Restrictions on other insolvency procedures
321.Sections 74 to 78 prevent a postal administration from being frustrated by prior orders of various kinds being granted before the Secretary of State or OFCOM have been given an opportunity to apply for a postal administration order, or by other steps being taken when a postal administration order has been made or an application is outstanding.
Section 74: Winding up orders
322.This section applies if a person other than the Secretary of State petitions for the winding-up of a universal service provider and sets out how the court should act in certain circumstances.
323.Subsection (2) provides that the court is not to exercise its powers on a winding-up petition (for example, the power to grant the winding up order – see subsection (4)) unless:
notice of the petition has been served on the Secretary of State and OFCOM, and
a period of at least 14 days has elapsed since the service of the last of those notices to be served.
324.The notice and 14 day period are intended to avoid a winding up order being granted before the Secretary of State and OFCOM have been given an opportunity seek a postal administration order.
325.If an application for a postal administration order is made before the winding-up order is made (that is, within the 14 day period), subsection (3) allows the court to exercise its powers under section 71 (for example, to make a postal administration order) instead of exercising its powers on the petition for the winding up order.
326.Subsection (4) clarifies that references in this section to the court’s powers on a winding-up petition are to:
its powers under section 125 of the Insolvency Act 1986 (for example, to make a winding up order or dismiss the petition etc.) other than its power of adjournment, and
its powers under section 135 of the Insolvency Act 1986 (for example, to appoint a provisional liquidator).
Section 75: Voluntary winding up
327.This section prevents a universal service provider passing a resolution for voluntary winding up without the permission of the court and sets out conditions on which the court could give permission to allow the voluntary winding up of the company.
328.Subsection (3) stipulates that the court is not to grant permission unless:
notice of the application has been served on the Secretary of State and OFCOM, and
a period of at least 14 days has elapsed since the service of the last of those notices to be served.
329.If an application for a postal administration order is subsequently made before permission is granted, subsection (4) allows the court to exercise its powers under section 71 to make a postal administration order (instead of granting permission).
Section 76: Making of ordinary administration orders
330.This section applies if a person other than the Secretary of State makes an ordinary administration application in relation to a company which is a universal service provider. It sets out how the court should act in such circumstances.
331.Subsection (2) states that the court must dismiss the application for ordinary administration if a postal administration order is in force in relation to the company, or has been made in relation to the company but is not yet in force.
332.If a postal administration order has not been made, subsection (3) requires that, on hearing the ordinary administration application, the court must not exercise its powers under paragraph 13 of schedule B1 to the Insolvency Act 1986 (other than its power of adjournment) unless:
notice of the application has been served on the Secretary of State and OFCOM;
a period of at least 14 days has elapsed since the service of the last of those notices to be served; and
there is no application for a postal administration order which is outstanding.
333.Paragraph 13 of Schedule B1 relates to the powers of the court on hearing an ordinary administration application (for example, to make an administration order, dismiss the application etc.).
334.Subsection (4) explains that paragraph 44 of Schedule B1 to the Insolvency Act 1986 Act (which provides for an interim moratorium under which legal proceedings cannot be taken against the company except with the permission of the court) does not prevent, or require the permission of the court for, the making of an application for a postal administration order.
335.On the making of a postal administration order in relation to a company, subsection (5) requires the court to dismiss any outstanding ordinary administration application made in relation to the company.
Section 77: Administrator appointments by creditors etc
336.This section deals with circumstances where secured creditors or directors of a universal service provider or the company itself seek to appoint an administrator under paragraphs 14 or 22 of Schedule B1 to the Insolvency Act 1986 (powers to appoint administrators).
337.Subsection (2) states that a person may not take any step to make such an appointment when:
a postal administration order is in force in relation to the company;
a postal administration order has been made in relation to the company but is not yet in force; or
an application for a postal administration order in relation to the company is outstanding.
338.Subsection (3) sets out that in any other case, an appointment of an administrator takes effect only if each of the conditions in subsection (4) are met. The conditions are:
that a copy of every document in relation to the appointment that is filed or lodged with the court has been served on the Secretary of State and OFCOM;
that a period of 14 days has elapsed since the service of the last of those copies to be served;
that there is no outstanding application to the court for a postal administration order in relation to the company; and
that the making of an application for a postal administration order in relation to the company has not resulted in the making of a postal administration order which is in force or is still to come into force.
339.Subsection (5) makes it clear that paragraph 44 of Schedule B1 to the Insolvency Act 1986 Act (interim moratorium) does not prevent, or require the permission of the court for, the making of an application for a postal administration order at any time before the appointment takes effect.
Section 78: Enforcement of security
340.This section prevents a person taking any step to enforce a security over property of a company which is a universal service provider unless:
notice of the intention to do so has been served on the Secretary of State and OFCOM; and
a period of at least 14 days has elapsed since the service of the last of those notices to be served.
341.In the case of a foreign company which is a universal service provider, subsection (2) clarifies that the reference to the property of the company is to its property in the United Kingdom.
