Part VIII Individual Voluntary Arrangements

Consideration and implementation of debtor’s proposal

258F1Approval of debtor's proposal

F2(1)

This section applies where under section 257 the debtor's creditors are asked to decide whether to approve the proposed voluntary arrangement.

(2)

The F3creditors may approve the proposed voluntary arrangement with F4or without modifications, but shall not F5approve it with modifications unless the debtor consents to each modification.

(3)

The modifications subject to which the proposed voluntary arrangement may be approved may include one conferring the functions proposed to be conferred on the nominee on another person qualified to act as an insolvency practitioner F6or authorised to act as nominee, in relation to the voluntary arrangement.

But they shall not include any modification by virtue of which the proposal ceases to be a proposal F6under this Part.

(4)

The F7creditors shall not approve any proposal or modification which affects the right of a secured creditor of the debtor to enforce his security, except with the concurrence of the creditor concerned.

(5)

Subject as follows, the F8creditors shall not approve any proposal or modification under which—

(a)

any preferential debt of the debtor is to be paid otherwise than in priority to such of his debts as are not preferential debts, F9...

F10(aa)

any ordinary preferential debt of the debtor is to be paid otherwise than in priority to any secondary preferential debts that the debtor may have,

(b)

a preferential creditor of the debtor is to be paid an amount in respect of F11an ordinary preferential debt that bears to that debt a smaller proportion than is borne to F12another ordinary preferential debt by the amount that is to be paid in respect of that other debt F13, F14...

(c)

a preferential creditor of the debtor is to be paid an amount in respect of a secondary preferential debt that bears to that debt a smaller proportion than is borne to another secondary preferential debt by the amount that is to be paid in respect of that other debt. F15or

(d)

if the debtor is a relevant financial institution (see section 387A), any non-preferential debt is to be paid otherwise than in accordance with the rules in section 328(3A) (reading references to the bankrupt as references to the debtor),

However, the F8creditors may approve such a proposal or modification with the concurrence of the F16... creditor concerned.

F17(6)

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(7)

In this section “preferential debt” F18, "ordinary preferential debt” and “secondary preferential debt” each has the meaning given by section 386 in Part XII; and “preferential creditor” is to be construed accordingly.