The Building Societies (Insolvency and Special Administration) Order 2009

Other insolvency processes

6.  After section 90C of the 1986 Act insert—

“Notice to the Authority of preliminary steps

90D.— (1) An application for an administration order in respect of a building society may not be determined unless the conditions below are satisfied.

(2) A petition for a winding up order in respect of a building society may not be determined unless the conditions below are satisfied.

(3) A resolution for voluntary winding up of a building society may not be passed unless the conditions below are satisfied.

(4) An administrator of a building society may not be appointed unless the conditions below are satisfied.

(5) Condition 1 is that the Authority has been notified—

(a) by the applicant for an administration order, that the application has been made,

(b) by the petitioner for a winding up order, that the petition has been presented,

(c) by the building society, that a resolution for voluntary winding up may be passed, or

(d) by the person proposing to appoint an administrator, of the proposed appointment.

(6) Condition 2 is that a copy of the notice complying with Condition 1 has been filed with the court (and made available for public inspection by the court).

(7) Condition 3 is that—

(a) the period of 2 weeks, beginning with the day on which the notice is received, has ended, or

(b) both—

(i) the Authority has informed the person who gave the notice that it does not intend to apply for a building society insolvency order (under section 95 of the Banking Act 2009 as applied by section 90C above), and

(ii) the Bank of England has informed the person who gave the notice that it does not intend to apply for a building society insolvency order or to exercise a stabilisation power under Part 1 of the Banking Act 2009.

(8) Condition 4 is that no application for a building society insolvency order is pending.

(9) Arranging for the giving of notice in order to satisfy Condition 1 can be a step with a view to minimising the potential loss to a building society’s creditors for the purpose of section 214 of the Insolvency Act 1986 (wrongful trading) or Article 178 (wrongful trading) of the Insolvency (Northern Ireland) Order 1989(1) as applied in relation to building societies by section 90 of, and Schedule 15 to, this Act.

(10) Where the Authority receives notice under Condition 1—

(a) the Authority shall inform the Bank of England,

(b) the Authority shall inform the person who gave the notice, within the period in Condition 3(a), whether it intends to apply for a building society insolvency order, and

(c) if the Bank of England decides to apply for a building society insolvency order or to exercise a stabilisation power under Part 1 of the Banking Act 2009, the Bank shall inform the person who gave the notice, within the period in Condition 3(a).

Disqualification of directors

90E.— (1) In this section “the Disqualification Act” means the Company Directors Disqualification Act 1986(2).

(2) In the Disqualification Act—

(a) a reference to liquidation includes a reference to building society insolvency and a reference to building society special administration,

(b) a reference to winding up includes a reference to making or being subject to a building society insolvency order and a reference to making or being subject to a building society special administration order,

(c) a reference to becoming insolvent includes a reference to becoming subject to a building society insolvency order and a reference to becoming subject to a building society special administration order, and

(d) a reference to a liquidator includes a reference to a building society liquidator and a reference to a building society special administrator.

(3) For the purposes of the application of section 7(3) of the Disqualification Act (disqualification order or undertaking)(3) to a building society which is subject to a building society insolvency order, the responsible office-holder is the building society liquidator.

(4) For the purposes of the application of that section to a building society which is subject to a building society special administration order, the responsible office-holder is the building society special administrator.

(5) In the application of this section to Northern Ireland, references to the Disqualification Act are to the Company Directors Disqualification (Northern Ireland) Order 2002(4) and the reference in subsection (3) to section 7(3) of the Disqualification Act is a reference to Article 10(4) of that Order (disqualification order or undertaking; and reporting provisions)(5).”.

(1)

S.I. 1989/2405 (N.I. 19).

(2)

1986 c. 46.

(3)

Section 7(3) was amended by the Enterprise Act 2002 (c. 40), section 248(3) and Schedule 17, paragraphs 40, 42.

(4)

S.I. 2002/3150 (N.I. 4).

(5)

Article 10(4) was amended by S.I. 2005/1455 (N.I. 10).