the relevant person's costs shall be paid in any event by him and, unless the court otherwise orders, no allowance towards them shall be made out of the assets.

Expenses of statement of affairs
    2.32. - (1) A relevant person making the statement of the company's affairs or statement of concurrence shall be allowed, and paid by the administrator out of his receipts, any expenses incurred by the relevant person in so doing which the administrator considers reasonable.

    (2) Any decision by the administrator under this Rule is subject to appeal to the court.

    (3) Nothing in this Rule relieves a relevant person from any obligation with respect to the preparation, verification and submission of the statement of affairs, or to the provision of information to the administrator.

Administrator's proposals
    2.33. - (1) The administrator shall, under paragraph 49, make a statement which he shall send to the registrar of companies attached to Form 2.17B.

    (2) The statement shall include, in addition to those matters set out in paragraph 49 - 



(a) details of the court where the proceedings are and the relevant court reference number;

(b) the full name, registered address, registered number and any other trading names of the company;

(c) details relating to his appointment as administrator, including the date of appointment and the person making the application or appointment and, where there are joint administrators, details of the matters set out in paragraph 100(2);

(d) the names of the directors and secretary of the company and details of any shareholdings in the company they may have;

(e) an account of the circumstances giving rise to the appointment of the administrator;

(f) if a statement of the company's affairs has been submitted, a copy or summary of it, with the administrator's comments, if any;

(g) if an order limiting the disclosure of the statement of affairs (under Rule 2.30) has been made, a statement of that fact, as well as - 


(i) details of who provided the statement of affairs;

(ii) the date of the order of limited disclosure; and

(iii) the details or a summary of the details that are not subject to that order;



(h) if a full statement of affairs is not provided, the names, addresses and debts of the creditors including details of any security held;

(j) if no statement of affairs has been submitted, details of the financial position of the company at the latest practicable date (which must, unless the court otherwise orders, be a date not earlier than that on which the company entered administration), a list of the company's creditors including their names, addresses and details of their debts, including any security held, and an explanation as to why there is no statement of affairs;

(k) the basis upon which it is proposed that the administrator's remuneration should be fixed under Rule 2.106;

(l) (except where the administrator proposes a voluntary arrangement in relation to the company and subject to paragraph (3)) - 



(i) to the best of the administrator's knowledge and belief - 


(aa) an estimate of the value of the prescribed part (whether or not he proposes to make an application to court under section 176A(5) or section 176A(3) applies); and

(bb) an estimate of the value of the company's net property; and



(ii) whether, and, if so, why, the administrator proposes to make an application to court under section 176A(5);



(m) how it is envisaged the purpose of the administration will be achieved and how it is proposed that the administration shall end. If a creditors' voluntary liquidation is proposed, details of the proposed liquidator must be provided, and a statement that, in accordance with paragraph 83(7) and Rule 2.117(3), creditors may nominate a different person as the proposed liquidator, provided that the nomination is made after the receipt of the proposals and before the proposals are approved;

(n) where the administrator has decided not to call a meeting of creditors, his reasons;

(o) the manner in which the affairs and business of the company - 



(i) have, since the date of the administrator's appointment, been managed and financed, including, where any assets have been disposed of, the reasons for such disposals and the terms upon which such disposals were made; and

(ii) will, if the administrator's proposals are approved, continue to be managed and financed;



(p) whether - 



(i) the EC Regulation applies; and

(ii) if so, whether the proceedings are main proceedings or territorial proceedings; and



(q) such other information (if any) as the administrator thinks necessary to enable creditors to decide whether or not to vote for the adoption of the proposals.



    (3) Nothing in paragraph (2)(l) is to be taken as requiring any such estimate to include any information, the disclosure of which could seriously prejudice the commercial interests of the company. If such information is excluded from the calculation the estimate shall be accompanied by a statement to that effect.

    (4) Where the court orders, upon an application by the administrator under paragraph 107, an extension of the period of time in paragraph 49(5), the administrator shall notify in Form 2.18B all the persons set out in paragraph 49(4) as soon as reasonably practicable after the making of the order.

    (5) Where the administrator has made a statement under paragraph 52(1) and has not called an initial meeting of creditors, the proposals sent out under this Rule and paragraph 49 will (if no meeting has been requisitioned under paragraph 52(2) within the period set out in Rule 2.37(1)) be deemed to have been approved by the creditors.

    (6) Where the administrator intends to apply to the court (or file a notice under paragraph 80(2)) for the administration to cease at a time before he has sent a statement of his proposals to creditors in accordance with paragraph 49, he shall, at least 10 days before he makes such an application (or files such a notice), send to all creditors of the company (so far as he is aware of their addresses) a report containing the information required by paragraphs (2)(a)-(p) of this Rule.

    (7) Where the administrator wishes to publish a notice under paragraph 49(6) he shall publish the notice once in such newspaper as he thinks most appropriate for ensuring that the notice comes to the attention of the company's members. The notice shall - 



(a) state the full name of the company;

(b) state the full name and address of the administrator;

(c) give details of the administrator's appointment; and

(d) specify an address to which members can write for a copy of the statement of proposals.



    (8) This notice must be published as soon as reasonably practicable after the administrator sends his statement of proposals to the company's creditors but no later than 8 weeks (or such other period as may be agreed by the creditors or as the court may order) from the date that the company entered administration.





CHAPTER 6
MEETINGS AND REPORTS
SECTION A: CREDITORS' MEETINGS
Meetings to consider administrator's proposals
    2.34. - (1) Notice of an initial creditors' meeting shall (unless the court otherwise directs) be given by notice in the newspaper in which the administrator's appointment was advertised and, if he considers it appropriate to do so, in such other newspaper as he thinks most appropriate for ensuring that the notice comes to the attention of the company's creditors.

    (2) Notice in Form 2.19B to attend the meeting shall be sent out at the same time to any directors or officers of the company (including persons who have been directors or officers in the past) whose presence at the meeting is, in the administrator's opinion, required.

    (3) Where the court orders an extension to the period set out in paragraph 51(2)(b) the administrator shall send a notice in Form 2.18B to each person to whom he is required to send notice by paragraph 49(4).

    (4) If at the meeting there is not the requisite majority for approval of the administrator's proposals (with modifications, if any), the chairman may, and shall if a resolution is passed to that effect, adjourn the meeting for not more than 14 days and may only adjourn once (subject to any direction by the court).

Creditors' meetings generally
    2.35. - (1) This Rule applies to creditors' meetings summoned by the administrator under - 


(a) paragraph 51 (initial creditors' meeting);

(b) paragraph 52(2) (at the request of the creditors);

(c) paragraph 54(2) (to consider revision to the administrator's proposals);

(d) paragraph 56(1) (further creditors' meetings); and

(e) paragraph 62 (general power to summon meetings of creditors).



    (2) Notice of any of the meetings set out in paragraph (1) above shall be in Form 2.20B.

    (3) In fixing the venue for the meeting, the administrator shall have regard to the convenience of creditors and the meeting shall be summoned for commencement between 10.00 and 16.00 hours on a business day, unless the court otherwise directs.

    (4) Subject to paragraphs (6) and (7) below, at least 14 days' notice of the meeting shall be given to all creditors who are known to the administrator and had claims against the company at the date when the company entered administration unless that creditor has subsequently been paid in full; and the notice shall - 



(a) specify the purpose of the meeting;

(b) contain a statement of the effect of Rule 2.38 (entitlement to vote); and

(c) contain the forms of proxy.



    (5) If within 30 minutes from the time fixed for commencement of the meeting there is no person present to act as chairman, the meeting stands adjourned to the same time and place in the following week or, if that is not a business day, to the business day immediately following.

    (6) The meeting may be adjourned once, if the chairman thinks fit, but not for more than 14 days from the date on which it was fixed to commence, subject to the direction of the court.

    (7) If a meeting is adjourned the administrator shall as soon as reasonably practicable notify the creditors of the venue of the adjourned meeting.

The chairman at meetings
    2.36. - (1) At any meeting of creditors summoned by the administrator, either he shall be chairman, or a person nominated by him in writing to act in his place.

    (2) A person so nominated must be either - 



(a) one who is qualified to act as an insolvency practitioner in relation to the company; or

(b) an employee of the administrator or his firm who is experienced in insolvency matters.



Meeting requisitioned by creditors
    2.37. - (1) The request for a creditors' meeting under paragraph 52(2) or 56(1) shall be in Form 2.21B. A request for an initial creditors' meeting shall be made within 12 days of the date on which the administrator's statement of proposals is sent out. A request under paragraph 52(2) or 56(1) shall include - 



(a) a list of the creditors concurring with the request, showing the amounts of their respective debts in the administration;

(b) from each creditor concurring, written confirmation of his concurrence; and

(c) a statement of the purpose of the proposed meeting,



but sub-paragraph (a) does not apply if the requisitioning creditor's debt is alone sufficient without the concurrence of other creditors.

    (2) A meeting requested under paragraph 52(2) or 56(1) shall be held within 28 days of the administrator's receipt of the notice requesting the meeting.

    (3) The expenses of summoning and holding a meeting at the request of a creditor shall be paid by that person, who shall deposit with the administrator security for their payment.

    (4) The sum to be deposited shall be such as the administrator may determine, and he shall not act without the deposit having been made.

    (5) The meeting may resolve that the expenses of summoning and holding it are to be payable out of the assets of the company as an expense of the administration.

    (6) To the extent that any deposit made under this Rule is not required for the payment of expenses of summoning and holding the meeting, it shall be repaid to the person who made it.

Entitlement to vote
    2.38. - (1) Subject as follows, at a meeting of creditors in administration proceedings a person is entitled to vote only if - 



(a) he has given to the administrator, not later than 12.00 hours on the business day before the day fixed for the meeting, details in writing of the debt which - 


(i) he claims to be due to him from the company; or

(ii) in relation to a member State liquidator, is claimed to be due to creditors in proceedings in relation to which he holds office;



(b) the claim has been duly admitted under the following provisions of this Rule; and

(c) there has been lodged with the administrator any proxy which he intends to be used on his behalf,



and details of the debt must include any calculation for the purposes of Rules 2.40 to 2.42.

    (2) The chairman of the meeting may allow a creditor to vote, notwithstanding that he has failed to comply with paragraph (1)(a), if satisfied that the failure was due to circumstances beyond the creditor's control.

    (3) The chairman of the meeting 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.

    (4) Votes are calculated according to the amount of a creditor's claim as at the date on which the company entered administration, less any payments that have been made to him after that date in respect of his claim and any adjustment by way of set-off in accordance with Rule 2.85 as if that Rule were applied on the date that the votes are counted.

    (5) 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 and admits the claim for that purpose.

    (6) No vote shall be cast by virtue of a claim more than once on any resolution put to the meeting.

    (7) Where - 



(a) a creditor is entitled to vote under this Rule;

(b) has lodged his claim in one or more sets of other proceedings; and

(c) votes (either in person or by proxy) on a resolution put to the meeting; and

(d) the member State liquidator casts a vote in respect of the same claim,



only the creditor's vote shall be counted.

    (8) Where - 



(a) a creditor has lodged his claim in more than one set of other proceedings; and

(b) more than one member State liquidator seeks to vote by virtue of that claim,



the entitlement to vote by virtue of that claim is exercisable by the member State liquidator in main proceedings, whether or not the creditor has lodged his claim in the main proceedings.

    (9) For the purposes of paragraph (6), the claim of a creditor and of any member State liquidator in relation to the same debt are a single claim.

    (10) For the purposes of paragraphs (7) and (8), "other proceedings" means main proceedings, secondary proceedings or territorial proceedings in another member State.

Admission and rejection of claims
    2.39. - (1) At any creditors' meeting 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.

    (2) The chairman's decision under this Rule, or in respect of any matter arising under Rule 2.38, is subject to appeal to the court by any creditor.

    (3) If the chairman is in doubt whether a claim should be admitted or rejected, he shall mark it as objected to and allow the creditor to vote, subject to his vote being subsequently declared invalid if the objection to the claim is sustained.

    (4) If on an appeal the chairman's decision is reversed or varied, or a creditor's vote is declared invalid, the court may order that another meeting be summoned, or make such other order as it thinks fit.

    (5) In the case of the meeting summoned under paragraph 51 to consider the administrator's proposals, an application to the court by way of appeal under this Rule against a decision of the chairman shall not be made later than 14 days after the delivery of the administrator's report in accordance with paragraph 53(2).

    (6) Neither the administrator nor any person nominated by him to be chairman is personally liable for costs incurred by any person in respect of an appeal to the court under this Rule, unless the court makes an order to that effect.

Secured creditors
    2.40. - (1) At a meeting of 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.

    (2) However, in a case where the administrator has made a statement under paragraph 52(1)(b) and an initial creditors' meeting has been requisitioned under paragraph 52(2) then a secured creditor is entitled to vote in respect of the full value of his debt without any deduction of the value of his security.

Holders of negotiable instruments
    2.41.A creditor shall not vote in respect of a debt on, or secured by, a current bill of exchange or promissory note, unless he is willing - 



(a) to treat the liability to him on the bill or note of every person who is liable on it antecedently to the company, and against whom a bankruptcy order has not been made (or, in the case of a company, which has not gone into liquidation), as a security in his hands; and

(b) to estimate the value of the security and, for the purpose of his entitlement to vote, to deduct it from his claim.



Hire-purchase, conditional sale and chattel leasing agreements
    2.42. - (1) Subject as follows, an owner of goods under a hire-purchase or chattel leasing agreement, or a seller of goods under a conditional sale agreement, is entitled to vote in respect of the amount of the debt due and payable to him by the company on the date that the company entered administration.

    (2) In calculating the amount of any debt for this purpose, no account shall be taken of any amount attributable to the exercise of any right under the relevant agreement, so far as the right has become exercisable solely by virtue of the making of an administration application, a notice of intention to appoint an administrator or any matter arising as a consequence, or of the company entering administration.

Resolutions
    2.43. - (1) Subject to paragraph (2), at a creditors' meeting in administration proceedings, 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) Any resolution is invalid if those voting against it include more than half in value of the creditors to whom notice of the meeting was sent and who are not, to the best of the chairman's belief, persons connected with the company.

Minutes
    2.44. - (1) The chairman of the meeting shall cause minutes of its proceedings to be entered in the company's minute book.

    (2) The minutes shall include a list of the names and addresses of creditors who attended (personally or by proxy) and, if a creditors' committee has been established, the names and addresses of those elected to be members of the committee.

Revision of the administrator's proposals
    2.45. - (1) The administrator shall, under paragraph 54, make a statement setting out the proposed revisions to his proposals which he shall attach to Form 2.22B and send to all those to whom he is required to send a copy of his revised proposals.

    (2) The statement of revised proposals shall include - 



(a) details of the court where the proceedings are and the relevant court reference number;

(b) the full name, registered address, registered number and any other trading names of the company;

(c) details relating to his appointment as administrator, including the date of appointment and the person making the administration application or appointment;

(d) the names of the directors and secretary of the company and details of any shareholdings in the company they may have;

(e) a summary of the initial proposals and the reason(s) for proposing a revision;

(f) details of the proposed revision including details of the administrator's assessment of the likely impact of the proposed revision upon creditors generally or upon each class of creditors (as the case may be);

(g) where a proposed revision relates to the ending of the administration by a creditors' voluntary liquidation and the nomination of a person to be the proposed liquidator of the company, a statement that, in accordance with paragraph 83(7) and Rule 2.117(3), creditors may nominate a different person as the proposed liquidator, provided that the nomination is made after the receipt of the revised proposals and before those revised proposals are approved; and

(h) any other information that the administrator thinks necessary to enable creditors to decide whether or not to vote for the proposed revisions.



    (3) Subject to paragraph 54(3), within 5 days of sending out the statement in paragraph (1) above, the administrator shall send a copy of the statement to every member of the company.

    (4) When the administrator is acting under paragraph 54(3), the notice shall be published once in such newspaper as he thinks most appropriate for ensuring that the notice comes to the attention of the company's members. The notice shall - 



(a) state the full name of the company;

(b) state the name and address of the administrator;

(c) specify an address to which members can write for a copy of the statement; and

(d) be published as soon as reasonably practicable after the administrator sends the statement to creditors.



Notice to creditors
    2.46.As soon as reasonably practicable after the conclusion of a meeting of creditors to consider the administrator's proposals or revised proposals, the administrator shall - 



(a) send notice in Form 2.23B of the result of the meeting (including details of any modifications to the proposals that were approved) to every creditor who received notice of the meeting and any other person who received a copy of the original proposals; and

(b) file with the court, and send to the registrar of companies, and any creditors who did not receive notice of the meeting (of whose claim he has become subsequently aware), a copy of Form 2.23B, attaching a copy of the proposals considered at the meeting.



Reports to creditors
    2.47. - (1) "Progress report" means a report which includes - 



(a) details of the court where the proceedings are and the relevant court reference number;

(b) full details of the company's name, address of registered office and registered number;

(c) full details of the administrator's name and address, date of appointment and name and address of appointor, including any changes in office-holder, and, in the case of joint administrators, their functions as set out in the statement made for the purposes of paragraph 100(2);

(d) details of any extensions to the initial period of appointment;

(e) details of progress during the period of the report, including a receipts and payments account (as detailed in paragraph (2) below);

(f) details of any assets that remain to be realised; and

(g) any other relevant information for the creditors.



    (2) A receipts and payments account shall state what assets of the company have been realised, for what value, and what payments have been made to creditors or others. The account is to be in the form of an abstract showing receipts and payments during the period of the report and where the administrator has ceased to act, the receipts and payments account shall include a statement as to the amount paid to unsecured creditors by virtue of the application of section 176A (prescribed part).

    (3) The progress report shall cover - 



(a) the period of 6 months commencing on the date that the company entered administration, and every subsequent period of 6 months; and

(b) when the administrator ceases to act, any period from the date of the previous report, if any, and from the date that the company entered administration if there is no previous report, until the time that the administrator ceases to act.



    (4) The administrator shall send a copy of the progress report, attached to Form 2.24B, within 1 month of the end of the period covered by the report, to - 



(a) the creditors;

(b) the court; and

(c) the registrar of companies.



    (5) The court may, on the administrator's application, extend the period of 1 month mentioned in paragraph (4) above, or make such other order in respect of the content of the report as it thinks fit.

    (6) If the administrator makes default in complying with this Rule, he is liable to a fine and, for continued contravention, to a daily default fine.

Correspondence instead of creditors' meetings
    2.48. - (1) The administrator may seek to obtain the passing of a resolution by the creditors by sending a notice in Form 2.25B to every creditor who is entitled to be notified of a creditors' meeting under Rule 2.35(4).

    (2) In order to be counted, votes must be received by the administrator by 12.00 hours on the closing date specified on Form 2.25B and must be accompanied by the statement in writing on entitlement to vote required by Rule 2.38.

    (3) If any votes are received without the statement as to entitlement, or the administrator decides that the creditor is not entitled to vote according to Rules 2.38 and 2.39, then that creditor's votes shall be disregarded.

    (4) The closing date shall be set at the discretion of the administrator. In any event it must not be set less than 14 days from the date of issue of the Form 2.25B.

    (5) For any business to be transacted the administrator must receive at least 1 valid Form 2.25B by the closing date specified by him.

    (6) If no valid Form 2.25B is received by the closing date specified then the administrator shall call a meeting of the creditors in accordance with Rule 2.35.

    (7) Any single creditor, or a group of creditors, of the company whose debt(s) amount to at least 10% of the total debts of the company may, within 5 business days from the date of the administrator sending out a resolution or proposals, require him to summon a meeting of creditors to consider the matters raised therein in accordance with Rule 2.37. Any meeting called under this Rule shall be conducted in accordance with Rule 2.35.

    (8) If the administrator's proposals or revised proposals are rejected by the creditors pursuant to this Rule, the administrator may call a meeting of creditors.

    (9) A reference in these Rules to anything done, or required to be done, at, or in connection with, or in consequence of, a creditors' meeting includes a reference to anything done in the course of correspondence in accordance with this Rule.



SECTION B: COMPANY MEETINGS
Venue and conduct of company meeting
    2.49. - (1) Where the administrator summons a meeting of members of the company, he shall fix a venue for it having regard to their convenience.

    (2) The chairman of the meeting shall be the administrator or a person nominated by him in writing to act in his place.

    (3) A person so nominated must be either - 


(a) one who is qualified to act as an insolvency practitioner in relation to the company; or

(b) an employee of the administrator or his firm who is experienced in insolvency matters.



    (4) If within 30 minutes from the time fixed for commencement of the meeting there is no person present to act as chairman, the meeting stands adjourned to the same time and place in the following week or, if that is not a business day, to the business day immediately following.

    (5) Subject as above, the meeting shall be summoned and conducted as if it were a general meeting of the company summoned under the company's articles of association, and in accordance with the applicable provisions of the Companies Act.

    (6) Paragraph (5) does not apply where the laws of a member State and not the laws of England and Wales apply in relation to the conduct of the meeting. The meeting shall be summoned and conducted in accordance with the constitution of the company and the laws of the member State referred to in this paragraph shall apply to the conduct of the meeting.

    (7) The chairman of the meeting shall cause minutes of its proceedings to be entered in the company's minute book.





CHAPTER 7
THE CREDITORS' COMMITTEE
Constitution of committee
    2.50. - (1) Where it is resolved by a creditors' meeting to establish a creditors' committee for the purposes of the administration, the committee shall consist of at least 3 and not more than 5 creditors of the company elected at the meeting.

    (2) Any creditor of the company is eligible to be a member of the committee, so long as his claim has not been rejected for the purpose of his entitlement to vote.

    (3) A body corporate may be a member of the committee, but it cannot act as such otherwise than by a representative appointed under Rule 2.55 below.

Formalities of establishment
    2.51. - (1) The creditors' committee does not come into being, and accordingly cannot act, until the administrator has issued a certificate in Form 2.26B of its due constitution.

    (2) No person may act as a member of the committee unless and until he has agreed to do so and, unless the relevant proxy or authorisation contains a statement to the contrary, such agreement may be given by his proxy-holder or representative under section 375 of the Companies Act present at the meeting establishing the committee.

    (3) The administrator's certificate of the committee's due constitution shall not be issued unless and until at least 3 of the persons who are to be members of the committee have agreed to act and shall be issued as soon as reasonably practicable thereafter.

    (4) As and when the others (if any) agree to act, the administrator shall issue an amended certificate in Form 2.26B.

    (5) The certificate, and any amended certificate, shall be filed with the court and a copy sent to the registrar of companies by the administrator, as soon as reasonably practicable.

    (6) If after the first establishment of the committee there is any change in its membership, the administrator shall as soon as reasonably practicable report the change to the court and the registrar of companies in Form 2.27B.

Functions and meetings of the committee
    2.52. - (1) The creditors' committee shall assist the administrator in discharging his functions, and act in relation to him in such manner as may be agreed from time to time.

    (2) Subject as follows, meetings of the committee shall be held when and where determined by the administrator.

    (3) The administrator shall call a first meeting of the committee not later than 6 weeks after its first establishment, and thereafter he shall call a meeting - 


(a) if so requested by a member of the committee or his representative (the meeting then to be held within 14 days of the request being received by the administrator); and

(b) for a specified date, if the committee has previously resolved that a meeting be held on that date.



    (4) The administrator shall give 7 days' written notice of the venue of any meeting to every member of the committee (or his representative designated for that purpose), unless in any case the requirement of notice has been waived by or on behalf of any member. Waiver may be signified either at or before the meeting.

The chairman at meetings
    2.53. - (1) Subject to Rule 2.62(3), the chairman at any meeting of the creditors' committee shall be the administrator or a person nominated by him in writing to act.

    (2) A person so nominated must be either - 



(a) one who is qualified to act as an insolvency practitioner in relation to the company; or

(b) an employee of the administrator or his firm who is experienced in insolvency matters.



Quorum
    2.54.A meeting of the committee is duly constituted if due notice of it has been given to all the members, and at least 2 members are present or represented.

Committee-members' representatives
    2.55. - (1) A member of the committee may, in relation to the business of the committee, be represented by another person duly authorised by him for that purpose.

    (2) A person acting as a committee-member's representative must hold a letter of authority entitling him so to act (either generally or specially) and signed by or on behalf of the committee-member, and for this purpose any proxy or any authorisation under section 375 of the Companies Act in relation to any meeting of creditors of the company shall, unless it contains a statement to the contrary, be treated as a letter of authority to act generally signed by or on behalf of the committee-member.

    (3) The chairman at any meeting of the committee may call on a person claiming to act as a committee-member's representative to produce his letter of authority, and may exclude him if it appears that his authority is deficient.

    (4) No member may be represented by a body corporate, a person who is an undischarged bankrupt, a disqualified director or a person who is subject to a composition or arrangement with his creditors.

    (5) No person shall on the same committee, act at one and the same time as representative of more than one committee-member.

    (6) Where a member's representative signs any document on the member's behalf, the fact that he so signs must be stated below his signature.

Resignation
    2.56.A member of the committee may resign by notice in writing delivered to the administrator.

Termination of membership
    2.57. - (1) Membership of the creditors' committee is automatically terminated if the member - 



(a) becomes bankrupt, or compounds or arranges with his creditors; or

(b) at 3 consecutive meetings of the committee is neither present nor represented (unless at the third of those meetings it is resolved that this Rule is not to apply in his case); or

(c) ceases to be, or is found never to have been, a creditor.



    (2) However, if the cause of termination is the member's bankruptcy, his trustee in bankruptcy replaces him as a member of the committee.

Removal
    2.58.A member of the committee may be removed by resolution at a meeting of creditors' at least 14 days' notice having been given of the intention to move that resolution.

Vacancies
    2.59. - (1) The following applies if there is a vacancy in the membership of the creditors' committee.

    (2) The vacancy need not be filled if the administrator and a majority of the remaining members of the committee so agree, provided that the total number of members does not fall below the minimum required under Rule 2.50(1).

    (3) The administrator may appoint any creditor (being qualified under the Rules to be a member of the committee) to fill the vacancy, if a majority of the other members of the committee agree to the appointment, and the creditor concerned consents to act.

Procedure at meetings
    2.60. - (1) At any meeting of the creditors' committee, each member of it (whether present himself, or by his representative) has one vote; and a resolution is passed when a majority of the members present or represented have voted in favour of it.

    (2) Every resolution passed shall be recorded in writing, either separately or as part of the minutes of the meeting.

    (3) A record of each resolution shall be signed by the chairman and placed in the company's minute book.

Resolutions of creditors' committee by post
    2.61. - (1) In accordance with this Rule, the administrator may seek to obtain the agreement of members of the creditors' committee to a resolution by sending to every member (or his representative designated for the purpose) a copy of the proposed resolution.

    (2) Where the administrator makes use of the procedure allowed by this Rule, he shall send out to members of the committee or their representatives (as the case may be) a copy of any proposed resolution on which a decision is sought, which shall be set out in such a way that agreement with or dissent from each separate resolution may be indicated by the recipient on the copy so sent.

    (3) Any member of the committee may, within 7 business days from the date of the administrator sending out a resolution, require him to summon a meeting of the committee to consider matters raised by the resolution.

    (4) In the absence of such a request, the resolution is deemed to have been passed by the committee if and when the administrator is notified in writing by a majority of the members that they concur with it.

    (5) A copy of every resolution passed under this Rule, and a note that the committee's concurrence was obtained, shall be placed in the company's minute book.

Information from administrator
    2.62. - (1) Where the committee resolves to require the attendance of the administrator under paragraph 57(3)(a), the notice to him shall be in writing signed by the majority of the members of the committee for the time being. A member's representative may sign for him.

    (2) The meeting at which the administrator's attendance is required shall be fixed by the committee for a business day, and shall be held at such time and place as he determines.

    (3) Where the administrator so attends, the members of the committee may elect any one of their number to be chairman of the meeting, in place of the administrator or a nominee of his.

Expenses of members
    2.63. - (1) Subject as follows, the administrator shall, out of the assets of the company, defray any reasonable travelling expenses directly incurred by members of the creditors' committee or their representatives in relation to their attendance at the committee's meetings, or otherwise on the committee's business, as an expense of the administration.

    (2) Paragraph (1) does not apply to any meeting of the committee held within 6 weeks of a previous meeting, unless the meeting in question is summoned at the instance of the administrator.

Members' dealing with the company
    2.64. - (1) Membership of the committee does not prevent a person from dealing with the company while the company is in administration, provided that any transactions in the course of such dealings are in good faith and for value.

    (2) The court may, on the application of any person interested, set aside any transaction which appears to it to be contrary to the requirements of this Rule, and may give such consequential directions as it thinks fit for compensating the company for any loss which it may have incurred in consequence of the transaction.

Formal defects
    2.65.The acts of the creditors' committee established for any administration are valid notwithstanding any defect in the appointment, election or qualifications of any member of the committee or any committee-member's representative or in the formalities of its establishment.





CHAPTER 8
DISPOSAL OF CHARGED PROPERTY
    2.66. - (1) The following applies where the administrator applies to the court under paragraphs 71 or 72 for authority to dispose of property of the company which is subject to a security (other than a floating charge), or goods in the possession of the company under a hire purchase agreement.

    (2) The court shall fix a venue for the hearing of the application, and the administrator shall as soon as reasonably practicable give notice of the venue to the person who is the holder of the security or, as the case may be, the owner under the agreement.

    (3) If an order is made under paragraphs 71 or 72 the court shall send two sealed copies to the administrator.

    (4) The administrator shall send one of them to that person who is the holder of the security or owner under the agreement.

    (5) The administrator shall send a Form 2.28B to the registrar of companies with a copy of the sealed order.



CHAPTER 9
EXPENSES OF THE ADMINISTRATION
    2.67. - (1) The expenses of the administration are payable in the following order of priority - 


(a) expenses properly incurred by the administrator in performing his functions in the administration of the company;

(b) the cost of any security provided by the administrator in accordance with the Act or the Rules;

(c) where an administration order was made, the costs of the applicant and any person appearing on the hearing of the application and where the administrator was appointed otherwise than by order of the court, any costs and expenses of the appointor in connection with the making of the appointment and the costs and expenses incurred by any other person in giving notice of intention to appoint an administrator;

(d) any amount payable to a person employed or authorised, under Chapter 5 of this Part of the Rules, to assist in the preparation of a statement of affairs or statement of concurrence;

(e) any allowance made, by order of the court, towards costs on an application for release from the obligation to submit a statement of affairs or statement of concurrence;

(f) any necessary disbursements by the administrator in the course of the administration (including any expenses incurred by members of the creditors' committee or their representatives and allowed for by the administrator under Rule 2.63, but not including any payment of corporation tax in circumstances referred to in sub-paragraph (j) below);

(g) the remuneration or emoluments of any person who has been employed by the administrator to perform any services for the company, as required or authorised under the Act or the Rules;

(h) the remuneration of the administrator agreed under Chapter 11 of this Part of the Rules;

(j) the amount of any corporation tax on chargeable gains accruing on the realisation of any asset of the company (without regard to whether the realisation is effected by the administrator, a secured creditor, or a receiver or manager appointed to deal with a security).



    (2) The priorities laid down by paragraph (1) of this Rule are subject to the power of the court to make orders under paragraph (3) of this Rule where the assets are insufficient to satisfy the liabilities.

    (3) The court may, in the event of the assets being insufficient to satisfy the liabilities, make an order as to the payment out of the assets of the expenses incurred in the administration in such order of priority as the court thinks just.





CHAPTER 10
DISTRIBUTIONS TO CREDITORSSECTION A: APPLICATION OF CHAPTER AND GENERAL
    2.68. - (1) This Chapter applies where the administrator makes, or proposes to make, a distribution to any class of creditors. Where the distribution is to a particular class of creditors, references in this Chapter to creditors shall, in so far as the context requires, be a reference to that class of creditors only.

    (2) The administrator shall give notice to the creditors of his intention to declare and distribute a dividend in accordance with Rule 2.95.

    (3) Where it is intended that the distribution is to be a sole or final dividend, the administrator shall, after the date specified in the notice referred to in paragraph (2) - 


(a) defray any outstanding expenses of a liquidation (including any of the items mentioned in Rule 4.218) or provisional liquidation that immediately preceded the administration;

(b) defray any items payable in accordance with the provisions of paragraph 99;

(c) defray any amounts (including any debts or liabilities and his own remuneration and expenses) which would, if the administrator were to cease to be the administrator of the company, be payable out of the property of which he had custody or control in accordance with the provisions of paragraph 99; and

(d) declare and distribute that dividend without regard to the claim of any person in respect of a debt not already proved.



    (4) The court may, on the application of any person, postpone the date specified in the notice.

Debts of insolvent company to rank equally
    2.69.Debts other than preferential debts rank equally between themselves in the administration and, after the preferential debts, shall be paid in full unless the assets are insufficient for meeting them, in which case they abate in equal proportions between themselves.

Supplementary provisions as to dividend
    2.70. - (1) In the calculation and distribution of a dividend the administrator shall make provision for - 



(a) any debts which appear to him to be due to persons who, by reason of the distance of their place of residence, may not have had sufficient time to tender and establish their proofs;

(b) any debts which are the subject of claims which have not yet been determined; and

(c) disputed proofs and claims.



    (2) A creditor who has not proved his debt before the declaration of any dividend is not entitled to disturb, by reason that he has not participated in it, the distribution of that dividend or any other dividend declared before his debt was proved, but - 



(a) when he has proved that debt 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; and

(b) any dividends payable under sub-paragraph (a) shall be paid before the money is applied to the payment of any such further dividend.



    (3) No action lies against the administrator for a dividend; but if he refuses to pay a dividend the court may, if it thinks fit, order him to pay it and also to pay, out of his own money - 



(a) interest on the dividend, at the rate for the time being specified in section 17 of the Judgments Act 1838[4], from the time when it was withheld; and

(b) the costs of the proceedings in which the order to pay is made.



Division of unsold assets
    2.71.The administrator may, with the permission of the creditors' committee, or if there is no creditors' committee, the creditors, divide in its existing form amongst the company's creditors, according to its estimated value, any property which from its peculiar nature or other special circumstances cannot be readily or advantageously sold.



SECTION B: MACHINERY OF PROVING A DEBT
Proving a debt
    2.72. - (1) A person claiming to be a creditor of the company and wishing to recover his debt in whole or in part must (subject to any order of the court to the contrary) submit his claim in writing to the administrator.

    (2) A creditor who claims is referred to as "proving" for his debt and a document by which he seeks to establish his claim is his "proof".

    (3) Subject to the next paragraph, a proof must - 


(a) be made out by, or under the direction of, the creditor and signed by him or a person authorised in that behalf; and

(b) state the following matters - 


(i) the creditor's name and address;

(ii) the total amount of his claim as at the date on which the company entered administration, less any payments that have been made to him after that date in respect of his claim and any adjustment by way of set-off in accordance with Rule 2.85;

(iii) whether or not the claim includes outstanding uncapitalised interest;

(iv) whether or not the claim includes value added tax;

(v) whether the whole or any part of the debt falls within any, and if so, which categories of preferential debts under section 386;

(vi) particulars of how and when the debt was incurred by the company;

(vii) particulars of any security held, the date on which it was given and the value which the creditor puts on it;

(viii) details of any reservation of title in respect of goods to which the debt refers; and

(ix) the name, address and authority of the person signing the proof (if other than the creditor himself).



    (4) There shall be specified in the proof details of any documents by reference to which the debt can be substantiated; but (subject as follows) it is not essential that such document be attached to the proof or submitted with it.

    (5) The administrator 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 made in the proof.

Claim established by affidavit
    2.73. - (1) The administrator may, if he thinks it necessary, require a claim of debt to be verified by means of an affidavit in Form 2.29B.

    (2) An affidavit may be required notwithstanding that a proof of debt has already been lodged.

Costs of proving
    2.74.Unless the court otherwise orders - 



(a) every creditor bears the cost of proving his own debt, including costs incurred in providing documents or evidence under Rule 2.72(5); and

(b) costs incurred by the administrator in estimating the quantum of a debt under Rule 2.81 are payable out of the assets as an expense of the administration.



Administrator to allow inspection of proofs
    2.75.The administrator shall, so long as proofs lodged with him are in his hands, allow them to be inspected, at all reasonable times on any business day, by any of the following persons - 



(a) any creditor who has submitted a proof of debt (unless his proof has been wholly rejected for purposes of dividend or otherwise);

(b) any contributory of the company; and

(c) any person acting on behalf of either of the above.



New administrator appointed
    2.76. - (1) If a new administrator is appointed in place of another, the former administrator shall transmit to him all proofs which he has received, together with an itemised list of them.

    (2) The new administrator shall sign the list by way of receipt for the proofs, and return it to his predecessor.

Admission and rejection of proofs for dividend
    2.77. - (1) A proof may be admitted for dividend either for the whole amount claimed by the creditor, or for part of that amount.

    (2) If the administrator rejects a proof in whole or in part, he shall prepare a written statement of his reasons for doing so, and send it as soon as reasonably practicable to the creditor.

Appeal against decision on proof
    2.78. - (1) If a creditor is dissatisfied with the administrator's decision with respect to his proof (including any decision on the question of preference), he may apply to the court for the decision to be reversed or varied. The application must be made within 21 days of his receiving the statement sent under Rule 2.77(2).

    (2) Any other creditor may, if dissatisfied with the administrator's decision admitting or rejecting the whole or any part of a proof, make such an application within 21 days of becoming aware of the administrator's decision.

    (3) Where application is made to the court under this Rule, the court shall fix a venue for the application to be heard, notice of which shall be sent by the applicant to the creditor who lodged the proof in question (if it is not himself) and the administrator.

    (4) The administrator shall, on receipt of the notice, file with the court the relevant proof, together (if appropriate) with a copy of the statement sent under Rule 2.77(2).

    (5) After the application has been heard and determined, the proof shall, unless it has been wholly disallowed, be returned by the court to the administrator.

    (6) The administrator is not personally liable for costs incurred by any person in respect of an application under this Rule unless the court otherwise orders.

Withdrawal or variation of proof
    2.79.A creditor's proof may at any time, by agreement between himself and the administrator, be withdrawn or varied as to the amount claimed.

Expunging of proof by the court
    2.80. - (1) The court may expunge a proof or reduce the amount claimed - 



(a) on the administrator's application, where he thinks that the proof has been improperly admitted, or ought to be reduced; or

(b) on the application of a creditor, if the administrator declines to interfere in the matter.



    (2) Where application is made to the court under this Rule, the court shall fix a venue for the application to be heard, notice of which shall be sent by the applicant - 



(a) in the case of an application by the administrator, to the creditor who made the proof; and

(b) in the case of an application by a creditor, to the administrator and to the creditor who made the proof (if not himself).

SECTION C: QUANTIFICATION OF CLAIMS


Estimate of quantum
    2.81. - (1) The administrator shall estimate the value of any debt which, by reason of its being subject to any contingency or for any other reason, does not bear a certain value; and he may revise any estimate previously made, if he thinks fit by reference to any change of circumstances or to information becoming available to him. He shall inform the creditor as to his estimate and any revision of it.

    (2) Where the value of a debt is estimated under this Rule, the amount provable in the administration in the case of that debt is that of the estimate for the time being.

Negotiable instruments, etc
    2.82.Unless the administrator allows, a proof in respect of money owed on a bill of exchange, promissory note, cheque or other negotiable instrument or security cannot be admitted unless there is produced the instrument or security itself or a copy of it, certified by the creditor or his authorised representative to be a true copy.

Secured creditors
    2.83. - (1) If a secured creditor realises his security, he may prove for the balance of his debt, after deducting the amount realised.

    (2) If a secured creditor voluntarily surrenders his security for the general benefit of creditors, he may prove for his whole debt, as if it were unsecured.

Discounts
    2.84.There shall in every case be deducted from the claim all trade and other discounts which would have been available to the company but for its administration except any discount for immediate, early or cash settlement.

Mutual credit and set-off
    2.85. - (1) This Rule applies - 



(a) where the administrator, being authorised to make the distribution in question, has pursuant to Rule 2.95 given notice that he proposes to make it; and

(b) only for the purposes of determining the claims to be taken into account for the purposes of calculating that distribution.



    (2) In this Rule "mutual dealings" means mutual credits, mutual debts or other mutual dealings between the company and any creditor of the company proving or claiming to prove for a debt in the administration.

    (3) An account shall be taken as at the date of the notice referred to in paragraph (1)(a) 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.

    (4) Sums due either to or from the company shall not be taken into account under paragraph (3) if - 



(a) they became due after the company entered administration;

(b) the other party had notice at the time the sums became due that - 


(i) an application for an administration order was pending; or

(ii) any person had given notice of intention to appoint an administrator;



(c) the administration was immediately preceded by a winding up and the sums became due during the winding up; or

(d) the administration was immediately preceded by a winding up and the other party had notice at the time the sums became due that - 



(i) a meeting of creditors had been summoned under section 98; or

(ii) a petition for the winding up of the company was pending.



    (5) Only the balance (if any) of the account is provable in the administration. Alternatively the amount shall be paid to the administrator as part of the assets.

Debt in foreign currency
    2.86. - (1) For the purpose of proving 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 when the company entered administration.

    (2) "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 cour