Part 7Registered social landlords: insolvency etc.

Making proposals

80Proposals: formulation

1

The Regulator may, during a moratorium, make proposals about the future ownership and management of the registered social landlord’s land with a view to ensuring that land is managed properly in the future by a registered social landlord.

2

Before making proposals, the Regulator must consult—

a

the registered social landlord,

b

all of the registered social landlord’s secured creditors whom the Regulator can locate after making reasonable enquiries,

c

the registered social landlord’s tenants (so far as practicable),

d

where the registered social landlord is a registered society, the Financial Services Authority, and

e

where the registered social landlord is a charity, the Office of the Scottish Charity Regulator.

3

The Regulator must, when formulating proposals—

a

have regard to the interests of the registered social landlord’s creditors as a whole (both secured and unsecured), and

b

so far as practicable, aim to avoid worsening the position of the registered social landlord’s unsecured creditors.

4

Proposals may provide for the appointment of a manager to implement the proposals (and proposals which do so must provide for the payment of the manager’s remuneration and expenses).

5

Proposals must not include anything which would result in—

a

non-preferential debts being paid before preferential debts,

b

preferential creditors being paid different proportions of preferential debts (except where affected preferential creditors agree to be paid a smaller proportion).

“preferential debt” and “preferential creditor” have the same meaning as in the Insolvency Act 1986 (c.45).

81Proposals: submission

1

The Regulator must submit its proposals to all of the registered social landlord’s secured creditors whom the Regulator can locate after making reasonable enquiries.

2

The Regulator must give notice of submitted proposals to—

a

the registered social landlord and its officers, and

b

any liquidator, administrative receiver, receiver or administrator appointed in respect of the registered social landlord or its land.

3

The Regulator must also make arrangements for bringing submitted proposals to the attention of the registered social landlord’s members, tenants and unsecured creditors.

82Proposals: agreement

1

Secured creditors to whom proposals are submitted under section 81 may—

a

agree to the proposals (with or without modification), or

b

reject the proposals.

2

Proposals agreed with modifications have effect only if the Regulator agrees to the modifications.

3

The Regulator must give notice of agreed proposals to—

a

the registered social landlord and its officers,

b

all of the registered social landlord’s secured creditors whom the Regulator can locate after making reasonable enquiries,

c

any liquidator, administrative receiver, receiver or administrator appointed in respect of the registered social landlord or its land,

d

where the registered social landlord is a registered society, the Financial Services Authority, and

e

where the registered social landlord is a charity, the Office of the Scottish Charity Regulator.

4

The Regulator must also make arrangements for bringing agreed proposals to the attention of the registered social landlord’s members, tenants and unsecured creditors.

83Modifying proposals

1

Agreed proposals may be modified from time to time with the agreement of—

a

the Regulator, and

b

all of the registered social landlord’s secured creditors to whom the original proposals were submitted.

2

Sections 80 and 82(3) apply to modified proposals as to the original proposals (and references in sections 84 to 90 to agreed proposals include references to modified proposals).