Part 5

Loan Relationships
Chapter 3

The credits and debits to be brought into account: general

Rules differing from generally accepted accounting practice

Meaning of expressions relating to insolvency etc
323
1
For the purposes of section 322(6) a company is in insolvent liquidation during the period—
a
beginning when it goes into liquidation at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up, and
b
ending when the winding up is completed or otherwise brought to an end (whether under paragraph 37 or 38 of Schedule B1 to the Insolvency Act 1986 (c. 45) or otherwise).
2
In subsection (1) “liquidation” has the meaning given in—
a
section 247(2) of the Insolvency Act 1986, or
b
Article 6(2) of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)).
3
For the purposes of section 322(6) a company in administration is in insolvent administration if it entered administration under—
a
Schedule B1 to the Insolvency Act 1986, or
b
Schedule B1 to the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)),
at a time when its assets were insufficient for the payment of its debts and other liabilities and the expenses of the administration.
4
For the purposes of section 322(6) a company is in insolvent administrative receivership if—
a
an appointment of an administrative receiver is in force in relation to the company, and
b
the company was put into administrative receivership at a time when its assets were insufficient for the payment of its debts and other liabilities and the expenses of administrative receivership.
5
In subsection (4) “administrative receiver” has the same meaning as in—
a
Chapter 1 or 2 of Part 3 of the Insolvency Act 1986 (c. 45), or
b
Part 4 of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)),
and “administrative receivership” is to be read accordingly.