(This Note is not part of the Rules)
These Rules make a number of changes to the Insolvency (Scotland) Rules 1986 (“the principal Rules”). These are set out in the Schedule to these Rules.
Part 1 of the Schedule to these Rules makes a number of amendments to the provisions of Part 1 of the principal Rules which relate to company voluntary arrangements. Many of these are consequential on amendments made to the Insolvency Act 1986 by the Insolvency Act 2000. In particular—
(a) a number of amendments are made in consequence of the bringing into force of section 389A of the Insolvency Act 1986 which creates the possibility of qualified persons other than insolvency practitioners acting as nominees or supervisors in relation to company voluntary arrangements;
(b) provision is made to permit the holding of the meetings of members and creditors on different days (previously they had to be held on the same day) (see paragraph 5 of the Schedule which amends Rule 1.14(2) of the principal Rules);
(c) the rules regarding creditors' entitlement to vote are amended so as to provide that creditors with unliquidated claims are always entitled to vote for £1 unless the chairman of the meeting agrees to put a higher value on the claim. This means that creditors with liquidated or unliquidated claims will be bound by an arrangement if for some reason they do not receive notice of the meeting;
(d) a number of amendments are made in consequence of the changes to the Insolvency Act 1986 by the insertion of a section 4A which provides that a voluntary arrangement is to have effect notwithstanding that the members of the company do not vote in favour of it (see for example paragraphs 10 and 11 of the Schedule to the Rules);
(e) a number of provisions are introduced in connection with the bringing into force of the provisions of the Insolvency Act 2000 which insert section 1A and Schedule A1 into the Insolvency Act 1986. These provisions allow the directors of eligible companies (broadly speaking, small companies) to obtain a moratorium with a view to obtaining the approval of a proposal for a voluntary arrangement.
Part 2 of the Schedule makes a consequential amendment to Part 7 of the principal Rules.
Part 3 of the Schedule makes a number of amendments to Schedule 5 to the principal Rules which sets out the forms for use in connection with insolvency proceedings. Amendments are made to the forms for use in connection with company voluntary arrangements.
The costs to business of the commencement of the provisions of the Insolvency Act 2000 are determined in the Regulatory Impact Assessment prepared for that Act. Copies of the assessment are available from Policy Unit, the Insolvency Service, 21 Bloomsbury Street, London WC1B 3QW.
Company Voluntary Arrangements97
Consideration of Proposal for CVA92