The Insolvency (Miscellaneous Amendments) Regulations 2017

New Schedule 7 (Transitional and savings provisions)

55.  After Schedule 6 insert—

“SCHEDULE 7 TRANSITIONAL AND SAVINGS PROVISIONS

Interpretation

1.   In this Schedule—

“the 1986 Act” means the Insolvency Act 1986, as applied to limited liability partnerships(1);

“the 1986 Rules” means the Insolvency Rules 1986(2) as they had effect immediately before the 6th April 2017 in their application to limited liability partnerships(3);

“the 2016 Rules” means the Insolvency (England and Wales) Rules 2016, as applied to limited liability partnerships(4); and

“the commencement date” means the date this Schedule comes into force.

Amendments to the 2016 Rules made by the Insolvency Amendment (EU 2015/848) Regulations 2017 do not apply where proceedings opened before commencement date

2.— (1) The amendments made by the Insolvency Amendment (EU 2015/848) Regulations 2017(5) to the 2016 Rules do not apply where proceedings in relation to a limited liability partnership opened before the commencement date.

(2) The time at which proceedings are opened is to be determined for the purpose of this paragraph in accordance with Article 2(8) of Regulation (EU) 2015/848 of the European Parliament and of the Council of 20th May 2015(6).

Requirement for office-holder to provide information to creditors on opting out

3.— (1) Rule 1.39 of the 2016 Rules (which requires an office-holder to inform a creditor in the first communication that the creditor may elect to opt out of receiving further documents relating to the proceedings) does not apply to an office-holder in relation to a limited liability partnership who delivers the first communication before the commencement date.

(2) However, if such an office-holder informs a creditor in a communication that the creditor may elect to opt out as mentioned in sub-paragraph (1), the communication must contain the information required by rule 1.39(2) of the 2016 Rules.

Electronic communication

4.— (1) Where proceedings in relation to a limited liability partnership commence before the commencement date, Rule 1.45(4) of the 2016 Rules does not apply.

(2) For the purposes of this paragraph proceedings “commence” on—

(a) the delivery of a proposal for a voluntary arrangement to the intended nominee;

(b) the appointment of an administrator under paragraph 14 or 22 of Schedule B1 to the 1986 Act(7);

(c) the making of an administration order;

(d) the appointment of an administrative receiver;

(e) the passing or deemed passing of a resolution to wind up a limited liability partnership; or

(f) the making of a winding-up order.

Statements of affairs

5.— (1) Where proceedings in relation to a limited liability partnership commence before the commencement date and a person is required to provide a statement of affairs, the provisions of the 2016 Rules relating to statements of affairs in administration, administrative receivership and winding up do not apply and the following rules in the 1986 Rules continue to apply—

(a) rules 2.28 to 2.32 (administration);

(b) rules 3.3 to 3.8 (administrative receivership); and

(c) rules 4.32 to 4.42 (winding up).

(2) For the purposes of this paragraph proceedings “commence” on—

(a) the appointment of an administrator under paragraph 14 or 22 of Schedule B1;

(b) the making of an administration order;

(c) the appointment of an administrative receiver

(d) the passing or deemed passing of a resolution to wind up a limited liability partnership; or

(e) the making of a winding-up order.

Savings in respect of meetings taking place on or after the commencement date and resolutions by correspondence

6.— (1) This paragraph applies where in relation to a limited liability partnership on or after the commencement date—

(a) a creditors’ or contributories’ meeting is to be held as a result of a notice issued before that date in relation to a meeting for which provision is made by the 1986 Rules or the 1986 Act;

(b) a meeting is to be held as a result of a requisition by a creditor or contributory made before that date;

(c) a meeting is to be held as a result of a statement made under paragraph 52(1)(b) of Schedule B1 to the 1986 Act and a request is made before that date which obliges the administrator to summon an initial creditors’ meeting; or

(d) a meeting is required by sections 93 or 105(8) of the 1986 Act in the winding up of a limited liability partnership where the resolution to wind up was passed before 6th April 2010.

(2) Where a meeting referred to in sub-paragraph (1)(a) to (d) is held in relation to a limited liability partnership, Part 15 of the 2016 Rules does not apply and the provisions of the 1986 Rules relating to the following continue to apply—

(a) the requirement to hold the meeting;

(b) notice and advertisement of the meeting;

(c) governance of the meeting;

(d) recording and taking minutes of the meeting;

(e) the report or return of the meeting;

(f) membership and formalities of establishment of liquidation and creditors’ committees where a resolution to form the committee is passed at the meeting;

(g) the office-holder’s resignation or removal at the meeting;

(h) the office-holder’s release;

(i) fixing the office-holder’s remuneration;

(j) hand-over of assets to a supervisor of a voluntary arrangement where the proposal is approved at the meeting;

(k) the notice of the appointment of a supervisor of a voluntary arrangement where the appointment is made at the meeting;

(l) claims that remuneration is or that other expenses are excessive; and

(m) complaints about exclusion at the meeting.

(3) Where in relation to a limited liability partnership, before the commencement date, the office-holder seeks to obtain the passing of a resolution by correspondence under rule 2.48, 4.63A or 6.88A of the 1986 Rules—

(a) the relevant provisions of the 2016 Rules do not apply;

(b) the provisions of the 1986 Rules relating to resolutions by correspondence continue to apply; and

(c) the provisions of the 1986 Rules referred to in sub-paragraph (2) of this paragraph apply in relation to any meeting that those provisions require the office-holder to summon.

(4) However, any application to the court in respect of a meeting or vote to which this paragraph applies is to be made in accordance with Part 12 of the 2016 Rules.

Savings in respect of final meetings taking place on or after the commencement date

7.— (1) This paragraph applies where—

(a) before the commencement date—

(i) a final report to creditors is sent under rule 4.49D of the 1986 Rules (final report to creditors in liquidation),

(ii) a final report to creditors and bankrupt is sent under rule 6.78B of the 1986 Rules (final report to creditors and bankrupt), or

(iii) a meeting is called under sections 94, 106, 146 or 331 of the 1986 Act (final meeting); and

(b) a meeting under section 94, 106, 146 or 331 of the 1986 Act is held on or after the commencement date.

(2) Where this paragraph applies, Part 15 of the 2016 Rules does not apply and the provisions of the 1986 Rules relating to the following continue to apply—

(a) the requirement to hold the meeting;

(b) notice and advertisement of the meeting;

(c) governance of the meeting;

(d) recording and taking minutes of the meeting;

(e) the form and content of the final report;

(f) the office-holder’s resignation or removal;

(g) the office-holder’s release;

(h) fixing the office-holder’s remuneration;

(i) requests for further information from creditors;

(j) claims that remuneration is or other expenses are excessive; and

(k) complaints about exclusion at the meeting.

(3) However, any application to the court in respect of such a meeting is to be made in accordance with Part 12 of the 2016 Rules.

Progress reports and statements to the registrar of companies

8.— (1) Where in relation to a limited liability partnership an obligation to prepare a progress report arises but is not fulfilled before the commencement date the following provisions of the 1986 Rules continue to apply—

(a) rule 2.47 (reports to creditors in administration); and

(b) rules 4.49B and 4.49C (progress reports—winding up).

(2) Where before the commencement date, a notice under paragraph 83(3) of Schedule B1 to the 1986 Act is sent to the registrar of companies, rule 2.117A(1) of the 1986 Rules continues to apply.

(3) The provisions of the 2016 Rules relating to progress reporting do not apply in the case of the winding up of a limited liability partnership, where the winding-up order was made on a petition presented before 6th April 2010.

(4) Where the voluntary winding up of a limited liability partnership commenced before 6th April 2010, rule 4.223-CVL of the 1986 Rules as it had effect immediately before that date in its application to limited liability partnerships, continues to apply

(5) Where, in relation to a limited liability partnership, before the commencement date an office-holder ceases to act, or an administrator sends a progress report to creditors in support of a request for their consent to an extension of the administration, resulting in a change in reporting period under rule 2.47(3A), 2.47(3B), 4.49B(5), 4.49C(3), or 6.78A(4) of the 1986 Rules, the period for which reports must be made is the period for which reports were required to be made under the 1986 Rules immediately before the commencement date.

Foreign currency

9.— (1) Where, in relation to a limited liability partnership, before the commencement date an amount stated in a foreign currency on an application, claim or proof of debt is converted into sterling by the office-holder under rules 2.86, 4.91, 5A.3 or 6.111 of the 1986 Rules, the office-holder and any successor to the office-holder must continue to use the same exchange rate for subsequent conversions of that currency into sterling for the purpose of distributing any assets of the limited liability partnership.

(2) However when, in relation to a limited liability partnership, an office-holder, convener, appointed person or chair uses an exchange rate to convert an application, claim or proof in a foreign currency into sterling solely for voting purposes before the commencement date, sub-paragraph (1) does not prevent the office-holder from using an alternative rate for subsequent conversions.

CVA moratoria

10.   Where, before the commencement date, the designated members of a limited liability partnership submit to the nominee the document, statement and information required under paragraph 6(1) of Schedule A1 to the 1986 Act, the provisions of the 1986 Rules relating to moratoria continue to apply to the proposed voluntary arrangement.

Priority of expenses of voluntary arrangements

11.   Rule 4.21A of the 1986 Rules (expenses of voluntary arrangement) continues to apply in relation to a limited liability partnership where a winding up petition is presented before the commencement date.

General powers of liquidator

12.   Rule 4.184 of the 1986 Rules (general powers of liquidator) continues to apply in relation to a limited liability partnership as regards a person dealing in good faith and for value with a liquidator and in respect of the power of the court or the liquidation committee to ratify anything done by the liquidator without permission before the commencement date.

Applications before the court

13.— (1) Where, in relation to a limited liability partnership, an application to court is filed or a petition for winding up is presented under the 1986 Act or under the 1986 Rules before the commencement date and the court remains seised of that application or petition on the commencement date, the 1986 Rules continue to apply to that application or petition.

(2) For the purpose of sub-paragraph (1), the court is no longer seised of an application or petition for winding up when—

(a) in relation to an application, it makes an order having the effect of determining of the application; or

(b) in relation to a petition for winding up—

(i) the court makes a winding up order,

(ii) the court dismisses the petition, or

(iii) the petition is withdrawn.

Forms

14.   A form contained in Schedule 4 to the 1986 Rules may be used in relation to a limited liability partnership on or after the commencement date if—

(a) the form is used to provide a statement of affairs in proceedings where pursuant to paragraph 5 of this Schedule the provisions of the 1986 Rules set out in that paragraph continue to apply;

(b) the form relates to a meeting held under the 1986 Rules as described in paragraph 6(1) of this Schedule;

(c) the form is required because before the commencement date, the office-holder seeks to obtain the passing of a resolution by correspondence; or

(d) the form relates to any application to the court or petition for winding up presented before the commencement date.

Administrations commenced before 15th September 2003

15.   The 1986 Rules continue to apply to administrations of limited liability partnerships where the petition for an administration order was presented before 15th September 2003.

Set-off in insolvency proceedings commenced before 1st April 2005

16.   Where before 1st April 2005 a limited liability partnership entered administration or went into liquidation, the office-holder calculating any set-off must apply the 1986 Rules as they had effect in their application to limited liability partnerships immediately before 1st April 2005.

Calculating the value of future debts in insolvency proceedings commenced before 1st April 2005

17.   Where before 1st April 2005 a limited liability partnership entered administration or went into liquidation the office-holder calculating the value of a future debt for the purpose of dividend (and no other purpose) must apply the 1986 Rules as they had effect in their application to limited liability partnerships immediately before 1st April 2005.

Insolvency practitioner fees and expenses estimates

18.— (1) Rules 18.4(1)(e), 18.16(4) to (10), and 18.30 of the 2016 Rules do not apply in relation to limited liability partnerships where before 1st October 2015—

(a) the appointment of an administrator took effect;

(b) a liquidator was nominated under section 100(2), or 139(3) of the 1986 Act;

(c) a liquidator was appointed under section 139(4) or 140 of the 1986 Act;

(d) a person was directed by the court or appointed to be a liquidator under section 100(3) of the 1986 Act; or

(e) a liquidator was nominated or the administrator became the liquidator under paragraph 83(7) of Schedule B1 to the 1986 Act.

(2) Rule 18.20(4) and (5) of the 2016 Rules do not apply in relation to a limited liability partnership where an administrator was appointed before 1st October 2015 and—

(a) the limited liability partnership is wound up under paragraph 83 of Schedule B1 to the 1986 Act on or after the commencement date and the administrator becomes the liquidator; or

(b) a winding-up order is made upon the appointment of an administrator ceasing to have effect on or after the commencement date and the court under section 140(1) of the 1986 Act appoints as liquidator the person whose appointment as administrator has ceased to have effect.

Transitional provision for limited liability partnerships entering administration before 6th April 2010 and moving to voluntary liquidation between 6th April 2010 and commencement (inclusive of those dates)

19.   Where—

(a) a limited liability partnership went into administration before 6th April 2010, and

(b) the limited liability partnership goes into voluntary liquidation under paragraph 83 of Schedule B1 between 6th April 2010 and commencement (inclusive of those dates),

the 1986 Rules as amended by the Insolvency (Amendment) Rules 2010(9) apply to the extent necessary to give effect to section 104A of the Act notwithstanding that by virtue of paragraph 1(6)(a) or (b) of Schedule 4 to the Insolvency (Amendment) Rules 2010 those amendments to the Insolvency Rules 1986 would otherwise not apply.”

(1)

By S.I. 2001/1090.

(2)

S.I. 1986/1925 amended by S.I. 1987/1919, 1989/397, 1991/495, 1993/602, 1995/586, 1999/359, 1999/1022, 2001/763, 2002/1307, 2002/2712, 2003/1730, 2004/584, 2004/1070, 2005/527, 2006/1272, 2007/1974, 2008/737, 2009/642, 2009/2472, 2010/686, 2010/734, 2011/785, 2012/469, 2013/2135, 2014/817, 2015/443, 2016/187, 2016/90; there are other amending instruments but none is relevant.

(3)

By S.I. 2001/1090.

(4)

By S.I. 2001/1090.

(5)

S.I. 2017/702

(6)

OJEU L.141 of 5 June 2015 p.19.

(7)

Schedule B1 was inserted by paragraph 1 of Schedule 16 to the Enterprise Act 2002 (c. 40).

(8)

As preserved by article 12(2) of S.I. 2010/18.

(9)

S.I. 2010/686.