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The Investment Bank Special Administration (Scotland) Rules 2011

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CHAPTER 2Replacing the administrator

Grounds for resignation

137.—(1) The administrator may resign on grounds of ill health or because—

(a)the administrator intends ceasing to be in practice as an insolvency practitioner; or

(b)there is some conflict of interest, or change of personal circumstances, which precludes or makes impracticable the further discharge by that person of the duties of administrator.

(2) The administrator may, with the leave of the court, resign on grounds other than those specified in paragraph (1).

(3) In a special administration (bank insolvency) before the Objective A committee has passed a full payment resolution, the administrator needs the permission of the Bank of England to resign on grounds other than those specified in paragraph (1).

(4) In a special administration (bank administration) before the Bank of England has given an Objective A Achievement Notice, the administrator needs the permission of the Bank of England to resign on grounds other than those specified in paragraph (1).

Notice of intention to resign

138.—(1) The administrator must give at least 5 business days’ notice of the administrator’s intention to resign, or to apply for the court’s leave to do so—

(a)if there is a continuing administrator of the investment bank, to that person;

(b)if there is a creditors’ committee, to it; but

(c)if there is no such administrator and no creditors’ committee, to the investment bank, its creditors and its clients of whose claim the administrator is aware and whom the administrator has a means of contacting.

(2) Where the administrator was appointed on the application of the FSA or the Secretary of State, notice under paragraph (1) shall also be given to that applicant.

(3) In a special administration (bank insolvency), before the Objective A committee has passed a full payment resolution, notice under paragraph (1) shall be given to the Bank of England.

(4) In a special administration (bank administration), notice under paragraph (1) shall be given to the FSA and to the Bank of England.

Notice of resignation

139.—(1) The notice of resignation shall be lodged in court, and a copy sent to the registrar of companies.

(2) A copy of the notice of resignation shall be sent, not more than 5 business days after it has been lodged in court, to all other persons to whom notice of intention to resign was sent.

(3) In a special administration (bank insolvency), before the Objective A committee has passed a full payment resolution, where the administrator has applied to court for leave to resign, the notice of resignation shall also contain confirmation from the Bank of England that it consents to the application.

(4) In a special administration (bank administration), before the Bank of England has given an Objective A Achievement Notice, where the administrator has applied to the court for leave to resign, the notice of resignation shall also contain confirmation from the Bank of England that it consents to the resignation.

Application to court to remove administrator from office

140.—(1) An application to the court to remove an administrator from office shall be served upon—

(a)the administrator;

(b)the person who made the application for the special administration order;

(c)the creditors’ committee (if any);

(d)the joint administrator (if any);

(e)where there is neither a creditor’s committee nor a joint administrator, upon the investment bank and all the creditors and clients of whose claim the administrator is aware and of whom they have a means of contacting;

(f)the FSA; and

(g)in a special administration (bank administration) where the Bank of England has not given an Objective A Achievement Notice, the Bank of England.

(2) In a special administration (bank administration) the application must state that either—

(a)the Bank of England has consented to the application; or

(b)the Bank of England has given an Objective A Achievement Notice.

(3) An applicant under this rule shall, within 5 business days of the order being made, send a copy of the order to all those to whom notice of the application was sent, and notice of the order to the registrar of companies.

Incapacity of administrator to act through death or otherwise

141.—(1) Subject to the following paragraphs of this rule, where the administrator has died, it is the duty of that person’s executors to give notice of that fact to the court and to the registrar of companies, specifying the date of death.

(2) If the deceased administrator was a partner in or an employee of a firm, notice may be given by a partner in the firm who is qualified to act as an insolvency practitioner, or is a member of any body recognised by the Secretary of State or the Department of Enterprise, Trade and Investment for Northern Ireland for the authorisation of insolvency practitioners.

(3) Notice of the death may also be given by any person.

(4) Where an administrator who has ceased to be qualified to act as an insolvency practitioner in relation to the investment bank gives notice in accordance with paragraph 89(2), the administrator shall also give notice to—

(a)the registrar of companies; and

(b)where the administrator was appointed on the application of the FSA or the Secretary of State, to the applicant.

Application to replace (special administration)

142.—(1) Where an application is made to the court under paragraph 91(1) to appoint a replacement administrator, the application shall be accompanied by a statement of the proposed administrator in accordance with rule 7.

(2) A copy of the application shall be served on—

(a)the person who made the application for the special administration order;

(b)the person nominated for appointment as administrator;

(c)the FSA (if not the applicant); and

(d)the Keeper of the Register of Inhibitions and Adjudications for recording in that register.

(3) Where the court makes an order filling a vacancy in the office of administrator, the same provisions shall apply, subject to such modification as may be necessary, in respect of giving notice of, and advertising, the appointment as in the case of the making of the special administration order.

(4) Service of the application under this rule shall be the same as service of an application for a special administration order.

(5) Rule 11 shall apply to the notice of appointment of a replacement administrator as it applies to notice of a special administration order.

(6) This rule does not apply—

(a)in a special administration (bank insolvency) before the Objective A committee has passed a full payment resolution; or

(b)in a special administration (bank administration) before the Bank of England has given an Objective A Achievement Notice.

Application to replace (special administration (bank insolvency))

143.—(1) This rule applies in a special administration (bank insolvency) before the Objective A committee has passed a full payment resolution.

(2) Where there is a vacancy in the office of administrator the Bank of England must appoint a replacement administrator as soon as reasonably practicable.

(3) The rules for the appointment of an administrator in Chapter 2 of Part 2 shall apply to the appointment of a replacement administrator.

Application to replace (special administration (bank administration))

144.—(1) This rule applies in a special administration (bank administration) before the Bank of England has given an Objective A Achievement Notice.

(2) Where there is a vacancy in the office of administrator the Bank of England must appoint a replacement administrator as soon as reasonably practicable.

(3) Where an application is made by the Bank of England to remove or replace an administrator, the rules in Chapter 3 of Part 2 for the application to appoint an administrator shall apply to the service of notice of the application and of the hearing.

(4) Both the person proposed to be appointed and the existing administrator are entitled to be served and to appear or be represented.

Notification and advertisement of appointment of replacement administrator

145.—(1) Where a replacement administrator is appointed the same provisions apply in respect of giving notice of, and advertising, the replacement appointment as in the case of an initial appointment, and all statements, consents and other documents as required shall also be required in this case.

(2) All notices shall clearly identify that the appointment is of a replacement administrator.

Notification and advertisement of appointment of joint administrator

146.—(1) Where a person is appointed in accordance with paragraph 103 to act as administrator jointly or concurrently with the person or persons then acting, the same provisions shall apply, subject to this rule and to such other modification as may be necessary, in respect of the making of this appointment as in the case of the original appointment of an administrator.

(2) An appointment made under paragraph 103 shall be notified to the registrar of companies.

Additional joint administrator (special administration (bank administration))

147.—(1) This rule applies to an application to appoint an additional joint administrator in a special administration (bank administration) before the Bank of England has given an Objective A Achievement Notice.

(2) The process for the initial appointment of an administrator under Chapter 3 of Part 2 shall apply to the appointment of an additional joint administrator.

(3) The existing administrator (or each of them) is entitled to a copy of the application and may—

(a)lodge written representations; and

(b)appear or be represented at the hearing.

(4) An application for the appointment of an additional joint administrator under this rule may only be made by the Bank of England.

(5) Rule 145 applies in respect to the notification and advertisement of the appointment of an additional joint administrator.

Administrator’s duties on vacating office

148.  Where the administrator (‘A’) ceases to be in office in consequence of this Chapter, A is under obligation as soon as reasonably practicable to deliver up to the person succeeding A as administrator (‘B’) the assets (after deduction of any expenses properly incurred and distributions made by A) and further to deliver up to B—

(a)the records of the administration, including correspondence, proofs and other related papers appertaining to the administration while it was within A’s responsibility; and

(b)the investment bank’s books, papers and other records.

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