The Insolvency (Scotland) Amendment Rules 2014

Publication Date:January 01, 2014
 
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2014No. 114

INSOLVENCY

COMPANIES

The Insolvency (Scotland) Amendment Rules 2014

29thApril2014

1stMay2014

30thMay2014

The Scottish Ministers make the following Rules in exercise of the powers conferred by section 411 of the Insolvency Act 1986( 1) and all other powers enabling them to do so.

Citation, commencement and interpretation

1. (1) These Rules may be cited as the Insolvency (Scotland) Amendment Rules 2014 and come into force on 30th May 2014.

(2) In these Rules-

"the Act" means the Insolvency Act 1986; and

"the 1986 Rules" means the Insolvency (Scotland) Rules 1986( 2).

Amendments to the Insolvency (Scotland) Rules 1986

2. The 1986 Rules are amended in accordance with Rules 3 to 28.

Definition of accounting period and statutory demand

3. In Rule 0.2(1) (interpretation)-

(a) in the definition of "accounting period", for "section 52(1) and (6) of the Bankruptcy Act as applied by Rule 4.68" substitute "Rule 4.68(1) to (3)"; and

(b) after the definition of "Standard content", insert-

""statutory demand" means a written demand served by a creditor on a company under section 123(1)(a)( 3) or 222(1)(a)( 4);".

Claims and distribution of assets in administration

4. In Rule 2.41( 5)-

(a) for paragraph (1A) substitute-

"(1A) Rule 4.68A shall not apply for the purposes of this Rule.";

(b) in paragraph (2), omit ", or in any provision of the Bankruptcy Act as applied by Rule 4.16 or 4.68";

(c) for paragraph (3) substitute-

"(3) Rule 4.68(4) shall apply subject to paragraph (4) of this Rule."; and

(d) for paragraph (5)(b) substitute-

"(b) in Rule 4.16E, the reference to the date on which the company entered administration in paragraph (1) and the second reference to that date in paragraph (2) shall be construed as references to the date of commencement of winding up within the meaning of section 129( 6);".

Payments of dividends in administration

5. In Rule 2.41A(2)(b) (payments of dividends)( 7), for "subsection (7) or (8) of section 52 of the Bankruptcy Act as applied by Rules 2.41 and 4.68" substitute "Rule 4.68(7) or (8) as applied by Rule 2.41".

Provisional liquidator

6. For Rule 4.5(2) (remuneration)( 8) substitute-

"(2) The basis for the court fixing the amount of the remuneration payable to the provisional liquidator may be a commission calculated by reference to the value of the company's assets with which the provisional liquidator has had to deal but there shall in any event be taken into account-

(a) the work which, having regard to that value, was reasonably undertaken by the provisional liquidator; and

(b) the extent of the provisional liquidator's responsibilities in administering the company's assets.".

Claims in liquidation

7. In Rule 4.15 (submission of claims)( 9)-

(a) in paragraph (4), for "paragraph 5(2) of Schedule 1 to the Bankruptcy Act, as applied by the following Rule" substitute "Rule 4.16G(2)"; and

(b) for paragraph (6) substitute-

"(6) In this Rule and in Rules 4.16 to 4.16G, any reference to the liquidator includes a reference to the chairman of the meeting (construed in accordance with Rule 7.5).".

8. For Rule 4.16 (application of the Bankruptcy Act)( 10) substitute-

"False claims or evidence

4.16.

(1) If a creditor produces under Rule 4.15 a statement of claim, account, voucher or other evidence which is false-

(a) the creditor shall be guilty of an offence unless the creditor shows that the creditor neither knew nor had reason to believe that the statement of claim, account, voucher or other evidence was false;

(b) the company shall be guilty of an offence if the company-

(i) knew or became aware that the statement of claim, account, voucher or other evidence was false; and

(ii) failed as soon as practicable after acquiring such knowledge to report it to the liquidator.

(2) A person convicted of an offence under paragraph (1) shall be liable-

(a) on summary conviction-

(i) to a fine not exceeding the statutory maximum;

(ii) to imprisonment for a term not exceeding three months or, if the person has previously been convicted of an offence inferring dishonest appropriation of property or an attempt at such appropriation, to imprisonment for a term not exceeding six months; or

(iii) to both such a fine and such imprisonment; or

(b) on conviction on indictment to a fine or to imprisonment for a term not exceeding two years or to both.

Evidence of Claims

4.16A.

(1) The liquidator, for the purpose of being satisfied as to the validity or amount of a claim submitted by a creditor under Rule 4.15, may require-

(a) the creditor to produce further evidence; or

(b) any other person who the liquidator believes can produce relevant evidence, to produce such evidence,

and, if the creditor or other person refuses or delays to do so, the liquidator may apply to the court for an order requiring the creditor or other person to attend for private examination before the court.

(2) Subject to paragraph (3), on an application to it under paragraph (1) above the court may make an order requiring the creditor or other person to attend for private examination before it on a date (being not earlier than 8 days nor later than 16 days after the date of the order) and at a time specified in the order.

(3) If a creditor or other person is for any good reason prevented from attending for examination, the court may grant a commission to take the examination (the commissioner being in this Rule as an "examining commissioner").

(4) At any private examination under paragraph (2), a solicitor or counsel may act on behalf of the liquidator, or the liquidator may appear.

(5) The examination, whether before the court or an examining commissioner, shall be taken on oath.

(6) A person who fails without reasonable excuse to comply with an order made under paragraph (2) above shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale or to imprisonment for a term not exceeding three months or to both.

(7) References in this Rule to a creditor in a case where the creditor is one of the following entities-

(a) a trust;

(b) a partnership (including a dissolved partnership);

(c) a body corporate or an unincorporated body;

(d) a limited partnership (including a dissolved partnership) within the meaning of the Limited Partnerships Act 1907( 11),

shall be construed, unless the context otherwise requires, as references to a person representing the entity.

Adjudication of claims

4.16B.

(1) At the commencement of every meeting of creditors, the liquidator shall, for the purposes of Rule 4.15 so far as it relates to voting at that meeting, accept or reject the claim of each creditor.

(2) Where funds are available for payment of a dividend out of the company's assets in respect of an accounting period, the liquidator for the purpose of determining who is entitled to such a dividend shall-

(a) not later than 4 weeks before the end of the period, accept or reject every claim submitted or deemed to have been re-submitted under Rule 4.15; and

(b) at the same time make a decision on any matter requiring to be specified under paragraph (5)(a) or (b) below.

(3) On accepting or rejecting, under paragraph (2) above, every claim submitted or deemed to have been re-submitted, the liquidator shall, as soon as is reasonably practicable, send a list of every claim so accepted or rejected (including the amount of each claim and whether it has been accepted or rejected) to every creditor known to the liquidator.

(4) Where the liquidator rejects a claim, the liquidator shall without delay notify the creditor giving reasons for the rejection.

(5) Where the liquidator accepts or rejects a claim, the liquidator shall record in the sederunt book the decision on the claim specifying-

(a) the amount of the claim accepted;

(b) the category of debt, and the value of any security, as decided by the liquidator; and

(c) if rejecting the claim, the reasons therefor.

(6) Any member or contributory of the company or any creditor may, if dissatisfied with the acceptance or rejection of any claim (or, in relation to such acceptance or rejection, with a decision in respect of any matter requiring to be specified under paragraph (5)(a) or (b) above), appeal therefrom to the court-

(a) if the acceptance or rejection is under paragraph (1) above, within 2 weeks of that acceptance or rejection;

(b) if the acceptance or rejection is under paragraph (2) above, not later than 2 weeks before the end of the accounting period,

and the liquidator shall record the court's decision in the sederunt book.

(7) Any reference in this Rule to the acceptance or rejection of a claim shall be construed as a reference to the acceptance or rejection of the claim in whole or in part.

Entitlement to vote and draw a dividend

4.16C.

(1) A creditor who has had that creditor's claim accepted in whole or in part by the liquidator or on appeal under Rule 4.16B(6) shall be entitled-

(a) in a case where the acceptance is under (or on appeal arising from) Rule 4.16B(1), to vote on any matter at the meeting of creditors for the purpose of voting at which the claim is accepted; and

(b) in a case where the acceptance is under (or on appeal arising from) Rule 4.16B(2), to payment out of the company's assets of a dividend in respect of the accounting period for the purposes of which the claim is accepted; but such entitlement to payment shall arise only in so far as the company has funds available to make that payment, having regard to Rule 4.66.

(2) No vote shall be cast by virtue of a debt more than once on any resolution put to a meeting of creditors.

(3) Where a creditor-

(a) is entitled to vote under this Rule;

(b) has lodged the creditor's 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,

only the creditor's vote shall be counted.

(4) Where-

(a) a creditor has lodged the creditor's claim in more than one set...

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