C1C4C2C3Part 2Bank Insolvency

Annotations:
Modifications etc. (not altering text)
C1

Pt. 2 applied (with modifications) by 1986 c. 53, s. 90C (as inserted (29.3.2009) by Building Societies (Insolvency and Special Administration) Order 2009 (S.I. 2009/805), art. 2)

Process of bank liquidation

I2I1100Liquidation committee

1

Following a bank insolvency order a liquidation committee must be established, for the purpose of ensuring that the bank liquidator properly exercises the functions under this Part.

F12

The liquidation committee is to consist initially of—

a

two individuals nominated by the Bank of England,

b

one individual nominated by the PRA,

c

one individual nominated by the FCA, and

d

one individual nominated by the FSCS.

3

The bank liquidator must report to the liquidation committee about any matter—

a

on request, or

b

which the bank liquidator thinks is likely to be of interest to the liquidation committee.

4

In particular, the bank liquidator—

a

must keep the liquidation committee informed of progress towards Objective 1 in section 99, and

b

must notify the liquidation committee when in the bank liquidator's opinion Objective 1 in section 99 has been achieved entirely or so far as is reasonably practicable.

5

As soon as is reasonably practicable after receiving notice under subsection (4)(b) the liquidation committee must either—

a

resolve that Objective 1 in section 99 has been achieved entirely or so far as is reasonably practicable (a “full payment resolution”), or

b

apply to the court under section 168(5) of the Insolvency Act 1986 (as applied by section 103 below).

6

Where a liquidation committee passes a full payment resolution—

a

the bank liquidator must summon a meeting of creditors,

b

the meeting may elect 2 or 4 individuals as new members of the liquidation committee,

c

those individuals replace the members nominated by the Bank of EnglandF2, the PRA and the FCA,

d

the FSCS may resign from the liquidation committee (in which case 3 or 5 new members may be elected under paragraph (b)), and

e

if no individuals are elected under paragraph (b), or the resulting committee would have fewer than 3 members or an even number of members, the liquidation committee ceases to exist at the end of the meeting.

7

Subject to provisions of this section, rules under section 411 of the Insolvency Act 1986 (as amended by section 125 below) may make provision about—

a

the establishment of liquidation committees,

b

the membership of liquidation committees,

c

the functions of liquidation committees, and

d

the proceedings of liquidation committees.