F1SCHEDULE A1 Moratorium where directors propose voluntary arrangement
Part IV Nominees
Monitoring of company’s activities
F224
(1)
During a moratorium, the nominee shall monitor the company’s affairs for the purpose of forming an opinion as to whether—
(a)
the proposed voluntary arrangement or, if he has received notice of proposed modifications under paragraph 31(7), the proposed arrangement with those modifications has a reasonable prospect of being approved and implemented, and
(b)
the company is likely to have sufficient funds available to it during the remainder of the moratorium to enable it to continue to carry on its business.
(2)
The directors shall submit to the nominee any information necessary to enable him to comply with sub-paragraph (1) which he requests from them.
(3)
In forming his opinion on the matters mentioned in sub-paragraph (1), the nominee is entitled to rely on the information submitted to him under sub-paragraph (2) unless he has reason to doubt its accuracy.
(4)
The reference in sub-paragraph (1)(b) to the company’s business is to that business as the company proposes to carry it on during the remainder of the moratorium.
Withdrawal of consent to act
F325
(1)
The nominee may only withdraw his consent to act in the circumstances mentioned in this paragraph.
(2)
The nominee must withdraw his consent to act if, at any time during a moratorium—
(a)
he forms the opinion that—
(i)
the proposed voluntary arrangement or, if he has received notice of proposed modifications under paragraph 31(7), the proposed arrangement with those modifications no longer has a reasonable prospect of being approved or implemented, or
(ii)
the company will not have sufficient funds available to it during the remainder of the moratorium to enable it to continue to carry on its business,
(b)
he becomes aware that, on the date of filing, the company was not eligible for a moratorium, or
(c)
the directors fail to comply with their duty under paragraph 24(2).
(3)
The reference in sub-paragraph (2)(a)(ii) to the company’s business is to that business as the company proposes to carry it on during the remainder of the moratorium.
(4)
If the nominee withdraws his consent to act, the moratorium comes to an end.
(5)
If the nominee withdraws his consent to act he must, in accordance with the rules, notify the court, the registrar of companies, the company and any creditor of the company of whose claim he is aware of his withdrawal and the reason for it.
(6)
If the nominee without reasonable excuse fails to comply with sub-paragraph (5), he is liable to a fine.
Challenge of nominee’s actions, etc.
F426
(1)
If any creditor, director or member of the company, or any other person affected by a moratorium, is dissatisfied by any act, omission or decision of the nominee during the moratorium, he may apply to the court.
(2)
An application under sub-paragraph (1) may be made during the moratorium or after it has ended.
(3)
On an application under sub-paragraph (1) the court may—
(a)
confirm, reverse or modify any act or decision of the nominee,
(b)
give him directions, or
(c)
make such other order as it thinks fit.
(4)
An order under sub-paragraph (3) may (among other things) bring the moratorium to an end and make such consequential provision as the court thinks fit.
F527
(1)
Where there are reasonable grounds for believing that—
(a)
as a result of any act, omission or decision of the nominee during the moratorium, the company has suffered loss, but
(b)
the company does not intend to pursue any claim it may have against the nominee,
any creditor of the company may apply to the court.
(2)
An application under sub-paragraph (1) may be made during the moratorium or after it has ended.
(3)
On an application under sub-paragraph (1) the court may—
(a)
order the company to pursue any claim against the nominee,
(b)
authorise any creditor to pursue such a claim in the name of the company, or
(c)
make such other order with respect to such a claim as it thinks fit,
unless the court is satisfied that the act, omission or decision of the nominee was in all the circumstances reasonable.
(4)
An order under sub-paragraph (3) may (among other things)—
(a)
impose conditions on any authority given to pursue a claim,
(b)
direct the company to assist in the pursuit of a claim,
(c)
make directions with respect to the distribution of anything received as a result of the pursuit of a claim,
(d)
bring the moratorium to an end and make such consequential provision as the court thinks fit.
(5)
On an application under sub-paragraph (1) the court shall have regard to the interests of the members and creditors of the company generally.
Replacement of nominee by court
F628
(1)
The court may—
(a)
on an application made by the directors in a case where the nominee has failed to comply with any duty imposed on him under this Schedule or has died, or
(b)
on an application made by the directors or the nominee in a case where it is impracticable or inappropriate for the nominee to continue to act as such,
direct that the nominee be replaced as such by another person qualified to act as an insolvency practitioner, or authorised to act as nominee, in relation to the voluntary arrangement.
(2)
A person may only be appointed as a replacement nominee under this paragraph if he submits to the court a statement indicating his consent to act.