The Risk Transformation Regulations 2017

Effect of court order sanctioning transfer scheme

177.—(1) If the court makes an order under regulation 175, it may by that or any subsequent order make such provision (if any) as it thinks fit—

(a) for the transfer to the transferee of a cell forming part of the transferor;

(b) for the transfer to the transferee of any property, liabilities or obligations of the transferor;

(c) for the allotment or appropriation by the transferee of any shares or debentures issued by the transferor;

(d) for the continuation by or against the transferee of any pending legal proceedings by or against the transferor;

(e) for dealing with the interests of any person who, within such time and in such manner as the court may direct, objects to the transfer scheme;

(f) for bringing the order to the attention of any person;

(g) with respect to such incidental, consequential and supplementary matters as are, in its opinion, necessary to secure that the transfer scheme is fully and effectively carried out.

(2) Where the court makes an order under paragraph (1) in respect of a protected cell company, the order may specify the part of the protected cell company to which the order relates.

(3) An order under paragraph (1) may—

(a) transfer property or liabilities whether or not the transferor otherwise has the capacity to effect the transfer in question;

(b) make provision in relation to property which is held by the transferor as trustee;

(c) make provision in relation to enforceable arrangements between cells;

(d) make provision as to prospective or contingent rights or liabilities of the transferor, including provision as to the construction of instruments under which such rights or liabilities arise.

(4) Paragraph (3)(a) is to be taken to include the power to make the following provision in an order—

(a) for the transfer of property or liabilities which would not otherwise be capable of being transferred or assigned;

(b) if the terms on which the transferor is entitled to property or is subject to liabilities include provision that has any of the effects specified in paragraph (5), for the transfer to take effect as if there were no such provision.

(5) The effects mentioned in paragraph (4)(b) are that a transfer of the property or liability in question—

(a) requires a person’s consent or concurrence; or

(b) contravenes or interferes with an interest or right, or otherwise incurs a liability.

(6) Nothing in paragraph (4) is to be read as limiting the scope of paragraph (3).

(7) If an order under paragraph (1) transfers a cell from the transferor to transferee, then the order has the effect specified in paragraph (2) of regulation 176, except to the extent that the order provides otherwise.

(8) If an order under paragraph (1) makes provision for the transfer of property, liabilities or obligations, then the following occur as a result of the order—

(a) the property is transferred to and vests in the transferee specified in the order; and

(b) the liabilities or obligations are transferred to and become liabilities or obligations of the transferee specified in the order.

(9) But if any property or liability included in an order under paragraph (1) is governed by the law of any country or territory outside the United Kingdom, the order may require the transferor, if the transferee so requires, to take all necessary steps for securing that the transfer is fully effective under the law of that country or territory.

(10) Property transferred as a result of an order under paragraph (1) may, if the court so directs, vest free from any charge (or, in Scotland, security over property) which is (as a result of the transfer scheme) to cease to have effect.

(11) An order under paragraph (1) which makes provision for the transfer of property is to be treated as an instrument of transfer for the purposes of any enactment requiring the delivery of an instrument of transfer for the registration of property.

(12) The transferee must provide the FCA and PRA with two office copies of an order made under regulation 175 or 177 before the end of a period of 10 working days beginning with the making of the order, or such longer period as the FCA or PRA (as the case may be) directs.