1 Citation and commencement

(1)    These Rules may be cited as the Insolvency (Scotland) Amendment Rules 2002 and shall come into force on 1st January 2003.

(2)    References in these Rules to “the commencement date” are to the date referred to in paragraph (1).

NOTES
Initial Commencement
Specified date

Specified date: 1 January 2003: see para (1) above.

2 Interpretation

2Interpretation

(1)    In these Rules references to the “principal Rules” are to the Insolvency (Scotland) Rules 1986 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.

NOTES
Initial Commencement
Specified date

Specified date: 1 January 2003: see r 1(1).

3 Amendment to Rule 0.2

3Amendment to Rule 0.2

In Rule 0.2 (interpretation), after the definition of “accounting period” in paragraph (1), insert—

““authorised person” is a reference to a person who is authorised pursuant to section 389A of the Act to act as nominee or supervisor of a voluntary arrangement proposed or approved under Part I or Part VIII of the Act.”.

NOTES
Initial Commencement
Specified date

Specified date: 1 January 2003: see r 1(1).

4 Amendments to Parts 1 and 7 of the principal Rules

4Amendments to Parts 1 and 7 of the principal Rules

(1)    Subject to paragraph (2), Parts 1 and 7 of the principal Rules have effect subject to the amendments set out respectively in Parts 1 and 2 of the Schedule to these Rules.

(2)    The amendments to Parts 1 and 7 of the principal Rules set out respectively in Parts 1 and 2 of the Schedule to these Rules do not apply in relation to a voluntary arrangement under Part I of the Act where—

(a)    a proposal is made by the directors of a company and before the commencement date the intended nominee has endorsed a copy of the written notice of the proposal under Rule 1.4(3);

(b)    a proposal is made by the liquidator or the administrator (acting as the nominee) and before the commencement date the liquidator or administrator (as the case may be) has sent out a notice summoning the meetings under section 3 of the Act as required by Rule 1.11; or

(c)    a proposal is made by the liquidator or the administrator of a company (not acting as the nominee) and before the commencement date the intended nominee has endorsed a copy of the written notice of the proposal under Rule 1.12(2);

and Parts 1 and 7 of the principal Rules without the amendments made in Parts 1 and 2 of the Schedule to these Rules shall continue to apply in such cases.

NOTES
Initial Commencement
Specified date

Specified date: 1 January 2003: see r 1(1).

5 Amendment to Schedule 4 to the principal Rules

5Amendment to Schedule 4 to the principal Rules

In Schedule 4 to the principal Rules the entry relating to Rule 1.24 is deleted.

NOTES
Initial Commencement
Specified date

Specified date: 1 January 2003: see r 1(1).

6 Amendments to Schedule 5 to the principal Rules

6Amendments to Schedule 5 to the principal Rules

(1)    Subject to paragraph (2), in Schedule 5 to the principal Rules, for Forms 1.1 (Scot) to 1.4 (Scot) there are substituted Forms 1.1 (Scot) to 1.19 (Scot) as set out in Part 3 of the Schedule to these Rules.

(2)    Forms 1.1 (Scot) to 1.19 (Scot) are for use in relation to any voluntary arrangement under Part I of the Act other than any of the cases mentioned in paragraph (2) of Rule 4 to these Rules and in those cases Forms 1.1 (Scot) to 1.4 (Scot) in Schedule 5 to the principal Rules, instead of those substituted by Part 3 of the Schedule to these Rules, shall continue to be used.

NOTES
Initial Commencement
Specified date

Specified date: 1 January 2003: see r 1(1).

Signature

Melanie Johnson,

Parliamentary Under-Secretary of State for Competition, Consumers and Markets,

Department of Trade and Industry

29th October 2002

EXPLANATORY NOTE

EXPLANATORY NOTE (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 Insolvency Law97