The Insolvency (England and Wales) Rules 2016

CHAPTER 8 E+W Creditors' voting rights and majorities

Modifications etc. (not altering text)

C1 Pt. 15 Ch. 8 applied (with modifications) (5.7.2018) by The Housing Administration (England and Wales) Rules 2018 (S.I. 2018/719), rules 1.1, 3.29 (with rule 1.2)

C2 Pt. 15 Ch. 8 applied (with modifications) (31.1.2019) by The Education Administration Rules 2018 (S.I. 2018/1135), rules 1, 3.29 (with rule 1.2)

C3 Pt. 15 Chs. 6-9 applied (with modifications) (18.7.2023) by The Relevant Licensee Nuclear Company Administration (England and Wales) Rules 2023 (S.I. 2023/712), rules 1(2)(a), 30 (with rule 2)

[Note: a document required by the Act or these Rules must also contain the standard contents set out in Part 1.]

Creditors' voting rights E+W

15.28.— [F1 (A1) In a decision procedure in respect of a moratorium under Part A1 of the Act a creditor is entitled to vote only if the requirements in paragraph (1)(a) to (c) are satisfied in relation to that decision procedure.]

(1) In an administration, an administrative receivership, a creditors' voluntary winding up, a winding up by the court and a bankruptcy, a creditor is entitled to vote in a decision procedure or to object to a decision proposed using the deemed consent procedure only if—

(a) the creditor has, subject to rule 15.29, delivered to the convener a proof of the debt claimed in accordance with paragraph (3), including any calculation for the purposes of rule 15.31 or 15.32, and

(b) the proof was received by the convener—

(i) not later than the decision date, or in the case of a meeting, 4pm on the business day before the meeting, or

(ii) in the case of a meeting, later than the time given in sub-paragraph (i) where the chair is content to accept the proof; and

(c) the proof has been admitted for the purposes of entitlement to vote.

(2) In the case of a meeting, a proxy-holder is not entitled to vote on behalf of a creditor unless the convener or chair has received the proxy intended to be used on behalf of that creditor.

(3) A debt is claimed in accordance with this paragraph if it is—

(a) claimed as due from the company or bankrupt to the person seeking to be entitled to vote; F2 ...

F2 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) The convener or chair may call for any document or other evidence to be produced if the convener or chair thinks it necessary for the purpose of substantiating the whole or any part of a claim.

(5) In a decision relating to a proposed CVA or IVA every creditor, secured or unsecured, who has notice of the decision procedure is entitled to vote in respect of that creditor's debt.

(6) Where a decision is sought in an administration under rule 3.52(3)(b) (pre-administration costs), rule 18.18(4) (remuneration: procedure for initial determination in an administration) or rule 18.26(2) (first exception: administrator has made statement under paragraph 52(1)(b) of Schedule B1), creditors are entitled to participate to the extent stated in those paragraphs.

Textual Amendments

F1 Rule 15.28(A1) inserted (1.10.2021) by The Insolvency (England and Wales) (No.2) (Amendment) Rules 2021 (S.I. 2021/1028), rules 1, 74 (with rules 4, 5)

F2 Rule 15.28(3)(b) and word omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 101 (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

Modifications etc. (not altering text)

C4 Rules 15.25-15.28 applied (with modifications) (19.3.2024) by The Water Industry (Special Administration) (England and Wales) Rules 2024 (S.I. 2024/229), rules 1, 5, 127-129, Sch. (with rule 2(2))

Scheme manager's voting rights E+W

15.29.—(1) For the purpose of voting in a creditors' voluntary winding up or a winding up by the court of an authorised deposit-taker at which the scheme manager established under section 212(1) of the Financial Services and Markets Act 2000 is entitled to be represented under rule 15.17 (but not for any other purpose), the manager may deliver, instead of a proof, a statement containing—

(a) the names of the creditors of the company in relation to whom an obligation of the scheme manager has arisen or may reasonably be expected to arise;

(b) the amount of each such obligation; and

(c) the total amount of all such obligations.

(2) The manager may from time to time deliver a further statement; and each such statement supersedes any previous statement.

Claim made in proceedings in other member States E+W

F3 15.30.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F3 Rule 15.30 omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 102 (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

Calculation of voting rights E+W

15.31.—(1) Votes are calculated according to the amount of each creditor's claim—

[F4 (za) in a decision procedure in respect of a moratorium under Part A1 of the Act, as at the decision date;]

(a) in an administration, as at the date on which the company entered administration, less—

(i) any payments that have been made to the creditor after that date in respect of the claim, and

(ii) any adjustment by way of set-off which has been made in accordance with rule 14.24 or would have been made if that rule were applied on the date on which the votes are counted;

(b) in an administrative receivership, as at the date of the appointment of the receiver, less any payments that have been made to the creditor after that date in respect of the claim;

(c) in a creditors' voluntary winding up, a winding up by the court or a bankruptcy, as set out in the creditor's proof to the extent that it has been admitted;

(d) in a proposed CVA—

(i) at the date the company went into liquidation where the company is being wound up,

(ii) at the date the company entered into administration (less any payments made to the creditor after that date in respect of the claim) where it is in administration,

[F5 (iii) where (i) and (ii) do not apply, at the decision date;]

F6 (iv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(e) in a proposed IVA—

(i) where the debtor is not an undischarged bankrupt—

(aa) at the date of the interim order, where there is an interim order in force,

(bb) otherwise, at the decision date,

(ii) where the debtor is an undischarged bankrupt, at the date of the bankruptcy order.

(2) A creditor may vote in respect of a debt of an unliquidated or unascertained amount if the convener or chair decides to put upon it an estimated minimum value for the purpose of entitlement to vote and admits the claim for that purpose.

(3) But in relation to [F7 a decision procedure in respect of a moratorium under Part A1 of the Act,] a proposed CVA or IVA, a debt of an unliquidated or unascertained amount is to be valued at £1 for the purposes of voting unless the convener or chair or an appointed person decides to put a higher value on it.

(4) Where a debt is wholly secured its value for voting purposes is nil.

(5) Where a debt is partly secured its value for voting purposes is the value of the unsecured part.

[F8 (6) However, the value of the debt for voting purposes is its full value without deduction of the value of the security in the following cases—

(a) where, in respect of a moratorium under Part A1 of the Act, there is a decision of pre-moratorium creditors on whether to extend or further extend that moratorium under section A11; and

(b) where the administrator has made a statement under paragraph 52(1)(b) of Schedule B1 and the administrator has been requested to seek a decision under paragraph 52(2).]

(7) No vote may be cast in respect of a claim more than once on any resolution put to the meeting F9 ....

(8) A vote cast in a decision procedure which is not a meeting may not be changed.

(9) Paragraph (7) does not prevent a creditor F10 ... from—

(a) voting in respect of less than the full value of an entitlement to vote; or

(b) casting a vote one way in respect of part of the value of an entitlement and another way in respect of some or all of the balance of that value.

Textual Amendments

F4 Rule 15.31(1)(za) inserted (1.10.2021) by The Insolvency (England and Wales) (No.2) (Amendment) Rules 2021 (S.I. 2021/1028), rules 1, 75(2) (with rules 4, 5)

F5 Rule 15.31(1)(d)(iii) substituted (1.10.2021) by The Insolvency (England and Wales) (No.2) (Amendment) Rules 2021 (S.I. 2021/1028), rules 1, 75(3)(a) (with rules 4, 5)

F6 Rule 15.31(1)(d)(iv) omitted (1.10.2021) by virtue of The Insolvency (England and Wales) (No.2) (Amendment) Rules 2021 (S.I. 2021/1028), rules 1, 75(3)(b) (with rules 4, 5)

F7 Words in rule 15.31(3) inserted (1.10.2021) by The Insolvency (England and Wales) (No.2) (Amendment) Rules 2021 (S.I. 2021/1028), rules 1, 75(4) (with rules 4, 5)

F8 Rule 15.31(6) substituted (1.10.2021) by The Insolvency (England and Wales) (No.2) (Amendment) Rules 2021 (S.I. 2021/1028), rules 1, 75(5) (with rules 4, 5)

F9 Words in rule 15.31(7) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 103(a) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

F10 Words in rule 15.31(9) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 103(b) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

Modifications etc. (not altering text)

C5 Rules 15.31-15.38 applied (with modifications) (19.3.2024) by The Water Industry (Special Administration) (England and Wales) Rules 2024 (S.I. 2024/229), rules 1, 5, 130-133, Sch. (with rule 2(2))

Calculation of voting rights: special cases E+W

15.32.— [F11 (A1) In a decision procedure in respect of a moratorium under Part A1 of the Act, a creditor under a hire-purchase agreement is entitled to vote in respect of the debt due and payable by the company at the decision date.

(B1) In calculating the amount of any debt for the purpose of paragraph (A1) no account is to be taken of any amount attributable to the exercise of any right under the relevant agreement so far as the right has become exercisable solely by virtue of a moratorium for the company coming into force.]

(1) In an administration, a creditor under a hire-purchase agreement is entitled to vote in respect of the amount of the debt due and payable by the company on the date on which the company entered administration.

(2) In calculating the amount of any debt for the purpose of paragraph (1), no account is to be taken of any amount attributable to the exercise of any right under the relevant agreement so far as the right has become exercisable solely by virtue of—

(a) the making of an administration application;

(b) a notice of intention to appoint an administrator or any matter arising as a consequence of the notice; or

(c) the company entering administration.

(3) Any voting rights which a creditor might otherwise exercise in respect of a claim in a creditors' voluntary winding up or a winding up by the court of an authorised deposit-taker are reduced by a sum equal to the amount of that claim in relation to which the scheme manager, by virtue of its having delivered a statement under rule 15.29, is entitled to exercise voting rights.

Textual Amendments

F11 Rule 15.32(A1)(B1) inserted (1.10.2021) by The Insolvency (England and Wales) (No.2) (Amendment) Rules 2021 (S.I. 2021/1028), rules 1, 76 (with rules 4, 5)

Modifications etc. (not altering text)

C5 Rules 15.31-15.38 applied (with modifications) (19.3.2024) by The Water Industry (Special Administration) (England and Wales) Rules 2024 (S.I. 2024/229), rules 1, 5, 130-133, Sch. (with rule 2(2))

Procedure for admitting creditors' claims for voting E+W

15.33.—(1) The convener or chair in respect of a decision procedure must ascertain entitlement to vote and admit or reject claims accordingly.

(2) The convener or chair may admit or reject a claim in whole or in part.

(3) If the convener or chair is in any doubt whether a claim should be admitted or rejected, the convener or chair must mark it as objected to and allow votes to be cast in respect of it, subject to such votes being subsequently declared invalid if the objection to the claim is sustained.

Modifications etc. (not altering text)

C5 Rules 15.31-15.38 applied (with modifications) (19.3.2024) by The Water Industry (Special Administration) (England and Wales) Rules 2024 (S.I. 2024/229), rules 1, 5, 130-133, Sch. (with rule 2(2))

Requisite majorities E+W

15.34.—(1) A decision is made by creditors when a majority (in value) of those voting have voted in favour of the proposed decision, except where this rule provides otherwise.

[F12 (1A) Subject to paragraphs (1B) and (1D), a decision in respect of a moratorium under Part A1 of the Act is made when a majority (in value) of those voting have voted in favour of the proposed decision.

(1B) A decision is not made if, of the total number of those creditors voting in respect of the proposed decision who are, to the best of the convener’s belief, unconnected with the company, a majority vote against it.

(1C) For the purpose of paragraph (1B) a creditor is unconnected unless the convener decides that the creditor is connected.

(1D) In the case of a decision which is required by virtue of an order under section A44(3) paragraphs (1A) and (1B) have effect subject to such modifications as may be set out in the court’s order.]

[F13 (2) In the case of an administration, a decision is not made if those voting against it include more than half in value of the creditors to whom notice of the decision procedure was delivered who are not, to the best of the convener’s or chair’s belief, persons connected with the company.]

[F14 (3) In the case of a proposed CVA a decision approving a proposal or a modification is made when three-quarters or more (in value) of those responding vote in favour of it.]

(4) In a proposed CVA a decision is not made if more than half of the total value of the unconnected creditors vote against it.

(5) For the purposes of paragraph (4)—

(a) a creditor is unconnected unless the convener or chair decides that the creditor is connected with the company;

(b) in deciding whether a creditor is connected reliance may be placed on the information provided by the company's statement of affairs or otherwise in accordance with these Rules; and

(c) the total value of the unconnected creditors is the total value of those unconnected creditors whose claims have been admitted for voting.

(6) In a case relating to a proposed IVA—

(a) a decision approving a proposal or a modification is made when three-quarters or more (in value) of those responding vote in favour of it;

(b) a decision is not made if more than half of the total value of creditors who are not associates of the debtor vote against it.

(7) For the purposes of paragraph (6)—

(a) a creditor is not an associate of the debtor unless the convener or chair decides that the creditor is an associate of the debtor;

(b) in deciding whether a creditor is an associate of the debtor, reliance may be placed on the information provided by the debtor's statement of affairs or otherwise in accordance with these Rules; and

(c) the total value of the creditors who are not associates of the debtor is the total value of the creditors who are not associates of the debtor whose claims have been admitted for voting.

Textual Amendments

F12 Rules 15.34(1A)-(1D) inserted (1.10.2021) by The Insolvency (England and Wales) (No.2) (Amendment) Rules 2021 (S.I. 2021/1028), rules 1, 77(2) (with rules 4, 5)

F13 Rule 15.34(2) substituted (6.4.2017) by The Insolvency (England and Wales) (Amendment) Rules 2017 (S.I. 2017/366), rules 1, 39

F14 Rule 15.34(3) substituted (1.10.2021) by The Insolvency (England and Wales) (No.2) (Amendment) Rules 2021 (S.I. 2021/1028), rules 1, 77(3) (with rules 4, 5)

Modifications etc. (not altering text)

C5 Rules 15.31-15.38 applied (with modifications) (19.3.2024) by The Water Industry (Special Administration) (England and Wales) Rules 2024 (S.I. 2024/229), rules 1, 5, 130-133, Sch. (with rule 2(2))

Appeals against decisions under this Chapter E+W

15.35.—(1) A decision of the convener or chair under this Chapter is subject to appeal to the court by a creditor, by a contributory, or by the bankrupt or debtor (as applicable).

(2) In a proposed CVA, an appeal against a decision under this Chapter may also be made by a member of the company.

(3) [F15 In respect of a decision, other than one which is taken, or required, under Part A1 of the Act (as to which see paragraphs (3A) and (3B) if that] decision is reversed or varied, or votes are declared invalid, the court may order another decision procedure to be initiated or make such order as it thinks just but, in a CVA or IVA, the court may only make an order if it considers that the circumstances which led to the appeal give rise to unfair prejudice or material irregularity.

[F16 (3A) Subject to paragraph (3B), on an appeal against a decision taken, or required, under Part A1 of the Act a court may—

(a) reverse the decision;

(b) vary the decision;

(c) declare certain votes to be invalid; or

(d) make such other order as it sees fit.

(3B) A court must not make an order of the kind referred to in paragraph (3A)(a) to (c) if—

(a) it is satisfied that the circumstances which led to the appeal did not give rise to unfair prejudice or material irregularity, or

(b) the decision was taken at a time when the moratorium was in force, and that moratorium has subsequently come to an end.]

(4) An appeal under this rule may not be made later than 21 days after the decision date.

(5) However, the previous paragraph does not apply in a proposed CVA or IVA, where an appeal may not be made after the end of the period of 28 days beginning with the day—

(a) in a proposed CVA, on which the first of the reports required by section 4(6) F17 ... was filed with the court M1 ; or

(b) in a proposed IVA—

(i) where an interim order has not been obtained, on which the notice of the result of the consideration of the proposal required by section 259(1)(a) has been given, or

(ii) otherwise, on which the report required by section 259(1)(b) M2 is made to the court.

(6) The person who made the decision is not personally liable for costs incurred by any person in relation to an appeal under this rule unless the court makes an order to that effect.

(7) The court may not make an order under paragraph (6) if the person who made the decision in a winding up by the court or a bankruptcy is the official receiver or a person nominated by the official receiver.

Textual Amendments

F15 Words in rule 15.35(3) substituted (1.10.2021) by The Insolvency (England and Wales) (No.2) (Amendment) Rules 2021 (S.I. 2021/1028), rules 1, 78(2) (with rules 4, 5)

F16 Rule 15.35(3A)(3B) inserted (1.10.2021) by The Insolvency (England and Wales) (No.2) (Amendment) Rules 2021 (S.I. 2021/1028), rules 1, 78(3) (with rules 4, 5)

F17 Words in rule 15.35(5)(a) omitted (1.10.2021) by virtue of The Insolvency (England and Wales) (No.2) (Amendment) Rules 2021 (S.I. 2021/1028), rule 1, Sch. 2 para. 3 table (with rules 4, 5)

Modifications etc. (not altering text)

C5 Rules 15.31-15.38 applied (with modifications) (19.3.2024) by The Water Industry (Special Administration) (England and Wales) Rules 2024 (S.I. 2024/229), rules 1, 5, 130-133, Sch. (with rule 2(2))

Marginal Citations

M1 Section 4(6) is amended by paragraph 4(6) of Schedule 9 to the Small Business, Enterprise and Employment Act 2015 (c.26) and paragraph 30(3) is amended by paragraph 9(12) and (13) of Schedule 9 to the same Act.

M2 Section 259(1) is substituted by paragraph 66(2) of Schedule 9 to the Small Business, Enterprise and Employment Act 2015.